Suppose the production function for a certain device is q = L + K. If neutral technical change has occurred, which of the following could be the new production function?
A) q = L + 5K
B) q = 5 ? (L + K)
C) q = 5L + K
D) All of the above are possible.
B
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Macroeconomics is best defined by which of the following statements?
A) Macroeconomics is the study of how firms attempt to maximize profits. B) Macroeconomics is the study of the behavior of the economy as a whole. C) Macroeconomics is the study of individual households. D) Macroeconomics is the study of how the prices of individual goods are determined.
According to Keynes, the most important determinant of an individual's real saving is
A) interest rates. B) the foreign exchange rate. C) the individual's real disposable income. D) the level of investment.
Sally is an average shopper, with average income. When she is in the store she buys a few items which cost more than $20, several items which cost between $5 and $20, and many items which cost less than $1 . The price elasticity of Sally's demand for these goods most likely ____
a. increases as the price decreases b. decreases as the price decreases c. increases as the price increases d. decreases as the price increases e. remains constant over all price ranges
Which statement is false?
A. President Eisenhower presided over three recessions. B. At the close of the 20th century the unemployment rate was below 5 percent. C. The United States' longest economic expansion was for six years during the Reagan Administration. D. None of the choices are false.