The law of diminishing returns explains why:
A. Total cost eventually rises faster and faster
B. Total cost eventually falls
C. Total cost eventually rises more and more slowly
D. Total cost eventually reaches a maximum point
A. Total cost eventually rises faster and faster
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Consider a consumer with preferences for consumption of a composite good (C) and leisure (L) given by the following utility function:
U(C,L) = 2C1/2 + L Denote the consumer's wage rate by w and total time available for labor and leisure is normalized to one. The price of consumption is one. Denote the amount of labor supplied as N, so that N + L = 1. The consumer also earns non-labor income ("allowance") of 0. a. Write out the budget constraint determining feasible allocations of leisure and consumption. b. Compute the optimal bundle of leisure and optimal bundle of consumption. c. Derive the consumer's labor supply function: N*(w, ). d. Determine the effect of increasing non-labor income on the supply of labor (that is, compute the relevant partial derivative). e. How does non-labor income affect the consumption of the composite good, C? f. Compute the effects of an increase in wage on consumption and labor supply. Is leisure a normal good?
Inflation psychosis and wage-price spirals are two types of hyperinflation
a. True b. False Indicate whether the statement is true or false
Which of the following best describes total fixed cost?
a. Total fixed cost divided by the quantity of output produced. b. Total variable cost divided by the quantity of output produced. c. Total cost divided by the quantity of output produced. d. The change in total cost when one additional unit of output is produced. e. Costs that do not vary as output varies.
The sum of value added
A. Is one way to compute the GDP. B. Equals the sum of the value of intermediate goods. C. Measures the intangible quality of goods and services produced in the economy. D. Equals net domestic product.