Profits are part of the
A) factor services. B) monetary value of output.
C) final consumer goods. D) total income.
D
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Price discrimination exists:
A. only in perfectly competitive markets. B. because sellers try to exploit differences in customers’ willingness to pay. C. in all industries, regardless of market structure. D. only when demand is inelastic.
Assume the marginal propensity to consume (MPC) is 0.75 and the economy is in recession with real GDP $1 trillion below full-employment real GDP. To achieve full employment, aggregate demand (AD) must be increased $2 trillion. Following discretionary fiscal policy, government spending should be increased:
a. $0.25 trillion. b. $1 trillion. c. $0.5 trillion. d. $2 trillion.
Suppose that in Australia, the government allows private ownership of chickens but not of cows. If the people of Australia permanently increase their desire to purchase more chicken and beef, in the long run, we would expect
a. the population of chickens to rise and the population of cows to fall. b. the population of cows to rise and the population of chickens to fall. c. the populations of both chickens and cows to increase. d. both chickens and cows to become extinct in Australia unless the government places the animals on the endangered species list.
Define the deadweight loss of a tax