If Stimpson University increases tuition in order to increase its revenue, it will
a. not be successful if the demand curve slopes downward
b. be successful if demand is elastic
c. be successful if demand is inelastic
d. be successful if supply is elastic
e. be successful if supply is inelastic
C
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Define transfer payments and explain why they are not included in the government purchases section of the GDP accounts
What will be an ideal response?
For a firm that is competitive in both product and factor markets, the value of the marginal product of labor: a. is constant and equal to the market wage
b. increases, causing the labor supply curve to slope upward. c. declines because the marginal product of labor diminishes as the number of workers rises. d. declines because a competitive firm must lower product price in order to increase sales.
Did the large U.S. budget deficits in the 1980s “crowd out” investment as some economists had predicted?
A. Yes, investment dropped as predicted. B. Yes, although investment did not fall nearly as much as some had feared. C. No, investment was not crowded out, but net exports dropped. D. No, no crowding out at all occurred.
Refer to the information provided in Figure 24.4 below to answer the question(s) that follow.
Figure 24.4Refer to Figure 24.4. If aggregate expenditures are represented by AE2 and government spending increases by $100 billion, equilibrium aggregate output increases by $________ billion.
A. 100 B. 300 C. 500 D. 800