Figure 4-1 shows the supply and demand for socks. If a price floor of $10 per pair is
imposed by the government, the number of pairs actually purchased will be
Patents allow manufacturers to block the entry of new firms into an industry through
The distinguishing characteristics of different market structures include
According to the law of comparative advantage, individuals and economies should
specialize in producing those goods and services in which they have a comparative
advantage.
Assume a closed economy. If consumption spending is $6.2 trillion, investment
spending is $2.5 trillion, net taxes are $1.5 trillion and total income is $11 trillion, how
much must government purchases be?
a. $2.3 trillion
b. $0.8 trillion
c. $3.3 trillion
d. $7 trillion
e. cannot be determined without more information
In a firm’s planning horizon, the long run refers to
If a firm experiences constant returns to scale at all output levels, then its long-run
average total cost curve would
If the marginal propensity to consume is 0.7, the expenditure multiplier is
a. 7.0
b. 0.7
c. 3.0
d. 3.3
e. not determinable without additional information.
If net taxes were lowered from $5,000 to $1,000, the marginal propensity to consume is
0.75, and autonomous consumption spending is $10,000, by how much would
consumption increase?
a. $3,000
b. $1,250
c. $7,500
d. $3,750
e. $750
Figure 7-1 shows the amounts of coal that a mining company could produce per week
by changing the number of workers while capital and technology remain constant.How
many workers could the mine hire before the marginal product of labor begins to
decline?
If the price of good X (measured on the horizontal axis of a budget line diagram)
increases at the same time that the price of good Y (measured on the vertical axis)
decreases, the budget line