Explain what it means to choose at the margin and illustrate with three choices at the margin that you have made today
What will be an ideal response?
Choosing at the margin means choosing to do a little more or a little less of some activity. Three common examples students encounter are: a) When a student faces a chemistry and an economics final exam in one day, the student must determine whether spending the last hour studying a little more chemistry or a little more economics will yield a better contribution (marginal benefit) to his or her overall GPA. b) A college student buying a computer must decide whether the marginal benefit of adding 1 GB of additional memory is worth the marginal cost of the additional memory. c) A student football fan with a choice of a cheap seat in the student bleachers located at the far end of the playing field or a more expensive seat located on the 30 yard line must determine whether the marginal benefit of watching the game from a better seat is worth the marginal cost of the higher ticket price.
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Measured as a share of the economy, government spending
a. has been between 10 and 15 percent of the U.S. economy since 1930. b. has been between 20 and 25 percent of the U.S. economy since 1930. c. rose from less than 10 percent in 1929 to over 35 percent in 2012. d. declined from more than 50 percent in 1929 to approximately 25 percent in 2012.
A sterilized foreign exchange intervention would:
A. leave the central bank's balance sheet unchanged. B. alter the liability side of the central bank's balance sheet but leave the asset side unchanged. C. alter the asset side of a central bank's balance sheet but leave the domestic monetary base unchanged. D. not alter the central bank's holdings of international reserves.
If short-run equilibrium output equals 10,000, the income-expenditure multiplier equals 10, the mpc equals 0.9, and potential output (Y*) equals 9,000, then taxes must be increased by approximately ________ to eliminate any output gap.
A. 90 B. 111 C. 100 D. 1,000
Which of the following companies was NOT broken up by the government?
A. Standard Oil B. AT&T C. American Tobacco D. Office Depot