Consider the above figure. Autonomous consumption, in this scenario, is equal to
A) $30. B) $80. C) $60. D) $40.
D
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The opportunity cost of producing a laptop is lower in Laborland than in Utopia while the opportunity cost of producing wheat is lower in Utopia than in Laborland. However, Laborland can produce more of both the goods
i) Can mutually beneficial trade take place between the two countries? Explain your answer. ii) Which country should specialize in the production of which good?
In the United States, the federal income tax is an example of a
A) progressive tax. B) regressive tax. C) flat tax. D) proportional tax.
In Figure 3-4 above, the shift from Ap0 to Ap1 could have been caused by a rise in net exports of
A) 180. B) 750. C) 120. D) 300.
If the rate of interest increases, firms will most likely respond by
A. increasing investment. B. decreasing investment. C. not changing investment. D. increasing capital stock.