Refer to the data. For Plan D marginal costs and marginal benefits are:
A. $72,000 and $64,000 respectively.
B. $28,000 and $12,000 respectively.
C. $24,000 and $18,000 respectively.
D. $16,000 and $28,000 respectively.
B. $28,000 and $12,000 respectively.
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Which scenario best explains the Keynesian transmission mechanism when the investment demand curve is vertical?
A) The interest rate falls, investment falls even more, the AD curve shifts rightward, but total expenditures do not change. B) The interest rate falls, investment rises, total expenditures rise, and the AD curve shifts rightward. C) The interest rate falls, investment falls instead of rising, and the AD curve ends up shifting leftward. D) The interest rate falls, but investment does not respond; there is no change in total expenditures and no shift in the AD curve.
Suppose that the labor cost-total cost ratio in industry A is 82 percent while in industry B it is 21 percent. Other things equal, labor demand will be:
A. more elastic in industry A than in B. B. relatively inelastic in both industries A and B. C. more elastic in industry B than in A. D. relatively elastic in both industries A and B.