What can we say about APC + APS and MPC + MPS?
A) Each must sum to 1.
B) MPC + MPS = 100% of total income.
C) APC + APS = 100% of the change in income.
D) MPC + MPS always equals 1, but the sum of APC + APS can vary.
A
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The AB Manufacturing Company has hired an economist to evaluate its financial situation. She explains to the board of directors that the company is making zero economic profit. Should the company go out of business?
Governments can most effectively encourage a firm to produce the efficient level of output of a good whose production causes a beneficial externality by
A. increasing the demand at every price for the good. B. subsidizing the production of the good. C. taxing the production of the good. D. imposing a price ceiling on the good.
The Clayton Act is an antitrust law that was passed to
A) outlaw monopolization. B) address loopholes in the Sherman Act. C) prohibit charging buyers different prices if the result would reduce competition. D) toughen restrictions on mergers by prohibiting mergers that reduce competition.
In international trade, all payments and gifts that are related to the purchase or sale of both goods and services are referred to as the
A. current account. B. financial account. C. official reserve transactions account. D. labor account.