Use the following data to answer the next question.The disposable income (DI) and consumption (C) schedules are for a private, closed economy. All figures are in billions of dollars.Disposable IncomeConsumption$0$88080160152240224320296400368If consumption increases by $10 billion at each level of disposable income, the marginal propensity to consume will
A. change, but the average propensity to consume will not change.
B. not change, but the average propensity to consume will change.
C. change, and the average propensity to consume will change.
D. not change, and the average propensity to consume will not change.
Answer: B
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Which of the following is likely to happen if consumption in an economy falls?
A) Asset prices rise. B) Mortgage defaults fall. C) Labor supply falls. D) Layoffs rise.
A firm's long-run average cost curve shows the ________ average cost at which it is possible to produce each output when the firm has had ________ time to change both its labor force and its plant
A) highest; sufficient B) lowest; sufficient C) lowest; insufficient D) highest; insufficient E) average; sufficient
When a monopoly price discriminates, it
A) increases the amount of consumer surplus. B) decreases its economic profit. C) converts consumer surplus into economic profit. D) converts economic profit into consumer surplus. E) has no effect on the deadweight loss in the market.
In a perfectly competitive market, a firm's short-run supply curve is
A) its total cost curve. B) its marginal cost curve equal to or above the point of intersection with its average variable cost curve. C) its average variable cost curve below the point of intersection with its total cost curve. D) its total cost curve between the shutdown point and the break-even point.