In Macroland, autonomous consumption equals 100, the marginal propensity to consume equals 0.75, net taxes are fixed at 40, investment is fixed at 50, government purchases are fixed at 150, and net exports are fixed at 20. Equilibrium output in this economy equals
A. $1,160.
B. $1,440.
C. $1,000.
D. $1,280.
Answer: C
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a. A change in the level of saving b. A change in consumer expectations about future prices c. A change in household wealth d. A change in investment spending e. A change in the interest rate
Why is defining a market difficult?
a. Government regulations about the exchange of goods and services are complex. b. The conditions under which buyers and sellers exchange goods and services can vary. c. Scholars cannot agree on a standard definition. d. Urban and rural areas have different ways of exchanging goods.
Suppose the Herfindahl indexes for industries A, B, and C are 1,200, 5,000, and 7,500 respectively. These data imply that:
A. market power is greatest in industry A. B. market power is greatest in industry B. C. market power is greatest in industry C. D. industry A is more monopolistic than industry C.
Which of the following is most subject to the lemons problem?
A) credence goods B) homogeneous goods C) search goods D) inferior goods