Mitsubishi Corporation of America builds a car in Normal, Illinois, and ships it to Japan for sale. In which country’s GDP is this production included?
A. Japan
B. Both Japan and the United States
C. In Japan as retail value and the United States as wholesale value
D. Half the value in Japan and half in the United States
E. The United States
Answer: E
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The cost of producing each bottle of a certain brand of shampoo is $0.25. If the market for shampoo is monopolistically competitive and demand for shampoo is inelastic, a manufacturer who charges $0.35 for each bottle will ________
A) shut down production in the short run B) exit the industry in the long run C) earn an economic profit of $0.10 per bottle D) earn a total revenue of $0.10 per bottle
In monopolistic competition, product improvement and development
A) are valued by the consumer at an amount equal to the costs the producers have incurred. B) yields a marginal benefit to the producer equal to price of the good. C) is less than its efficient amount. D) None of the above answers are correct.
Which of the following pairs of goods would most likely exhibit a cross price elasticity of -1.8?
a. orange juice and grapefruit juice b. coffee and tea c. a bagel and cream cheese d. a van and a sport utility vehicle
Taxes are reduced by $10 billion and income increases by $200 billion. The value of the tax multiplier is
A. -20. B. -5. C. -2. D. -0.5.