Economics:
a. is a natural science like biology and chemistry
b. is a science built on survey data and declared preferences (what people say they are going to do) not on revealed preferences (how people actually behave).
c. is a science concerned with reaching generalizations about human behavior, not unlike sociology or psychology.
d. is concerned with predicting business conditions in the future, not with the current state of the stock market.
c
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In Econland autonomous consumption equals 200, the marginal propensity to consume equals 0.9, net taxes are fixed at 100, investment is fixed at 200, government purchases are fixed at 300, and net exports are fixed at 50. Short-run equilibrium output in this economy equals:
A. 6600 B. 850 C. 7500 D. 5000
Suppose a new cost-saving device will forever generate $1,000 net savings per year to a firm. The device costs $10,000. Using the Internal Rate of Return approach, will the firm make the investment?
A) definitely B) definitely not C) if the interest rate exceeds 10% D) if the interest rate is less than 10%
GDP does count:
a. state and local government purchases. b. spending for new homes. c. changes in inventories. d. none of these.
At a price of $299.95, the manufacturer of a portable gas-powered generator is willing to produce 19,000 units per quarter. At a price of $349.95, it is likely that the manufacturer will be willing to produce
a. less than 19,000 units per quarter. b. It is impossible to predict the effect of a higher price on the number of units of a product that a firm will be willing to produce. c. more than 19,000 units per quarter. d. 19,000 units per quarter.