Private solutions may not be possible due to the costs of negotiating and enforcing these solutions. Such costs are called
a. transaction costs.
b. corrective costs.
c. input costs.
d. private costs.
a
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Suppose the production of VCRs can be represented by the following production function: q = L0.4 K0.4. The firm currently produces units. If all inputs doubled, the new level of output will equal
A) 20.4 q1. B) 20.8 q1. C) 0.8 q1. D) 1.6 q1.
A likely example of complementary goods for most people would be
a. canoes and paddles. b. snow mobiles and sofas. c. coffee and tea. d. tennis balls and basketballs.
The MPC can be used to predict the effect of a tax increase.
Answer the following statement true (T) or false (F)
A demand curve is downward sloping because
A. as the price of the good decreases, the consumer finds that a lower indifference curve is attainable. B. as the price of the good decreases, the consumer finds that a higher indifference curve is attainable. C. consumers move downward along a budget line as the price of a good decreases. D. consumers move upward along a budget line as the price of a good decreases.