If quantity demanded is greater than quantity supplied, then
a. an excess supply exists
b. the market is in equilibrium
c. the price will rise
d. the supply curve must be vertical
e. there will be no tendency for the situation to change
C
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If the marginal propensity to consume (MPC) is 0.75, and if the goal is to increase real GDP by $400 million, then by how much would government spending have to change to generate this increase in real GDP?
a. $140 million. b. $100 million. c. $200 million. d. $400 million.
Martha routinely has her prescriptions filled at her local SVC pharmacy. Each time that Martha goes to pick up a prescription, there is some problem and Martha has to return to the pharmacy later to get the prescription. Martha finds these return trips very annoying and time-consuming, but continues to request that her doctor send her prescriptions to this pharmacy even though there are several
other options in her town. Which of the following is correct? a. Economists would say that Martha is behaving rationally. b. Martha's behavior appears to exhibit inertia. c. Martha's behavior is inconsistent over time. d. Martha gives too much weight to a small number of vivid observations.