In the Keynesian theory, output and employment in the economy depend
A. directly on the level of total expenditures.
B. inversely on the quantity of resources available to it.
C. directly on the level of disposable income.
D. directly on the rate of interest.
A. directly on the level of total expenditures.
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The marginal revenue product of an input tends to decrease as
A. the price of the input decreases. B. the price of output increases. C. productivity increases. D. more of the input is used.
All of the following are examples of spending on goods and services in the circular flow model except
A) Chaitanya buys a new spa pedicure chair for her expanding nail salon business. B) Hernan buys a pizza at Papa C's. C) Lenny buys a new digital camera to take pictures at his son's graduation. D) Amanda purchases a new electric guitar to pursue her hobby seriously.
Tradable allowances are like quotas in that they both:
A. reduce the quantity bought and sold to the efficient level. B. maximize surplus. C. are efficient. D. All of these statements are true.
The City of Greenville needs to raise revenue. Alderman Black has proposed a $10 tax on red cars in the city, currently numbering 2,000 . Mayor White, who wants more than $20,000 in revenue, proposes taxing these cars at $100 each. Councilwoman
Bluestone goes even farther, suggesting a $1,000 per red car tax, arguing that her proposal will raise $2 million. If maximizing tax revenue is the only consideration, which proposal should pass? Why?