For which of the following goods is the income elasticity of demand likely highest?
a. water
b. diamonds
c. hamburgers
d. housing
b
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In an economy with no income taxes or imports, if the MPC is .75, the multiplier is
A) 0.50. B) 4.00. C) 0.33. D) 3.00. E) 0.25.
When does a private solution to a negative externality fail to allocate resources efficiently?
What will be an ideal response?
The economic hardship resulting from a financial crises is severe, however, there are also social consequences such as
A) increased crime. B) difficulty getting a loan. C) currency devaluations. D) loss of output.
A profit-maximizing firm will continue to expand output:
a. as long as the revenues from the production and sale of an additional unit exceeds the average cost of the unit. b. until the average cost of producing the good or service is at a minimum. c. as long as the revenues from the production and sale of an additional unit exceeds the marginal cost of the unit. d. until the marginal cost of producing a good or service is at a minimum.