If intended investment is $2 billion, and unwanted inventory is $0, then we know that all of the following statements are true except
a. consumption spending is $2 billion
b. saving = $2 billion
c. actual investment = $2 billion
d. the economy is in equilibrium
e. national income equals aggregate expenditure
A
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Refer to Figure 10-7. Suppose the price of Pilates sessions rises to $30 while income and the price of Yoga sessions remain unchanged. What is her new optimal bundle?
A) still remains at bundle A. B) bundle B. C) bundle C. D) bundle D.
Determining the optimal choice of input combinations generally does not involve
a. substitution of one input for another. b. fixing the level of technology in the long run. c. minimizing cost, given the prices of inputs. d. assessing the productivity of various inputs.
Imagine that there is a group of workers, group B, which has an average productivity of $9 per hour. Suppose workers from group A have an average productivity of $15 per hour and that employers have a productivity test that is 100% accurate 1/3 of the time, but has no value 2/3 of the time. If a worker from group B took the same productivity test that was given to workers in group A, what is the best estimate of the VMP for this worker if his test score is $21 per hour?
A. $21 B. $13 C. $17 D. $18
If a firm in a perfectly competitive market faces the cost curves in the graph shown and observes a market price of $10, the firm:
A. can make positive profits by producing where MC = MR. B. cannot make positive profits and should shut down in the short run. C. can make positive profits by producing more than 43 units. D. should continue to operate in the short run, but plan to exit in the long run.