Rosencrantz's base pay last year was $50,000 and he spent $48,000, thus saving $2,000. At the end of the year, he received a bonus of $2,000 and he spent $200 of it, saving the other $1,800. What is his marginal propensity to consume?

A. .04
B. .10
C. .96
D. .02


Answer: B

Economics

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________ are one source of involuntary unemployment during recessions

A) Downwardly rigid wages B) Lower corporate tax rates C) Flexible wages D) Higher income tax rates

Economics

The game between music stores in the figure shows us that:

This figure displays the choices and payoffs (company profits) of two music shops-MiiTunes and The Rock Shop. MiiTunes is an established business in the area deciding whether to charge its usual high prices or to charge very low prices, in the hopes that a new business will not be able to make a profit at such low prices. The Rock Shop is trying to decide whether or not it should enter the market and compete with MiiTunes.

A. only The Rock Shop has a dominant strategy, and so the outcome cannot be predicted.
B. only MiiTunes has a dominant strategy, and so the outcome cannot be predicted.
C. neither store has a dominant strategy, and so the outcome cannot be predicted.
D. None of these statements is true.

Economics

At the utility maximizing choice, the marginal utility of a baseball bat is 60 utils, while the marginal utility of a football is 30 utils. If the price of the baseball bat is $20, the price of the football is _____

a. $10 b. $20 c. $15 d. $5

Economics

A policy that raises taxes or reduces government spending is called:

A. a contractionary monetary policy. B. a contractionary fiscal policy. C. an expansionary monetary policy. D. an expansionary fiscal policy.

Economics