Current buyers' and sellers' behaviors are correctly expressed by
A. Multiple sets of aggregate supply and demand curves.
B. Many sets of aggregate supply and demand curves.
C. One set of aggregate supply and demand curves.
D. None of the choices are correct.
Answer: C
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In Econland autonomous consumption equals 700, the marginal propensity to consume equals 0.80, net taxes are fixed at 50, investment is fixed at 100, government purchases are fixed at 100, and net exports are fixed at 40. Aggregate expenditure equals
A. 900 + 0.80Y. B. 940 + 0.80Y. C. 990 + 0.80Y. D. 990 + 0.20Y.
William quits his job where he earns an annual salary of $75,000 and opens a management consulting business, charging an hourly rate of $120 . He works out of his home, converting a storeroom into an office. (Zoning restrictions prevent William from renting out the room.) Start-up costs are financed by selling $15,000 worth of bonds he inherited that were earning annual interest payments of $900
. During his first year, William incurs expenses for supplies and utilities that total $3,500 . If William bills 500 hours of consulting time in the first year, he earns an economic profit equal to a. $55,600 b. -$15,000 c. -$19,400 d. -$34,400 e. $41,500
Which of the following statements best represents the attitude of a consumer with a very inelastic demand toward various brands of coffee?
A. "All the brands are exactly the same. I always buy the cheapest." B. "Coffee is coffee; one brand is as good as the rest." C. "My brand is so superior to the rest of the brands that I'm willing to pay a bit more for it." D. "With my limited budget my favorite brand is usually the 'what's on sale' brand."
Why are the gains from trade often difficult to recognize?
A. There are no gains from trade. B. The gains are spread out over a wide variety of goods and consumers. C. The United States does not keep accurate records of employment. D. The gains are in services, which are difficult to measure.