In the case of a short-run production function:
A) all of the inputs are variable.
B) the amount of labor employed is held constant.
C) at least one of the inputs is fixed.
D) all of the inputs are fixed.
C
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Incremental cost assessment involves
a. valuing TSC at a single level of abatement b. subtracting baseline TSC prior to undertaking policy from post-policy TSC c. summing baseline TSC and post-policy TSC d. finding the ratio of TSC to MSC at a given abatement level
When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Which of the following statements is true of economic reasoning?
A) Economic reasoning hampers optimal decision making. B) Economic reasoning can only be used with normative choices. C) Economic reasoning implies that leisure time is free and costless. D) Economic reasoning helps people make the best use of scarce resources.
The figure above shows the marginal revenue, marginal cost, and demand curves for an airline offering daily flights between Los Angeles and Toronto. If the airline is regulated using a marginal cost pricing rule total surplus will be ________
A) $100,000 B) $60,000 C) $80,000 D) $20,000