A new major league baseball expansion team is moving to your town. It will inject spending worth $40 million into your local economy initially. The Chamber of Commerce predicts that this will generate a total of $500 million in additional income for your town. The team owners think that this is an underestimate. What do you need to know to figure out who is right? Explain
You need to know the size of the income multiplier. If it is equal to 12.5, then the Chamber of Commerce is
right ($40 × 12.5 = $500). If it is greater than 12.5, then the team owners are right.
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Which of the following is true about a risk-averse individual facing a full menu of actuarily fair insurance contracts to choose from?
A. The individual will "over-insure" if consumption is more meaningful in the good state. B. The individual will "over-insure" if consumption is more meaningful in the bad state. C. The individual will fully insure when tastes are state-independent. D. (a) and (b) are true. E. (a) and (c) are true. F. (b) and (c) are true. G. All of the above. H. None of the above.
In the last 20 years, all of the following measures of the manufacturing sector have declined except:
a. total employment in manufacturing. b. manufacturing employment as a share of the labor force. c. manufacturing output as a share of GNP. d. total manufacturing output.
Textile workers in the U.S. complain that they cannot compete with low cost foreign textile producers. While some U.S. textile workers may lose their jobs, an advantage is
a. the U.S. gets cheaper textiles b. U.S. imports will become more expensive so U.S. domestic producers gain c. workers in other countries will buy more U.S. clothing exports d. the U.S. can retaliate and its exporting strength is greater e. the U.S. can dump its textiles on other markets without fearing retaliation because U.S. textiles are made with high cost labor
The intersection of a firm's marginal revenue and marginal cost curves determines the level of output at which
a. total revenue is equal to variable cost. b. total revenue is equal to fixed cost. c. total revenue is equal to total cost. d. profit is maximized.