Refer to the above figures. Which of the panels would be consistent with the situation in which external benefits exist?
A) Panel 1
B) Panel 2
C) Panels 1 and 2
D) neither panel
B
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When Safeway supermarkets in the United States buys strawberries from Mexico
A) it uses dollars to pay Mexican farmers. B) it uses pesos to pay Mexican farmers. C) it may use any currency it chooses. D) the transaction shows up in the U.S. capital account.
If a fall in investment demand of 100 units causes equilibrium income to fall by 150 units in the simple Keynesian model, then the marginal propensity to save must be
a. .25. b. 1.5. c. .5. d. 1/3. e. 2/3.
If Arnold has a positive rate of time preference, he desires to
a. save in case of inflation b. consume now rather than later c. invest in stocks and bonds d. invest in education e. plan for retirement
The price elasticity of demand is
a. irrelevant to the determination of prices, incomes, and interest rates b. indeterminate in most cases c. the percentage change in price divided by the percentage change in quantity demanded d. the percentage change in price with respect to the percentage change in quantity supplied e. the percentage change in quantity demanded divided by the percentage change in price