Suppose there was a debate regarding how to spend $1 billion in newly found revenues in the budget. Suppose the most liberal Democrat suggests an increase to Food Stamp (SNAP) allotments. Suppose the most conservative Republican suggests an increase in defense spending. The Republican says that, on average, military spending does the most good, so more is better. The Democrat is arguing that the extra food purchased by the extra spending will increase well-being the most. What is going on here?
A. Only the Democrat is using marginal analysis.
B. Both are employing marginal analysis, just from different perspectives.
C. Neither are using marginal analysis.
D. Only the Republican is using marginal analysis.
Answer: A
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Would you rather receive $100 in eight years paying an interest rate of 10% or be given 48 dollars today?
A) I would rather receive 48 dollar today. B) I would rather receive $100 in eight years. C) I am indifferent between the two options. D) I cannot determine which I would prefer.
In calculating the Consumer Price Index
A. the price of each item is allowed to change between the base period and current year but the quantity is held constant. B. the quantity of each item is allowed to change between the base period and current year but the price is held constant. C. both the price and quantity of each item is allowed to change between the base period and current year. D. neither price nor quantity of each item is allowed to change between the base period and current year.
In Econland total output is $8 billion, population equals 500,000 people, and, of these, 400,000 are employed workers. Output per person in Econland equals ________ and average labor productivity equals ________.
A. $20,000; $20,000 B. $16,000; $20,000 C. $20,000; $16,000 D. $16,000; $16,000
A firm may express increasing, constant and decreasing returns to scale for various levels of output
Indicate whether the statement is true or false