If a market is allocatively efficient,
a. firms are minimizing marginal cost
b. firms are minimizing total cost
c. consumers are minimizing expenditures
d. it must be impossible to increase total utility
e. it must be impossible to decrease output
D
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Suppose the income elasticity of demand is -0.5 for good X. This implies that a 5% decrease in income will cause the quantity demanded of good X to
a. increase by 2.5%, and X is an inferior good. b. decrease by 2.5% and X is a normal good. c. increase by 10% and X is an inferior good. d. decrease by 10% and X is a normal good.
A decrease in the interest rate could have been caused by the money-demand curve shifting
a) leftward because the price level fall. b) leftward because the price level rose. c) rightward because the price level fell. d) rightward because the price level rose.
Suppose you solve the profit maximization problem for a single-input, price-taking producer whose technology is given by src="https://sciemce.com/media/3/ppg__cognero__Chapter_11_One_Input_and_One_Output_A_Short_Run_Producer_Model__media__59179cfd-ca3e-489f-aabb-5a92da40ce1d.PNG" style="vertical-align: -13px;" width="79px" height="38px" align="absmiddle" /> Might 
The labor demand function is 
a. Suppose 
in fact be the correct labor demand function? Explain.
b. Suppose 
Might 
in fact be the correct labor demand function? Explain.
c. Intuitively explain how (b) might arise from the profit maximization problem.
What will be an ideal response?
Is it possible for a firm to have an absolute advantage in producing something without having a comparative advantage? Why or why not?
What will be an ideal response?