The Data Below Is the Consumption Schedule in an Economy

question 64

Multiple Choice

The data below is the consumption schedule in an economy. All figures are in billions of dollars. Refer to the above table. If gross investment is $34 billion, net exports are zero, and there is a lump-sum tax of $30 billion at all levels of GDP, then the after-tax equilibrium level of GDP will be:

• A) $490 billion
• B) $540 billion
• C) $590 billion
• D) $640 billion

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Definitions:

Utility-Maximizing

A principle in economics whereby individuals seek to optimize their satisfaction or happiness through the consumption of goods and services.

Total Product Curve

A graphical representation showing how the quantity of output depends on the quantity of a variable input, holding all other inputs fixed.

Average Product

Calculating the efficiency of input by dividing the entire production by the volume of input.

Average Total Cost

The total cost of production divided by the quantity produced, also known as cost per unit.