Compare the MPCs in Canada and the U.S. If it is 0.50 in Canada and 0.90 in the U.S., then
a. the income multiplier is smaller in the U.S. and the same change in aggregate expenditure in Canada and the U.S. creates a larger change in national income in theU.S. than it does in Canada
b. the income multiplier is larger in the U.S. and the same change in aggregate expenditure in Canada and the U.S. creates a larger change in national income in theU.S. than it does in Canada
c. the income multiplier is larger in the U.S. and the same change in aggregate expenditure in Canada and the U.S. creates a smaller change in national income inthe U.S. than it does in Canada
d. the income multiplier is smaller in the U.S. and the same change in aggregate expenditure in Canada and the U.S. creates a smaller change in national income inthe U.S. than it does in Canada
e. the income multiplier is larger in the U.S. but the same change in aggregate expenditure in Canada and the U.S. creates the same change in national income inthe U.S. as it does in Canada
B
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Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. The opportunity cost for the United States is:
A. 5 apples for each pair of shoes. B. 5 pairs of shoes for each apple. C. 1/5 apple for each pair of shoes. D. 1 pair of shoes for every 2 apples.
In monopolistic competition, a firm has a limited degree of "price-making" ability. This means that the firm will
A. set price above marginal cost. B. set price equal to marginal cost. C. always earn an economic profit. D. produce at minimum average total cost.
According to the textbook, demand and supply determine prices, and prices allocate scarce resources in the economy.
a. true b. false
Refer to Table 2-14. What is Ireland's opportunity cost of producing one guitar?
A) 0.2 motorcycles B) 5 motorcycles C) 8 motorcycles D) 32 motorcycles