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Why does equilibrium output increase as the marginal
propensity to consume increases?
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- On a microeconomic demand curve, a decrease in price causes an increase in quantity demanded because the product in question is now relatively less expensive thansubstituteproducts.Explainwhyaggregatedemand does not increase for the same reason in response to a decrease in the aggregate price level. In other words, whatcausestotalspendingtoincreaseifitisnotbecause goods are now cheaper?What is the word for a particular combination of goods and services that aperson could choose to consume?FIND CONSUMPTION?????
- What are the determinants for an individual demand? Receive with the help of indifference curves and the budget outline the optimal consumption plan. How do you transfer the optimal consumption plan into an individual demand function?Discuss how equilibrium prices and quantities changed.Consider an economy where the only consumption good is ice cream. Firms in this economy must: a. hire all workers and rent all machines available b. choose how many workers to hire and ice cream machines to rent c. choose how many workers to hire and rent all machines available d. hire all workers and choose how many machines to rent e. None of these answers are correct.
- What is an example of a change in equilibrium? Explain the change and provide a graphExplain the economic reason for which consumption decisions are graphically represented as a straight line and production decisions are graphically represented as a curve.Assume that Country A has an efficiency in output market. However, efficiency in the use of input production is not. Using graph(s), explain how the economy of Country A will adjust to achieve a desired equilibrium. What (is) are the condition(s) to achieve this equilibrium?
