If the marginal propensity to consume (MPC) is 0.75, a $50 decrease in government spending, other things being equal, would cause equilibrium real GDP to:

Player 1 and Player 2 are playing a game in which Player 1 has the first move at A in the decision tree shown below. Once Player 1 has chosen either Up or Down, Player 2, who can see what Player 1 has chosen, must choose Up or Down at B or C. Both players know the payoffs at the end of each branch. Suppose Player 1 and Player 2 enter into a binding agreement in which Player 1 agrees to pay Player 2 a fixed amount of money to get Player 2 to play Up when it is Player 2's turn. How much will Player 1 have to pay Player 2 to get Player 2 to play Up?

A. at least $20. B. $0. C. at least $10. D. at least $50.

Refer to Exhibit 2-9. If Alex and Adam each specialize in the good in which he has a comparative advantage and then engage in trade, ____________________ can consume a combination of goods that lies beyond their PPF

To maximize its profits, a monopsonist will hire labor the quantity of labor at which marginal revenue product of labor

a. is downward sloping and equal to the market wage rate. b. is downward sloping and equal to its marginal labor cost. c. minus marginal labor cost is maximized. d. is maximized.

Because a third of government outlays are linked directly to the CPI, as time passes, the CPI bias means that the government's outlays are

A) larger than needed to keep pace with the cost of living. B) larger than needed to keep pace with the cost of living if the CPI is falling from one year to the next, otherwise the outlays are smaller than needed to keep pace with the cost of living. C) exactly equal to the changes in the cost of living. D) smaller than needed to keep pace with the cost of living. E) smaller than needed to keep pace with the cost of living if the CPI is falling from one year to the next, otherwise the outlays are larger than needed to keep pace with the cost of living.