Marginal cost is:
A. the additional cost a firm will incur by producing one additional unit of output.
B. the total cost a firm will incur by producing a given level of output.
C. the costs that sit on the margin, that do not change regardless of the level of output.
D. the additional output a firm will get by employing one additional unit of input.
Answer: A
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A personal tax cut of $50 billion will affect income differently than an increase in government spending by $50 billion because
A. households may save part of the additional income from the tax cut. B. the increase in government spending is less expansionary than the increase in taxes. C. the increase in government spending will produce a political business cycle. D. households may consume more than the additional income from the tax cut.
A rise in the price of good A shifts the ________ good B rightward if the cross elasticity of demand between A and B is ________
A) demand curve for; negative B) demand curve for; positive C) supply curve of; negative D) supply curve of; positive
Imposition of an output tax on all firms in a competitive industry will result in
A) a downward shift in each firm's marginal cost curve. B) a downward shift in each firm's average cost curve. C) a leftward shift in the market supply curve. D) the entry of new firms into the industry. E) higher profits for the industry as price rises.
Which of the following conditions must be satisfied for the demand for domestic goods to be equal to the domestic demand for goods?
A) X = ?IM B) X = 0 C) G - T = 0 D) S = I E) X = IM/?