Suppose 100 citizens each derive marginal benefit from submarines according to the function MB = 10 - Q. If subs cost $100 each to produce, what is the efficient quantity of submarines?
What will be an ideal response?
The market demand is SMB = 1000 - 100Q. Setting this equal to the MC of 100 yields a quantity of 9. If the cost is shared equally, each citizen pays $1 for the ninth submarine, which they each value at $1.
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Which of the following is NOT a simplifying assumption in the simple Keynesian model?
A) There is no foreign trade. B) Net investment and gross investment are equal. C) All profits are distributed to the business owners. D) Real disposable income equals government purchases of goods and services.
Explain what would happen to the equilibrium price and quantity of iPhones if the supply of iPhones increased while the demand for iPhones also increased
What will be an ideal response?
Nearly _____________ of the world's people have never made a phone call.
Fill in the blank(s) with the appropriate word(s).
As a result of trade, specialization in the Ricardian model tends to be
A) complete with constant costs and with increasing costs. B) complete with constant costs and incomplete with increasing costs. C) incomplete with constant costs and complete with increasing costs. D) incomplete with constant costs and incomplete with increasing costs. E) dependent on the specific opportunity costs involved in production.