The income multiplier is 5 when the marginal propensity to consume is 0.8 for an economy
Indicate whether the statement is true or false
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For any firm, price always equals
A. average revenue. B. marginal revenue. C. marginal cost. D. marginal profit.
If a production process creates pollution, a competitive market produces excessive pollution because
A) private marginal cost of pollution exceeds its social marginal cost. B) social marginal cost of pollution exceeds its private marginal cost. C) the marginal benefit of pollution to the firm is zero. D) zero pollution is optimal.
Why is barter less efficient than using money?
What will be an ideal response?
Hannah and Marla plan to drive cross-country in Marla’s car after graduation and split the estimated $300 gas costs and 30 hours of driving. Their friend Sarah asks to join the trip and split the costs. Which of the following accurately describes the difference between average and marginal costs of adding a third traveler to the trip?
a. Average costs are increased from $300 to $450; marginal costs are reduced to 10 hours of driving per person. b. Average costs of travel remain the same; marginal costs are increased by Sarah’s share of beverages and snacks. c. Average costs fall from $150 to $100 per person; marginal costs are minimal and offset by Sarah’s help with driving. d. Average costs are increased by adding a third person; marginal costs are unchanged because the car is already going.