Refer to Figure 6.3. Suppose the price of pizza is $9.75. Then consumer surplus is:

Suppose the economy has no income taxes or imports. How is the size of the expenditure multiplier related to the marginal propensity to consume? What is the multiplier if the MPC equals 0.25? If the MPC equals 0.50? If the MPC equals 0.90?

What will be an ideal response?

In the above figure, by increasing its output from Q2 to Q3, the firm

A) reduces its marginal revenue. B) increases its marginal revenue. C) decreases its profit. D) increases its profit.