Which of the following examples would most likely cause the AVC curve to move up?
a. paying rent
b. hiring more employees
c. reducing the cost of maintaining equipment
d. paying insurance
b. hiring more employees
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Suppose a market is in equilibrium and then a price ceiling is established below the equilibrium price. Which of the following will happen?
a. quantity demanded will decrease b. a surplus will develop c. a shortage will develop d. the quantity sold will rise e. the market will remain in equilibrium
As a result of the recent financial crisis, some analysts believed that the MPC in the U.S. declined. If this is true, the value of the multiplier is now
A. smaller. B. larger. C. the same. D. magnified to a larger amount.
During recessions which type of spending falls?
a. consumption and investment b. investment but not consumption c. consumption but not investment d. neither consumption nor investment
Suppose that Steve and Susie each perceives $200 of marginal benefit from a proposed new park, whereas Elizabeth perceives $800. If the proposed tax levied on each for the park would be $300, a majority vote will:
A. defeat this project and resources will be underallocated to it. B. defeat this project and resources will be efficiently allocated. C. pass this project and resources will be underallocated to it. D. pass this project and resources will be overallocated to it.