The slope of the isoquant is
A. negative.
B. the marginal rate of technical substitution.
C. -MPL/MPK.
D. All of the above are correct.
Answer: D
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The various combinations of goods that can be produced by an economy using its available resources and technology efficiently is called
a. limits to scarcity b. opportunity cost c. limited production d. capital accumulation e. production possibilities
Scientific evidence suggests that consumption of foods rich in fiber lowers cholesterol. As a result, the demand for bran increases at every price by 5,000 bushels and the supply curve for bran is perfectly price elastic. The quantity of bran consumed will
a. not change. b. change unless the demand curve is perfectly inelastic. c. rise by exactly 5,000 bushels. d. not rise by exactly 5,000 bushels unless the demand curve is perfectly inelastic.
When a law is passed that requires businesses to obtain permission from government officials in order to enter a market, this is an example of
a. price-control legislation. b. a barrier to entry c. antitrust legislation. d. the invisible hand principle.
Briefly discuss the similarities and differences of the effects of an import quota and a tariff on domestic price, quantities, and well-being, for a small country producing and selling a product in a competitive world market. (Assume a tariff level that would restrict imports just as much as the quota would.)
What will be an ideal response?