If the marginal propensity to save is 0.4 and disposable income increases from $1,000 to $1,500, saving will increase A) $300. B) $200. C) $100. D) $400. ANSWER B
Date: September 2nd, 2020
A supply schedule is a table that reports: A) the expected excess supply in the market at different prices. B) the profits earned by producers at different levels of production. C) the different quantities of a good that producers are willing to sell at different prices. D) the different quantities of a good that producers […]
Date: September 2nd, 2020
What is cost-benefit analysis? What are the steps involved in using cost-benefit analysis to make the optimal choice? What will be an ideal response? ANSWER Cost-benefit analysis is a calculation that adds up the costs and benefits of a particular choice using a common unit of measurement. It involves the conversion of all costs […]
Date: September 2nd, 2020
The idea that “supply creates its own demand” is attributed to which of the following economists? A) Adam Smith B) David Ricardo C) A. C. Pigou D) J. B. Say ANSWER D
Date: September 2nd, 2020
The most important function of money is when money is used as a A) medium of exchange. B) unit of accounting. C) standard of deferred payment. D) store of value. ANSWER A
Date: September 2nd, 2020
Which of the following statements is true of the U.S. economy in the last 200 years? A) The growth rate of GDP has been more than 10% per year. B) The GDP per capita has decreased. C) The GDP per capita has increased. D) There has been no contraction in the economy. ANSWER C
Date: September 2nd, 2020
The ________ plots the relationship between prices and the quantity producers are willing to sell. A) isoquant B) indifference curve C) demand curve D) supply curve ANSWER D
Date: September 2nd, 2020
In economics, money is A) a financial instrument backed by some precious metal such as gold or silver. B) whatever the government defines it to be. C) anything that people generally accept in exchange for goods and services. D) another term for income. ANSWER C
Date: September 2nd, 2020
If consumption is $750 when real disposable income is $1,000, the average propensity to consume is A) 0.50. B) 0.25. C) 0.80. D) 0.75. ANSWER D
Date: September 2nd, 2020
According to the text, an open economy is likely to have all the following EXCEPT A) relatively more rapid spread of ideas. B) relatively more trade barriers. C) high technological progress. D) high economic growth. ANSWER B
Date: September 2nd, 2020
