The table below shows the consumption schedule for a hypothetical economy. All figures are in billions of dollars.RGDPConsumption$600$590610598620606630614640622650630660638If investments were fixed at $16, taxes were zero, government purchases of goods and services were zero, and net exports were zero, then equilibrium real GDP would be $630 initially. If government purchases were then raised from $0 to $10 and lump-sum taxes also increased from $0 to $10, other things constant, the equilibrium real GDP would become
A. $630.
B. $650.
C. $660.
D. $640.
Answer: D
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Which of the following is NOT a key principle of economics?
A) Optimization B) Equilibrium C) Empiricism D) Substitution
The reservation value of a buyer reflects her ________
A) willingness to pay for a good or service B) trade-off between buying various goods and services C) total utility from a good or service D) total income
When marginal cost pricing occurs
A) price equals the additional cost society incurs in producing the next unit of an item. B) the firm can only break even if it does not set price to marginal cost. C) price equals average variable cost but exceeds average total cost. D) the firm is at the shutdown point.
If an idea has not been implemented because a monopoly producer has placed a barrier to entry, the circumstances are not normal due to:
A. innovation. B. market failure. C. intervention. D. goals other than profit.