Consider a hypothetical closed economy in which households spend $0.75 of each additional dollar they earn to save the remaining $0.25. The marginal propensity to consume (MPC) for the economy is , and the spending multiplier for the economy is .
Suppose the government in this economy decides to increase government purchases by $250 billion. The increase in government purchases will lead to an increase in income, generating an initial change in consumption equal to _. This increases income yet again, causing a second change in consumption equal to . The total change in demand resulting from the initial change in government spending is .

Solomon chemical company makes three products, b7, k6, and x9, which are joint products from the same materials. in a standard batch of 320,000 pounds of raw materials, the company generates 70,000 pounds of b7, 150,000 pounds of k6, and 100,000 pounds of x9. a standard batch costs $3,840,000 to produce. the sales prices per pound are $10, $14, and $20 for b7, k6, and x9, respectively. (a) allocate the joint product cost among the three final products using weight as the allocation base. (b) allocate the joint product cost among the three final products using market value as the allocation base. (c) allocate the joint product cost among the three final products using weight as the allocation base.