The least costly way to produce any given level of output is indicated by
A. the isocost line corresponding to that level of output.
B. the point of tangency between an isocost line and the isoquant corresponding to that level of output.
C. the point of intersection between the isoquant corresponding to that level of output and the Y-axis.
D. the point of intersection between the isoquant corresponding to that level of output and the X-axis.
Answer: B
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When inflation is very low, how do workers and firms adjust their expectations of inflation?
A) They tend to ignore inflation. B) They are more aggressive in asking for wage and price increases. C) They rapidly adjust their expectations of inflation downward. D) They rapidly adjust their expectations of inflation upward.
Given the equations for C, I, G, and NX below, what is the equilibrium level of GDP?
C = 1,000 + 0.8Y I = 1,500 G =1,250 NX = 100 A) $3,080 B) $3,850 C) $6,930 D) $19,250
When competition is present, self-interested business decision makers have a strong incentive to
a. produce efficiently. b. ignore the wishes of customers who are also self-interested. c. adopt technological improvements slowly in order to avoid making wrong decisions d. maximize price in order to maximize profits.
If exports are $500, GDP is $8000, government purchases are $1200, imports are $700, and investment is $800, then consumption is $6200
a. True b. False Indicate whether the statement is true or false