We are given the individual demand curves for all of the people that consume ice cream. Which statement is TRUE about the market demand curve for ice cream?
A) The market demand curve is obtained by horizontally summing the individual demand curves.
B) The market demand curve is obtained by vertically summing the individual demand curves.
C) The market demand curve cannot be obtained because information on prices is missing.
D) The market demand curve cannot be obtained from individual demand curves.
Answer: A
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A decrease in aggregate expenditure has what result on equilibrium GDP?
A) Equilibrium GDP falls. B) Equilibrium GDP rises. C) Equilibrium GDP is not affected by a decrease in aggregate expenditure. D) Equilibrium GDP may rise or fall depending on the size of the decrease in aggregate expenditure relative to the initial level of GDP.
Automatic stabilizers are changes in ______.
a. taxes and transfer payments b. discretionary spending c. interest rates and money supply d. import levels
Refer to the graph shown, which depicts a perfectly competitive firm. If the price of the product is $8 and the firm maximizes profit:
A. output will be 100 units per day. B. average cost of the product will be at the minimum possible level. C. the firm will earn economic profits of more than $330 per day. D. the industry will be in long-run equilibrium.
In an article regarding Bangladesh's economy, the author suggests that the government give tax breaks on investment dollars, research and development, and donations to educational institutions. The increase in investment is considered __________ and will generate a larger increase in __________.
a) equilibrium spending; autonomous expenditure b) autonomous expenditure; induced expenditure c) induced expenditure; autonomous expenditure d) autonomous expenditure; multiplier spending