Suppose an economist found that total revenues increase for the bus system when fares were raised, the conclusion is that the price elasticity demand for subway services over the range of fare increase is inelastic
a. True
b. False
Indicate whether the statement is true or false
True
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Refer to the above figure. If real Gross Domestic Product (GDP) is $2 trillion, then
A) the level of total planned expenditures is less than real GDP. B) the level of total planned expenditures is greater than real GDP. C) the level of total planned expenditures equals real GDP. D) the level of total planned expenditures equals zero.
The way one firm relates to another in the supply chain is referred to as being
A) upstream or downstream. B) latitudinal or longitudinal. C) left or right. D) competitor or conspirator.
Convexity of indifference curves implies that consumers are willing to
A) give up more "y" to get an extra "x" the more "x" they have. B) give up more "y" to get an extra "x" the less "x" they have. C) settle for less of both "x" and "y". D) acquire more "x" only if they do not have to give up any "y".
Suppose a technology is described by the production function 
a. For a price taking producer who faces output price p and wage w, derive the first order condition and interpret it.
b. Without knowing more about the function f, is the condition you derived in (a) either necessary or sufficient for deriving the profit maximizing production plan? Explain.
c. Suppose 
. Derive the first order condition you illustrated in (a) and solve for 
.
d. For what values of 
is this first order condition necessary and sufficient for deriving a profit maximizing production plan? Explain.
What will be an ideal response?