With an MPS of .2, the MPC will be:
a. .8
b. .3
c. 1.2
d. 5
Ans: a. .8
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Why does the presence of negative externalities in the production of a good lead to an overproduction of the good?
What will be an ideal response?
It costs firm A $800 to produce five radios and it costs firm B $500 to produce five batteries. If Firm A merges with firm B, it can produce both the five radios and the five batteries for $1500 . The firm has experienced
a. Economies of Scale b. Economies of Scope c. Diseconomies of Scale d. Diseconomies of Scope
If the government increased its purchases of goods and services by $12,000, and this resulted in an eventual increase in GDP and income of $60,000, the MPS would be equal to:
A. 0.2. B. 0.4. C. 0.8. D. 2.
Which of the following statements about a firm's short-run variable costs is correct?
A. They are always a greater expense than are fixed costs. B. They include the costs of plant and equipment. C. They increase as the level of output decreases. D. They typically include the cost of workers' wages.