In one year, a firm increases its production by $9 million and increases sales by $8 million. All other things in the economy remaining the same, which of the following is true?
A) GDP increases by $8 million and inventory investment decreases by $1 million.
B) GDP increases by $9 million and inventory investment increases by $1 million.
C) Inventory investment decreases by $1 million.
D) GDP increases by $8 million and investment increases by $1 million.
E) GDP increases by $17 million.
B
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"If production of a good creates an external cost, then, when production is such that the marginal private costs are equal to the marginal private benefits, the market outcome will be inefficient"
Explain whether this assertion is correct or incorrect.
If additional units of a good could be produced at a constant opportunity cost, the production possibilities frontier would be linear
Indicate whether the statement is true or false
The income elasticity of demand for jewelry is 2. Other things equal, a 10 percent increase in consumer income will:
A. decrease the quantity of jewelry purchased by 20 percent. B. increase the quantity of jewelry purchased by 20 percent. C. decrease the quantity of jewelry purchased by 10 percent. D. increase the quantity of jewelry purchased by 10 percent.
Which question is an example of a macroeconomic question?
a. What is the level of industrial concentration in the automobile industry? b. What policies would be recommended for stimulating national economic growth? c. What economic incentives can be used to reduce the cost of health care? d. What are the supply and demand conditions expected to be for the major farm crops?