Gamma has $30,000 of capital per worker, while Omega has $7,500 of capital per worker. In all other respects, the two countries are the same. According to the principle of diminishing returns to capital, an additional unit of capital will increase output ________ in Gamma compared to Omega, holding other factors constant.
A. less
B. not at all
C. more
D. by the same amount
Answer: A
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An industry in which its firms' cost structures do not vary with changes in production is referred to as a
A. price-taking industry. B. constant-cost industry. C. price-controlled industry. D. fixed-price industry.
To change the rate of growth of the money supply, the Fed can do all but which one of the following?
A) Shift the demand for money curve by changing the interest rate. B) Engage in open market operations. C) Change the discount rate. D) Change the required reserve ratio.
Suppose the demand for rental apartments decreased substantially. We would expect to observe
A) no change in rent and a sharp reduction in quantity supplied in the short run, and an even larger decrease in quantity supplied in the long run. B) a large decrease in quantity supplied in the short run, followed by a counter-reaction and an increase in quantity supplied in the long run. C) a small decrease in quantity supplied and significantly lower rents in the short run, and quantity supplied to decrease much more in the long run. D) a large decrease in quantity supplied in the short run and the long run, but much larger reductions in rent in the long run.
Suppose a firm is hiring 20 workers at a wage rate of $60. The average product of labor is 30, the last worker added 12 units of output, and total fixed cost is $3,600. What is average total cost?
A. $8 B. $1800 C. $2 D. $600 E. none of the above