If the marginal product of labor is 100 and the price of labor is 10, while the marginal product of capital is 200 and the price of capital is $30, then what should the firm?
a. The firm should use relatively more capital
b. The firm should use relatively more labor
c. The firm should not make any changes – they are currently efficient
d. Using the Equimarginal Criterion, we can't determine the firm's efficiency level
e. Both c and d
b
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The lag before the full effects of monetary policy on inflation are felt is longer than the lag before its effects on real output and unemployment are felt
a. True b. False Indicate whether the statement is true or false
Assume a company is at a point in production where marginal product is above average product. Which of the following must be true?
A. Marginal product must be rising. B. Diminishing marginal product must not have set in yet. C. Average product must be rising. D. All of these are true.
Which of the following policies should be used to close an inflationary GDP gap?
A. Increases in government spending and increases in transfer payments B. Tax increases C. Increases in government spending D. Increases in transfer payments
The following figure shows the domestic demand (Dd) and domestic supply (Sd) curves of mopeds in a country before an import quota is imposed by the government. After the imposition of the quota, the maximum import quantity is QQ.
After the quota is imposed, the domestic consumers
A. lose $22.5 million. B. gain $52.5 million. C. lose $82.5 million. D. lose $7.5 million.