Refer to the following figure. The price of capital is $50 per unit:
How many units of labor should the firm use in order to produce 400 units of output at the least cost?
A. 100
B. 105
C. 110
D. 115
Answer: A
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The production possibilities frontier model shows that
A) if all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good. B) a market economy is more efficient in producing goods and services than is a centrally planned economy. C) economic growth can only be achieved by free market economies. D) if consumers decide to buy more of a product, its price will increase.
Which of the following is not a basis for trade between two nations?
a. different skill levels of the labor forces b. one nation's absolute advantage c. a difference in tastes between countries d. economies of scale e. different capital stocks
The level of total spending is the immediate determinant of the:
A. ratio of private to public goods production. B. level of real output and employment. C. inflation rate. D. size of the labor force.
If the actual reserve/deposit ratio equals 8% and the desired reserve/deposit ratio for this bank is 10%, the bank should:
A. send the extra reserves to the central bank. B. stop making loans. C. make more loans in order to earn interest. D. do nothing because this is a profitable situation.