If a firm is hiring variable resources D and F in perfectly competitive input markets, it will minimize the cost of producing any level of output by employing D and F in such amounts that:
A. the price of each input equals its MP.
B. MP D = MP F .
C. MP D /P D = MP F /P F .
D. MP D /P F = MP F /P D
Answer: C
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A main trading partner with the U.S. is:
A. South Africa. B. Mexico. C. Russia. D. Saudi Arabia.
If there is currently an inflationary gap, an increase in aggregate demand will make the inflationary gap smaller, but a decrease in aggregate demand would make the inflationary gap larger
a. True b. False Indicate whether the statement is true or false
Suppose that the opportunity cost of producing a rocking chair in Mexico is 50 basketballs and the opportunity cost of a rocking chair in Japan is 80 basketballs. Japan and Mexico can realize mutual gains if the terms of trade are
a. greater than 80 basketballs per rocking chair, and Japan produces rocking chairs b. between 50 and 80 basketballs per rocking chair, and Japan produces basketballs c. greater than 80 basketballs per rocking chair, and Mexico produces basketballs d. less than 50 basketballs per rocking chair, and Japan produces basketballs e. between 50 and 80 basketballs per rocking chair, and Japan produces rocking chairs
Which of the following about inflation is true?
a. Anticipated inflation is an increase in the price level that comes as a surprise, at least to most individuals. b. Unanticipated inflation is a change in the price level that is widely expected. c. Decision makers are generally able to anticipate slow steady rates of inflation with a fairly high degree of accuracy. d. Inflation will increase the prices of goods and services that households purchase but not the wage rates of workers.