Explain how a market demand curve is constructed
What will be an ideal response?
The market demand curve is the horizontal summation of the individual demand curves. A price is selected, and the quantities demanded of each person at that price are summed. Then another price is selected and the quantities demanded of each person at that price are summed. Continue doing this for other prices until the market demand curve is traced out.
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Refer to Figure 8A.2. An increase in the saving rate is represented by
A) a movement from e2 to e1. B) shifting from s1Y to s2Y. C) a movement from K1 to e1. D) shifting from s2Y to dK.
If the population growth rate is 2%, the incremental capital output ratio is 3, the saving ratio is 24% and the depreciation rate is 5%, the rate of growth of income per person is
(a) 1%. (b) 2%. (c) 3%. (d) 5%. (e) 8%.