Refer to Figure 16.1. An increase in the real interest rate is best represented by a movement from
A) point A to point B.
B) point B to point A.
C) point A to point C.
D) point C to point A.
C
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For the convenience of analyzing the part of the deficit that is sensitive to fiscal policy, the actual deficit is divided into which of the following components?
A. Frictional and seasonal deficits. B. Automatic stabilizers and autonomous consumption. C. Structural and cyclical deficits. D. C, I, G, X, and M.
In pursing its own interest, an oligopoly firm will decide to increase production by 1 unit as long as
a. there is no output effect. b. there is no price effect. c. the output effect is larger than the price effect. d. the price effect is larger than the output effect.
Consumer surplus is given by the area:
a. above the supply curve but below the price b. below the supply curve c. below the demand curve but above the price d. below the demand curve e. none of the above
Lionel's Lawn Care is a company that maintains residential yards. Lionel's cost for his standard package of mowing, edging, and trimming is $15, and he charges $25 for this service. For a total price of $40, Lionel will also trim shrubs, a service that
adds an additional $10 to the total cost of the standard package. Should Lionel continue to offer the shrub-trimming service? A) yes, his marginal benefit is greater than his marginal cost B) yes, but only if he raises the price of the standard package C) no, his marginal benefit is less than his marginal cost D) More information is needed for Lionel to make this decision.