A hypothetical open economy has a marginal propensity to import (MPI) equal to 0.2 and a marginal propensity to consume equal to 0.7. Assume that the economy is initially in equilibrium. Refer to Scenario 10.2. What is the marginal propensity to save of this economy?
a. 0.2
b. 0.3
c. 0.7
d. 0.9
e. 0.6
Answer: b. 0.3
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A firm will buy monopoly power until the marginal cost of having a monopoly:
A. is more than the marginal benefit. B. is less than the marginal benefit. C. equals the marginal benefit. D. equals the price of its product.
Exhibit 3-5 Supply for Tucker's Cola Data Quantity supplied per week(millions of gallons) Price pergallon 6 $3.00 5 2.50 4 2.00 3 1.50 2 1.00 1 .50 Exhibit 3-5 shows the supply schedule for Tucker's Cola. Suppose there are four additional suppliers of cola in the market. When the price per gallon of cola is $1.50, the first supplier is willing to sell 10 million gallons, the second supplier is willing to sell 2 million gallons, the third supplier is willing to sell 5 million gallons, and the fourth supplier is willing to sell 0 gallons. The market quantity supplied of cola when the price is $1.50 is
A. 17 million gallons. B. 20 million gallons. C. 30 million gallons. D. 0 gallons.
Scalping at major sporting events is an example of
A. a black market caused by a price floor. B. the operation of rationing by the market. C. a black market caused by a price ceiling. D. a surplus caused by the existence of price ceilings.
Which of the following statements about stock market brokers and dealers is TRUE?
A. Both brokers and dealers try to profit from trading stocks. B. Both brokers and dealers earn commissions from trading stocks. C. Brokers try to profit from trading stocks but dealers earn commissions from trading stocks. D. Brokers earn commissions from trading stocks but dealers try to profit from trading stocks.