If the economy is already producing at its potential, _____
a. the spending multiplier equals 1/(1 - MPC) in the long run
b. the spending multiplier is less than 1/(1 - MPC) in the long run
c. the spending multiplier is more than 1/(1 - MPC) in the long run
d. the spending multiplier equals zero in the long run
e. the aggregate demand curve is horizontal
d
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After a $3 per-unit tax on seeing movies in theaters is imposed, attendance falls from 4,000 a week to 3,000 a week. The revenue from the tax is
A) less than $9,000 a week. B) $9,000 a week. C) between $9,000 a week and $12,000 a week. D) some amount that cannot be calculated without more information.
Refer to Table 14-3. What is the Nash equilibrium in this game?
A) In the Nash equilibrium both Saudi Arabia and Nigeria produce a low output and earn a profit of $100 million and $20 million respectively. B) In the Nash equilibrium Saudi Arabia produces a low output and earns a profit of $80 million and Nigeria produces a high output and earns a profit of $30 million. C) In the Nash equilibrium both Saudi Arabia and Nigeria produce a high output and earn a profit of $60 million and $20 million respectively. D) There is no Nash equilibrium.