According to the traditional Keynesian analysis, if the government increases spending by $20 million, then
A. consumption will decrease, and so total expenditures will increase by less than the $20 million.
B. consumption will remain the same, and so total expenditures will increase by exactly $20 million.
C. consumption will increase, and so total expenditures will increase by more than $20 million.
D. consumption will increase or decrease, and so total expenditures will increase or decrease depending on the change in consumption.
Answer: C
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Assume that as a firm decreases its price its total revenue decreases. Which of the following is a possible value of its price elasticity of demand?
A. 0.4 B. 1 C. 1.4 D. 4
Refer to Table 4-3. The table above lists the marginal cost of cowboy hats by The Waco Kid, a firm that specializes in producing western wear. If the market price of cowboy hats is $50, producer surplus is
A) $0. B) $4. C) $62. D) $138.
A subsidy to buyers has been placed in the market in the graph shown. The result is:
A. a higher quantity bought and sold at a higher price.
B. customers are worse off than before the subsidy.
C. producers are worse off than before the subsidy.
D. None of these is true.
"Near monies" are: a. included in the M1 definition of the money supply
b. highly liquid assets that are close substitutes for money. c. stocks, bonds, and real estate. d. U.S. notes and Federal Reserve notes.