What is the input-substitution effect?
What will be an ideal response?
The change in the quantity of labor demanded resulting from a change in the relative price of labor relative to the price of other inputs.
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Which of the following is a primary use for national income accounts?
A. To measure changes in the value of production and income in the economy B. To assess the economic efficiency of specific industries in the economy C. To determine whether there is a fair and equitable distribution of income in the economy D. To analyze the environmental cost of economic growth
Differentiate between a payoff matrix and a game tree
What will be an ideal response?
Refer to Figure 2-1. Along the production possibilities frontier, the most efficient point of production depicted is:
A. Point B B. Point C C. Point D D. All points on the production possibilities frontier are equally efficient.
Refer to Figure 8.1, which shows a family of average cost curves. Why does the vertical distance between Curve 1 and Curve 2 decrease as output increases from Q1 to Q2?
A. Because average variable cost first decreases, then increases as output increases from Q1 to Q2. B. Because average fixed cost decreases as output increases from Q1 to Q2. C. Because average total cost first decreases, then increases as output increases from Q1 to Q2. D. Because average variable cost increases faster than average fixed cost as output level approaches Q2.