The term "value added" is used to describe:
a. the increase in the value of a product that occurs at each stage of production.
b. the amount subtracted from the value of goods because of inflation.
c. the total value of all intermediate goods used in the production of the final good.
d. the amount paid in the final sale of a product or service.
e. the amount subtracted from the value of resources because of depreciation.
a
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Refer to Market Diagram. Suppose this firm initially acted competitively. If the firm switched to the monopoly equilibrium, how much deadweight loss would be created?
The following questions refer to the accompanying market diagram. PC and QC are the equilibrium price and quantity if the firm behaves competitively, and PM and QM are the equilibrium price and quantity if the firm is a simple monopoly.
a. Area E + H.
b. Area G + H.
c. Area B + D + E + G + H.
d. Area D + E + G + H.
Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
Refer to Figure 8A.1. When the economy reaches K
A) economic growth through capital deepening continues to increase. B) capital stock increases. C) depreciation equals saving. D) depreciation is zero.
The larger the marginal propensity to consume,
a. the larger the multiplier. b. the larger the marginal propensity to save. c. the higher the income level of the economy. d. the smaller the change in income derived from a given change in government spending.