If there is an excess supply of a good, the problem of scarcity does not apply to that good.
a. true
b. false
b. false
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If firms must pay full liability for accidents plus punitive damages, then
a. the private costs of firms' activities will be equal to the social costs. b. firms will have an incentive to make efficient choices. c. social welfare will be higher than if no punitive damages were assessed. d. firms will undertake less activity than would be socially optimal.
Suppose that there is no government and no international trade. When C + I is less than the level of real GDP
A) unplanned inventories increase, and real GDP contracts. B) unplanned inventories decrease, and real GDP expands. C) real planned investment spending equals real planned saving. D) unplanned inventories equal zero, and there is no change in the level of real GDP.
To maximize her utility, Pat should spend all of her money and buy goods in a way that
A) the marginal utility of the last unit of each good is the same. B) the marginal utility per dollar from each good is the same. C) her total expenditure on each good is the same. D) her price elasticity of demand for each good is the same.
If a fall in investment demand of 100 units causes equilibrium income to fall by 150 units in the simple Keynesian model, then the marginal propensity to save must be
a. .25. b. 1.5. c. .5. d. 1/3. e. 2/3.