The numerical value of a price elasticity represents the percentage amount by which the quantity demanded changes when the price
a. increases by 1 unit
b. changes by 1 percent
c. is in equilibrium
d. is fixed in the market
e. falls by 1 dollar
B
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Suppose that the production function for the economy is Y = AK0.2L0.8. If the capital stock = 40,000, the quantity of labor = 10,000, and the efficiency index = 1, the marginal product of capital is
A) $0.066. B) $0.20. C) $1.05. D) $1.58.
Farmer Fred could grow wheat and barley. He could grow 75 bushels of wheat or 125 bushels of barley using the same resources on an acre of his land. The price of wheat is $2.00 per bushel and the price of barley $ 0.80 . Show the benefits to Fred from specialization. What should he specialize in?
When leisure is a normal good, the income effect from a decrease in wages is evident in
a. a desire to consume more leisure. b. a desire to consume less leisure. c. an upward-sloping labor-supply curve. d. a shift in labor demand.
If a firm has a fixed cost of $200,000, and a variable cost of $130,000 at an output of one, how much is marginal cost at an output of one?
A. $70,000 B. $130,000 C. $200,000 D. $270,000