What is the ceteris paribus condition?
What will be an ideal response?
The ceteris paribus condition is the requirement that when analyzing the relationship between two variables, such as price and quantity demanded, other variables must be held constant.
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If the government increases expenditure by $40 billion and increases tax revenues by $40 billion, what is the impact on aggregate demand? Explain your answer
What will be an ideal response?
The figure above illustrates the marginal private cost and the marginal social cost to the city of Seattle for each rock concert that is offered. At 10 concerts, the
A) marginal private cost equals the marginal external cost. B) marginal social cost equals $60,000. C) marginal private cost is more than $40,000. D) marginal external cost equals $60,000. E) marginal external cost equals $80,000.