Refer to the above data. Gross investment is $8 billion, net exports are $4 billion, and government collects a lump-sum tax of $30 billion and spends $30 billion. Assume all taxes are personal taxes and that government spending does not entail shifts in the consumption and investment schedules. The equilibrium GDP will be:
A. $280 billion
B. $290 billion
C. $300 billion
D. $310 billion
D. $310 billion
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Production indifference curves show the combination of inputs that produce a given output.
Answer the following statement true (T) or false (F)
Consider a consumer with preferences for consumption of a composite good (C) and leisure (L) given by the following utility function:
U(C,L) = 2C1/2 + L Denote the consumer's wage rate by w and total time available for labor and leisure is normalized to one. The price of consumption is one. Denote the amount of labor supplied as N, so that N + L = 1. The consumer also earns non-labor income ("allowance") of 0. a. Write out the budget constraint determining feasible allocations of leisure and consumption. b. Compute the optimal bundle of leisure and optimal bundle of consumption. c. Derive the consumer's labor supply function: N*(w, ). d. Determine the effect of increasing non-labor income on the supply of labor (that is, compute the relevant partial derivative). e. How does non-labor income affect the consumption of the composite good, C? f. Compute the effects of an increase in wage on consumption and labor supply. Is leisure a normal good?
Typically, total utility derived from consumption decreases as more of a good is consumed
Indicate whether the statement is true or false
Harold Brown runs a company that sells encyclopedia sets for $250 each. When he employs 10 workers, they can sell 60 sets per week, while only 54 sets are sold when 9 workers are employed. What is the weekly marginal revenue product of the tenth worker?
A. $250. B. $1,250. C. $1,500. D. $15,000.