Answer the following questions true (T) or false (F)
1. The slope of the production possibilities curve is called the marginal rate of technical substitution.
2. The slope of an isoquant is called the marginal rate of product transformation.
3. The shape of the long run average cost curve is typically U-shaped in practice.
1. FALSE
2. TRUE
3. FALSE
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Which of the following variables is used to measure economic growth?
A) nominal GDP B) nominal GDP per capita C) real GDP D) real GDP per capita
The ceteris paribus assumption is important in economics because
A) all empirical data are equal. B) it would be impossible to relate the changes in one variable to another variable without holding other variables constant. C) economic data move very slowly over time and so they can always be considered constant. D) models are always complex and require as many variables as possible.
One reason earnings tend to fall before retirement age is that
A. people are retiring earlier. B. firms discriminate against older workers. C. people tend to reduce the number of hours they work after age 50. D. the experience of people is no longer valuable after they are 50 or 55.
Explain the relationship between price, short-run marginal cost, short-run average cost and long-run average cost in the final long-run competitive equilibrium condition. What are economic profits in this long-run equilibrium condition?
What will be an ideal response?