If the marginal propensity to consume (MPC) is 0.8 and there is a desire to increase real GDP by $500 billion, then
A) an increase in autonomous real consumption spending of $500 billion will generate this change.
B) a decrease in autonomous real saving of $500 billion will generate this change.
C) an increase in planned real investment spending of $200 billion will generate this change.
D) an increase in real autonomous spending of $100 billion will generate this change.
D
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From a social viewpoint, when price = marginal cost:
a. the economy as a whole would be better off if more was produced. b. the economy as a whole would be better off if less was produced. c. firms would be better off by producing less. d. the economic efficiency would be attained as a whole. e. the consumers would be better by consuming less.
Use the following graph for a perfectly competitive firm to answer the next question.
At its short-run equilibrium point, the firm's
A. marginal revenue equals its average variable cost. B. marginal cost equals its average fixed cost. C. marginal revenue equals its average total cost. D. marginal cost equals its average variable cost.