A production function begins at the origin because
A. when a firm divides tasks, they can get more output.
B. a firm with no employees will have no output.
C. a firm can always choose to have no employees.
D. it takes a certain number of employees to produce anything.
Answer: B
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The Road Runner Club contributes money to Senator Sly's reelection campaign fund, and Senator Sly helps pass legislation to add more jogging paths across the state. From this we can definitively conclude:
A. that political corruption has occurred. B. that logrolling has occurred. C. that a principal-agent problem has occurred. D. nothing; the Road Runner Club may have donated to Senator Sly because he already supported the jogging paths.
In his book Progress and Poverty, Henry George argued that:
poverty is associated with the personal characteristics of individuals and therefore cannot be remedied by government antipoverty programs. B. economic rent could be heavily taxed without impairing the supply of land or therefore the productive capacity of the economy. C. rents should not be taxed because rental income is the basic source of saving, which ultimately permits a high level of investment and economic growth. D. taxes on rents are undesirable because they have a severe disincentive effect on landlords.
Use the following table with data for a private (no government) closed economy to answer the next question. All figures are in billions of dollars.Domestic Output or Income (RGDP = DI)Consumption$540$540560555580570600585620600640615660630If planned investment is $25 billion, then aggregate expenditures at the income level of $560 billion will be
A. $565 billion. B. $585 billion. C. $580 billion. D. $595 billion.
The product life cycle theory predicts that comparative advantage shifts away from the country of origin if:
a. the product is introduced in many countries simultaneously. b. the product is highly demanded in international markets. c. the demand for the product drastically declines in the domestic market of the country where it was invented. d. other countries have lower manufacturing costs using the now-standardized technology. e. other countries develop highly skilled labor force to improve product quality.