Assume the income elasticity for a particular good has been estimated to be -0.68. Based on this information, we can infer that the good is inferior and a necessity. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
As the price of milk increases, what would reasonably be expected to happen to the equilibrium price and equilibrium quantity of cereal? (Milk and cereal are complements.) A) Equilibrium price would increase and equilibrium quantity would decrease. B) Equilibrium price and quantity would both decrease. C) Equilibrium price would decrease and equilibrium quantity would increase. […]
Date: September 10th, 2020
The function that shows the inverse relationship between planned consumption and investment spending and the real interest rate, all else constant, is called the: A) interest-related expenditure function. B) aggregate expenditure function. C) consumption function. D) investment function. ANSWER A
Date: September 10th, 2020
Assume declining profits in the market for Internet service force several firms in the area to drop out of the market. All else constant, this would cause the: A) equilibrium price and quantity to decrease. B) equilibrium price and quantity to increase. C) equilibrium price to increase and equilibrium quantity to decrease. D) equilibrium price […]
Date: September 10th, 2020
All else constant, a cartel agreement will become more difficult to enforce as the number of firms competing the market increases and the members of the cartel produce a differentiated product. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
In the case of a linear demand function, the marginal revenue function is twice as steep as the demand function. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Increases in autonomous spending have an expansionary effect and make ________ levels of real income consistent with a given interest rate. A) lower B) higher C) constant D) none of the above. ANSWER B
Date: September 10th, 2020
To maximize joint profits, the members of a cartel have to determine the level of industry output by setting marginal revenue qual to the cartel’s joint marginal costs of production. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
There is considerable evidence to support the assertion that legislated input combinations have reduced the costs of production in affected industries. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
In a closed economy the marginal propensity to consume is 0.60 and the marginal propensity to invest is 0.10. What is the size of the multiplier? A) 1.33 B) 2.33 C) 3.33 D) 0.70 ANSWER C
Date: September 10th, 2020
