You are the manager of a firm that sells its product in a competitive market at a price of $40. Your firm's cost function is C = 60 + 4Q2. The profit-maximizing output for your firm is:
A. 5.
B. 10.
C. 4.
D. 15.
Answer: A
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If fewer families choose to purchase medical insurance because of rising health insurance premiums, then:
A. the frequency of illness in the general population will fall. B. those who remain insured will tend to spend less on health care. C. those who remain insured will tend to have lower-than-average rates of illness. D. those who remain insured will tend to have higher-than-average rates of illness.
The IS curve shows a series of equilibrium points in the goods market for various levels of
A) investment and interest rates. B) investment and money supply. C) income and interest rates. D) inflation and unemployment.
The marginal propensity to save is:
a. the change in saving induced by a change in consumption. b. (change in S) / (change in Y). c. 1 ? MPC / MPC. d. (change in Y ? bY) / (change in Y). e. 1 ? MPC.
If the MPC equals 0.80 then:
A. the MPS equals 1.20. B. the multiplier equals 0.20. C. the multiplier equals 1 divided by 0.80. D. the multiplier equals 5.