Because resources are scarce, the opportunity cost of investment in capital is
A. infinite.
B. forgone present consumption.
C. zero.
D. forgone future consumption.
Answer: B
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If the marginal propensity to consume is 0.75, the marginal propensity to save is
A) 0.25. B) 0.5. C) 1. D) 3.
In Country Z, the government simultaneously decreases its expenditures by $20 billion and decreases taxes by $20 billion. If the MPS is equal to 0.2, the government's action ________ real GDP by ________
A) decreases; $100 billion B) decreases; $20 billion C) decreases; $80 billion D) has no effect on; $0
________ , the higher the price elasticity of demand
a. The lower the availability of substitutes b. The greater the importance of the product in the consumer's budget c. The lesser the time period the consumer has to respond to a price change d. The greater the ability of the product to signify prestige
If individuals can credibly cooperate and split the gains, which payoff is the most likely? A: Not CheatA: CheatB: Not CheatA: 1, B: 50A: 1, B: 1B: CheatA: 2, B: 1A: 5, B: 5
A. 2, 1 B. 5, 5 C. 1, 11 D. 1, 1