In order to maximize profit, a firm that produces its output in two plants will allocate total output between the two plants so that
A. marginal revenue for the firm is equal to the sum of the plants' marginal costs.
B. marginal cost for the firm is equal to the sum of the plants' marginal costs.
C. marginal cost is equal for the two plants.
D. all of the above
Answer: C
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From an initial IS-LM equilibrium with a normally-sloped IS curve and a vertical LM curve, the money supply increases. A the new IS-LM equilibrium we have
A) higher income and a lower interest rate. B) higher income and an unchanged interest rate. C) an unchanged income and a lower interest rate. D) lower income and an unchanged interest rate. E) an unchanged income and a higher interest rate.
If the MPC is 0.8 and the tax rate is 20%, the expenditure multiplier will equal
A) 1.19. B) 2.78 C) 4.0. D) 6.0.
The introduction of a union into an industry creates a
a. surplus of labor and so raises unemployment. b. surplus of labor and so reduces unemployment. c. shortage of labor and so raises unemployment. d. shortage of labor and so reduces unemployment.
Who are the only ones not affected when a Pigouvian subsidy is implemented for a positive externality in a market?
A. Consumers B. Those affected by the externality C. Producers D. All of these groups are affected when it becomes internalized.