If the marginal propensity to consume (MPC) is 0.80, the value of the spending multiplier is:
a. 2.
b. 5.
c. 8.
d. 10.
b
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Pat's Catering finds that when it caters 20 meals a week, its total cost is $6,000. If Pat has total variable cost of $5,000, what is Pat's total fixed cost?
A) $50 B) $250 C) $1,000 D) $6,000
A firm that has the ability to control to some degree the price of the product it sells
A) is also able to dictate the quantity purchased. B) faces a perfectly inelastic demand curve. C) is a price maker. D) faces a demand curve that is inelastic throughout the entire range of market demand.
Advertising, brand names, packaging, and celebrity endorsements all occur in monopolistically competitive markets because:
a. significant barriers to entry exist in the real world. b. in the real world, there are very few markets with many firms. c. that gives the producer some command over the price of their products. d. product differentiation seldom occurs in the real world. e. monopolistically competitive firms have an incentive to spend as much money as possible compared to their rivals.
Objections to monopolies do not include which of the following?
a. They reduce output below the efficient level of output that would be produced in perfect competition. b. They reduce the price below what would be charged in perfect competition. c. They charge a price that is greater than marginal cost. d. They create a welfare cost. e. All of the preceding are objections to monopolies.