If some resources used in the production of a good are only available in limited quantities, then the long run market supply curve will be perfectly elastic
a. True
b. False
Indicate whether the statement is true or false
False
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The level of saving in the United States has historically been low relative to the level of domestic investment. Based on this information, we would expect that
A) U.S. private saving is less than its public saving. B) U.S. capital inflows are negative. C) U.S. net foreign investment has been relatively high. D) U.S. net exports have been relatively low.
Suppose investment spending falls. To offset the change in output the Federal Reserve could
a. increase the money supply. This increase would also move the price level closer to its value before the decline in investment spending. b. increase the money supply. However, this increase would move the price level farther from its value before the decline in investment spending. c. decrease the money supply. This decrease would also move the price level closer to its value before the decline in investment spending. d. decrease the money supply. However, this increase would move the price level farther from its value before the decline in investment spending.
(Appendix) In the production function Q = 10L1/2K1/2 calculate the marginal product equations of both inputs.
What will be an ideal response?
Which of the following is true in a perfectly competitive market?
a. Buyers can discern sharp differences in products. b. Buyers can easily switch from one seller to another. c. Buyers tend to have strong brand loyalties. d. Buyers have a very strong influence on price.