Assume Autonomous Net Taxes Fall by $300; the MPC =

question 33

Multiple Choice

Assume autonomous net taxes fall by $300; the MPC = 2/3.Net exports,planned investment,taxes,and government purchases are autonomous and remain fixed.As a result,consumption will initially

• A)remain unchanged
• B)rise by $300
• C)fall by $300
• D)rise by $200
• E)fall by $200

Grasp the concept of producer's surplus and its relation to supply and demand.

Analyze the impact of price discounts and club memberships on consumers' welfare and surplus.

Understand the implications of quasilinear preferences on consumer surplus and compensating variations.

Interpret the effect of a price change on net consumer's surplus with special attention to demand functions and inverse demand functions.

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Definitions:

Mean

The arithmetic average of a set of numbers, calculated by dividing the sum of the values by the number of values.

Probability

A measure of the likelihood that an event will occur, expressed as a number between 0 and 1.

Standard Deviations

A measure of the amount of variation or dispersion of a set of values from the mean.

Z Score

A statistical measurement that describes a value's relationship to the mean of a group of values, expressed in standard deviations.