Suppose the price of capital and labor remain constant but that the average educational level of workers has increased and therefore, productivity of labor increases. This would lead a firm
A) to adopt a more capital-intensive production technology.
B) to keep its output and production technology unchanged, but to use fewer units of labor.
C) to adopt a more labor-intensive technology.
D) to use only labor to produce the product.
C
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The above figure shows Sam's budget line and one of his indifference curves. What combination of coffee and gasoline will Sam select?
A) combination a because that contains all the gasoline he needs and still has some coffee B) combination c because that contains all the coffee he needs and some gasoline C) combination b because it is on his budget line and on the highest attainable indifference curve D) none of the above
If the first four units of a good consumed have marginal utilities of 8, 4, 2, and 1, respectively, this trend is an indication of the:
a. law of consumer equilibrium. b. law of diminishing marginal utility. c. law of diminishing consumer surplus. d. law of supply.
The production possibility curve is bowed outward from the origin because of:
a. the law of increasing opportunity costs. b. the finite nature of the resource base. c. inefficiency. d. improper output mix. e. unemployment.
Sticky prices can result from all of the following except:
a. market structure. b. long-term contracts between buyers and sellers. c. setting prices on the basis of costs when wages are sticky. d. expansionary monetary policy.