When analyzing the economy as a whole, ________ substitution from one market to another is impossible.
a) macroeconomic
b) externality
c) microeconomic
d) aggregate
Answer: c) microeconomic
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Suppose that a perfectly competitive firm's marginal revenue equals $12 when it sells 10 units of output. If the marginal cost of producing the 10th unit is $14, to maximize its profit the firm should
A) do nothing because it is already maximizing its profit. B) decrease its production. C) increase its production. D) shut down. E) increase the price it charges for its product.
Gross domestic product
A) includes all the goods and none of the services produced in an economy in a given time period. B) measures the value of the aggregate production of goods and services in a country during a given time period. C) measures the value of labor payments generated in an economy in a given time period. D) is generally less than federal expenditure in any time period.
The problems of asymmetric information exchange arise ultimately because
a. one party to the exchange possesses different information than another b. one party has more information than another c. one party knows nothing d. one party cannot independently verify the information of another e. information is scarce
In Macroland autonomous consumption equals 100, the marginal propensity to consume equals 0.75, net taxes are fixed at 40, investment is fixed at 50, government purchases are fixed at 150, and net exports are fixed at 20. The vertical intercept of the aggregate expenditures model line is
A. 290. B. 0.25. C. 0.75. D. 320.