Refer to Table 11-7. What is the variable cost of production when the firm produces 115 lanterns?
A) $1,556 B) $1,157 C) $956 D) $10.05
B
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A central concept of New Keynesian macroeconomics is that in setting prices and wages, self-interested firms and workers are acting
A) irrationally, since their self-interest is badly damaged by the ensuing business cycles. B) irrationally, since this imposes business cycles on everyone not part of their arrangements. C) rationally, since they do not bear a fully offsetting cost of business cycles. D) rationally, since the total welfare loss of business cycles must be small enough to justify the price and wage setting.
What is the marginal propensity to consume for the economy described in Scenario 10.1?
a. 0.45 b. 0.85 c. 0.65 d. 0.35 e. Cannot be determined
If the world price of a good is lower than its domestic equilibrium price, the country will:
a. import a quantity of the good equal to the difference between the quantity demanded domestically and the quantity supplied domestically. b. export a quantity of the good equal to the difference between the quantity demanded domestically and the quantity supplied domestically. c. import a quantity of the good equal to the difference between the quantity demanded domestically and the quantity supplied by foreign producers. d. export a quantity of the good equal to the difference between the quantity demanded by foreign consumers and the quantity supplied domestically. e. import a quantity of the good equal to the difference between the quantity demanded by foreign consumers and the quantity supplied by foreign producers.
The deadweight loss from a tax of $x per unit will be smallest in a market
a. in which demand is elastic and supply is inelastic. b. in which demand is inelastic and supply is elastic. c. in which demand is inelastic and supply is inelastic. d. None of the above are correct; we need to know the value of x in order to determine the answer.