If Claudette gets a permanent increase in her income of $1000 per year, she saves an extra $200 this year and consumes an extra $800 this year. If the increase in income had been temporary instead of permanent, she would have saved ________ of the extra income.
A. less than $200
B. exactly $200
C. more than $200
D. none
Answer: C
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The producer surplus of making and selling 10 chairs is found by
A) multiplying the selling price by 10. B) subtracting the marginal cost from the selling price for each chair and summing the differences for all 10 chairs. C) subtracting from the total revenue the cost of producing one chair multiplied by 10. D) adding the marginal cost and the price of all 10 chairs. E) None of the above answers is correct.
An increase in per capita income will generally lead to
a. more material goods, but a decline in the quality of the environment. b. a reduction in life expectancy because working conditions are less desirable. c. an increase in the number of hours worked by residents. d. an increase in the living standards of most people.
Economists who believe that the economy has a strong self-correcting mechanism argued that, after September 11, 2001, the economy needed
A. a quick and expansionary fiscal policy stimulus. B. a quick and expansionary monetary policy stimulus. C. only a short time to return to equilibrium full employment. D. President Bush to propose a large budget stimulus package.
When the firm increases output and the costs rise disproportionately slower, then the long-run average cost curve is ________ and the firm is experiencing ________.
A. horizontal; constant returns to scale B. downward sloping; constant returns to scale C. upward sloping; diseconomies of scale D. downward sloping; economies of scale