If the marginal propensity to save (MPS) is 0.10, the value of the spending multiplier is:
A. 1.
B. 9.
C. 10.
D. 90.
Answer: C
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Criticisms of the Brander-Spencer model include all EXCEPT which of the following?
A) the problem of insufficient information B) the problem of likely foreign retaliation C) the problem of harm to interests of consumers D) the problem of adverse effects of trade policy politics E) the problem of simultaneously causing harm to other industries
Suppose a victim of an accident brings the injurer to court. You are hired to determine the amount of damages
You are specifically asked to find a measure of the amount of money needed to restore the victim to the position he was in prior to the accident. What welfare measure will provide the most accurate measure of this amount? A) compensating variation B) equivalent variation C) consumer surplus D) the loss of utility
A government-sponsored good is one that
A) is desirable to no one but ruled desirable by the court system nonetheless. B) everyone agrees is socially desirable. C) freely competitive markets have determined is socially desirable. D) the political process has determined is socially desirable.
Assume that an individual consumes only coffee and bagels and that the last cup of coffee yields 12 utils and the last bagel 6 utils. If the price of a cup of coffee is $1 and the price of the bagel is $.50, we can conclude that the:
a. consumer should consume more coffee and fewer bagels. b. price of coffee is too high relative to bagels. c. consumer should consume less coffee and more bagels. d. consumer is in equilibrium.