Which of the following statements about production isoquants is correct?
A) They show all the combinations of two inputs that result in the same level of output.
B) They are usually concave to the origin.
C) They show all the combinations of two inputs that yield the same cost of production.
D) They represent lower levels of output the farther they are from the origin.
A
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According to Pigovian analysis, when is a tax necessary to improve the market's economic efficiency?
a. When high transactions costs prevent private bargaining. b. When the social marginal cost of production exceeds the private marginal cost. c. When consumption of the good creates external benefits for others. d. When at the competitive equilibrium, the social marginal benefit of the good equals its social marginal cost.
Refer to the above figure. The market supply and demand curves in a perfectly competitive market intersect at $4. Which of the graphs represent the situation for an individual firm?
A) Panel A B) Panel B C) Panel C D) Panel D
In regards to the uncommon length of the Great Depression, both Schumpeter and Higgs contend that:
a. private investment remained depressed in part due to the political climate created by the New Deal. b. Social Security and the freedoms granted to labor, along with a progressive tax structure promoted growth in private investment. c. the undistributed profits tax of 1936 encouraged businesses to undertake long-term investments. d. the New Deal rhetoric from President Roosevelt, offered a pro-business slant that offended labor groups.
Assume that an economy's real GDP multiplier is 4 . If this economy is in equilibrium at $2,000 billion, then which one of the following actions will bring it to a full employment equilibrium of $1,500 billion?
a. $500 billion spending cut. b. $500 billion spending increase. c. $125 billion spending cut. d. $125 billion spending increase. e. $2,000 billion spending cut.