The above figures show the market for gasoline. Which figure(s) shows the effect of a freezing cold winter which drives up the price of home heating oil (a substitute in production for gasoline because each is made from crude oil)?
A) Figure B
B) Figure C
C) Figure D
D) Figures B and C
B
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Other things being constant, if the marginal propensity to save (MPS) is 0.1, and private investment spending falls by $100 million, then real Gross Domestic Product (GDP)
A) increases by $1 billion. B) increases by $90 million. C) decreases by $1 billion. D) decreases by $10 million.
The natural unemployment rate
A) is a constant figure of about 4 percent. B) fluctuates with the rate of inflation. C) is the unemployment rate that occurs when the economy is at full employment. D) is equal to cyclical unemployment.
The value of the best alternative sacrificed to obtain something you want is referred to as
A. opportunity cost. B. tangible cost. C. accounting cost. D. explicit cost.
We are given the individual demand curves for all of the people that consume ice cream. Which statement is TRUE about the market demand curve for ice cream?
A. The market demand curve is obtained by horizontally summing the individual demand curves. B. The market demand curve cannot be obtained because information on prices is missing. C. The market demand curve cannot be obtained from individual demand curves. D. The market demand curve is obtained by vertically summing the individual demand curves.