Which of the following is FALSE?
A. A change in input prices shifts the isoquant map.
B. At the optimal input choice, the rate at which the firm can substitute labor for capital in production is equal to the rate at which the firm can substitute labor for capital in the market.
C. A change in cost shifts the isocost curve.
D. Convex isoquants mean that the marginal rate of technical substitution decreases as the firm substitutes labor for capital.
E. none of the above.
Answer: A
You might also like to view...
If the cross-price elasticity of demand between blueberries and yogurt is negative, then the two goods are:
A. normal goods. B. inferior goods. C. substitutes. D. complements.
Answer the following statement(s) true (T) or false (F)
1. Although a sales tax hurts both producers and consumers, their losses are fully offset by the benefits created by the tax revenues. 2. One effect of a tax is that output in the market which is taxed falls. 3. Even if total surplus is maximized, there is still a chance that there will be a deadweight loss. 4. When the Pareto criterion is used to choose between different policies, any recommendation requires unanimous agreement. 5. If the potential Pareto criterion rejects a policy change, then the efficiency criterion will reject it as well.
For many goods, the price elasticity of demand increases over time after a price hike because
A) consumer incomes tend to increase over time. B) inflation increases all prices and incomes over time. C) the ability to find good substitutes for the product whose price rose increases over time. D) All of the above answers are correct.
Using the data in the above table, which worker hired at Jefferson's Cleaners is the first to show diminishing marginal returns?
A) the second B) the third C) the fourth D) the fifth