Suppose the short-run production function is q = L0.5. If the marginal cost of producing the tenth unit is $5, what is the wage per unit of labor?
A) $1
B) $0.5
C) $0.25
D) It cannot be determined without more information.
C
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The above figure shows the production possibility frontier for a country. Suppose the country is producing at point D. What would be the opportunity cost to move to point C?
A) 6 thousand bottles of wine B) 15 thousand bottles of wine C) 12 tons of rice D) Nothing, it is a free lunch. E) This movement is not possible without economic growth.
New technologies may reduce oligopoly power by
a. increasing the minimum efficient scale b. raising barriers to entry c. raising prices and lowering output d. reducing barriers to entry e. reducing the choices available to consumers in the market
An economy has a current inflation rate of 7%. If the central bank wants to reduce inflation to 4% and the sacrifice ratio is 2, then how much annual output must be sacrificed in the transition?
a. 10% b. 8% c. 6% d. None of the above is correct.
If Real GDP increases at an annual rate of 4 percent and velocity increases at a rate of 1 percent per year, then rules-based monetary policy advocates who wish to maintain a stable price level would set the annual money supply growth rate at
A) 1 B) 2 C) 3 D) 4 E) 6