Cummins, Hubbard, and Hassett found that investment responded to a tax change that affected the user cost of capital, with an elasticity of
A. -0.25.
B. 0.
C. -0.66.
D. -1.
Answer: C
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If the nominal wage is $30 in 2011 and the CPI is 202 in 2011, then the real wage in 1982-1984 dollars
A) is $14.85. B) is $30. C) is $1.48. D) is $29.00. E) cannot be calculated without the past year wage rate.
If investment spending increases by $1 million, then the aggregate demand curve shifts
A) rightward by less than $1 million. B) leftward by more than $1 million. C) rightward by more than $1 million. D) rightward by $1 million. E) leftward by less than $1 million.
If a natural monopoly is regulated using
A) a marginal cost pricing rule, the firm maximizes its profit. B) an average cost pricing rule, the firm incurs an economic loss. C) a total cost pricing rule, the firm will exit the industry. D) a marginal cost pricing rule, the firm incurs an economic loss. E) an average cost pricing rule, the firm maximizes its profit.
The above figure shows the marginal social benefit and marginal social cost curves of chocolate in the nation of Kaffenia. What is the efficient quantity of chocolate to produce each day?
A) zero B) 100 pounds C) 150 pounds D) 250 pounds