Suppose the economy is initially at equilibrium, in which total planned real expenditures equals real GDP. Which of the following will occur if there is an increase in autonomous investment?
A. Inventories will not change and production of goods and services will not change either.
B. Inventories will decrease immediately and production of goods and services will increase until real GDP catches up with total planned real expenditures.
C. Both inventories and production of goods and services will increase.
D. Inventories will increase immediately and production of goods and services will decrease until real GDP catches up with total planned real expenditures.
Answer: B
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When an outcome is ________, social surplus is ________
A) Pareto inefficient; maximized B) Pareto efficient; maximized C) Pareto efficient; minimized D) Pareto inefficient; minimized
Suppose that at current consumption levels an individual's marginal utility of consuming an extra hot dog is 10 whereas the marginal utility of consuming an extra soft drink is 2 . Then the MRS (of soft drinks for hot dogs)—that is, the number of hot dogs the individual is willing to give up to get one more soft drink is
a. 5 b. 2 c. 1/2 d. 1/5
In the market for loanable funds in an open economy, the demand for loanable funds:
A. can be demanded for domestic investment or international investment. B. is equal to national income. C. is equal to private investment. D. is equal to public investment.
Which statement is true?
A. Industry X has a higher Herfindahl-Hirschman index than Industry Y.
B. Industry Y has a higher Herfindahl-Hirschman index than Industry Z.
C. Industry Z has a higher Herfindahl-Hirschman index than Industry X.
D. Industries X, Y, and Z have the same Herfindahl-Hirschman index.