Paying interest on external government debt rather than on domestic debt produces:
A. a redistribution of income within the country.
B. no change in the level or distribution of domestic income.
C. a net reduction in domestic income.
D. a net increase in domestic income.
Answer: C
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While waiting in line to buy two tacos at 80 cents each and a medium drink for 90 cents, Jordan notices that the restaurant has a value meal containing three tacos and a medium drink all for $3 . For Jordan, the marginal cost of the third taco would be:
a. zero. b. 50 cents. c. 80 cents. d. $1.
In 2000, a major U.S. oil company began exploration off the southeastern coast of the United States. Suppose the company discovers huge reserves of natural gas. Using the aggregate demand/ aggregate supply model, predict what shifts will occur and what will happen to output and prices in both the long and short runs
A large aircraft manufacturer, like Boeing, may have a cost advantage over a new smaller manufacturer because of:
A. diseconomies of scale. B. economies of scale. C. diminishing returns to a fixed factor of production. D. the principal agent problem is generally less severe for larger firms.
The midpoint formula for elasticity of demand solves the problem of:
A. whether elasticity of demand is really positive or negative. B. whether to use quantity or price in the numerator. C. which price or quantity to use as the initial value of the variable. D. whether to use quantity demanded or supplied.