A tax on gasoline encourages people to drive smaller, more fuel-efficient cars. Which principle of economics does this illustrate?
a. People face tradeoffs.
b. The cost of something is what you give up to get it.
c. Rational people think at the margin.
d. People respond to incentives.
d
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Economics is the study of the logic of
A. rational decisions. B. decision-making activities. C. ends and means. D. choosing options from those available. E. All of the responses are correct.
Following Keynesian economics, and assuming a marginal propensity to consume (MPC) of 0.75, an increase in federal government spending of $100 billion at below full employment would be expected to shift the aggregate demand curve by $300 billion to the right
a. True b. False Indicate whether the statement is true or false
The US Federal government is probably the ________ in the world.
A. riskiest lender. B. riskiest borrower. C. safest borrower. D. safest lender.
Refer to Scenario 13.1 below to answer the question(s) that follow. SCENARIO 13.1: The government of Catalina Island is currently inviting investors to bid for the exclusive right to provide cable television service to its residents. The market demand for this service is P = 55 - 0.01Q, where Q is the number of households that would subscribe to the cable service and P is the monthly fee charged to the subscribers. The associated marginal revenue curve is MR = 55 - 0.02Q. Universal Entertainment is interested in bidding for the right to provide cable service on Catalina Island. It has a constant average and marginal cost of $15 for providing cable service to each household.Refer to Scenario 13.1. At what level of output (number of households) is Universal Entertainment's total
revenue maximized? A. 2,500 B. 2,750 C. 5,000 D. Indeterminate from the given information