Refer to the above figure. The figure represents the consumption function for a consumer. The distance between C and D represents
A. the amount of saving.
B. the point where saving equals zero.
C. the amount of autonomous consumption.
D. the amount of dissaving.
Answer: A
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A gamble can be described as "fair" if the expected value of the gamble (including any costs of play) is
a. positive. b. zero. c. negative. d. one.
Within the Keynesian model, the multiplier effect tends to
a. smooth out the up- and down- swings of the business cycle. b. promote price stability. c. magnify small changes in spending into much larger changes in output and employment. d. reduce the impact of an increase in investment on output and employment.
Ceteris paribus means
A. Holding constant the determinant of demand or supply that you are interested in examining. B. Changing prices to see how demand or supply shifts. C. Allowing the free market to decide, not government. D. Holding everything constant except for the variables you are interested in examining.
Consider a market characterized by the following inverse demand and supply functions: PX = 50 - 4QX and PX = 10 + 2QX. Compute the surplus producers receive when a $30 per unit price floor is imposed on the market.
A. $75. B. $35. C. $25. D. $50.