Suppose the production function for a certain device is q = L + K. If a labor-saving technical change has occurred, which of the following could be the new production function?
A) q = L + 5K
B) q = 5 ? (L + K)
C) q = 5L + K
D) All of the above are possible.
A
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What happens to a country's production possibility frontier if it experiences a natural disaster such as a hurricane or an earthquake? Explain
What will be an ideal response?
Which of the following statements regarding a competitive firm is correct?
a. Because demand is downward sloping, if a firm increases its level of output, the firm will have to charge a lower price to sell the additional output. b. If a firm raises its price, the firm may be able to increase its total revenue even though it will sell fewer units. c. By lowering its price below the market price, the firm will benefit from selling more units at the lower price than it could have sold by charging the market price. d. For all firms, average revenue equals the price of the good.
Which of the following will cause a leftward shift in the aggregate demand curve?
A. a reduction in government spending B. an increase in taxes C. a reduction in the money supply D. all of these
Which statement is false?
A. The problems of the inner city ghettos were just as bad 50 years ago as they are today. B. There was a huge outward migration of middle- and working-class blacks from the ghettos in the 1970s and early 1980s. C. About 2 out of 5 poor blacks live in areas of extreme poverty. D. None of these statements are false.