A production function represents:
A. the relationship between the quantity of inputs and the quantity of outputs.
B. the relative values of the inputs and modes of production.
C. the relative costs of the inputs across various modes of production.
D. the relationship between the cost of the inputs and the revenue generated by the outputs.
A. the relationship between the quantity of inputs and the quantity of outputs.
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To analyze aggregate productivity, economists typically assume ________
A) that the hours each person works varies with the wage rate B) that all of the capital and labor in the economy are fully utilized C) that output can increase only if inputs have become more productive D) all of the above E) none of the above
What happens to the equilibrium price and quantity in the market for science fiction novels, a normal good, when income increases and a new technology is invented, making it easier to publish books.
a. Quantity and price both increase. b. Quantity and price both decrease. c. Quantity will increase and the price change is ambiguous. d. Price will decrease but the quantity change is ambiguous.
Backward linkages are the demands created by new supply capacities
Indicate whether the statement is true or false
A small country imports T-shirts. With free trade at a world price of $10, domestic production is 10 million T-shirts and domestic consumption is 42 million T-shirts. The country's government now decides to impose a quota to limit T-shirt imports to 20 million per year. With the import quota in place, the domestic price rises to $12 per T-shirt and domestic production rises to 15 million T-shirts per year. If the government auctions the quota licenses, calculate the revenue collected by the government.
A. $40 million B. $240 million C. $70 million D. $30 million