If on a given product indifference curve, a firm is using an insufficient (nonoptimal) amount of one of its inputs,
A. output will be below optimal.
B. the MRP of the input will be below its price.
C. costs will not be minimal.
D. relative input prices need to change.
Answer: C
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Figure 1-2
Identify the slope of the two curves A and B in Figure 1-2.
A. A—zero, B—one. B. A—one, B—zero. C. A—one, B—different at different points. D. A—different at different points, B—zero.
In recent economic history, the U.S. federal budget was in surplus from
A) 2001 through 2005. B) 1998 through 2001. C) 1990 through 1997. D) 1980 through 1989.
A larger interest rate spread in 2003-2006 is one of the factors that led to the recession of 2007
a. True b. False Indicate whether the statement is true or false
Lower transaction costs are a benefit of fixed exchange rates. Therefore, relative prices in two trading nations linked by fixed exchange rates should:
A) experience more price divergence. B) experience more price convergence. C) have less arbitrage and more speculation. D) have lower costs of production.