What is an isoquant? What is the slope of an isoquant?
What will be an ideal response?
An isoquant is a curve that shows all the combinations of two inputs, such as capital and labor, that will produce the same level of output. Its slope is the rate at which a firm can substitute one input for the other while keeping output constant, or the marginal rate of technical substitution (MRTS).
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When oligopolies seek to operate as a single-price monopoly, the firms produce at the point where:
A) P = MC. B) MR = MC. C) P < ATC. D) P = MR. E) MC = ATC.
One suggested method of reducing excessive risk-taking by SIFIs is to require them to hold ________ capital when credit is expanding rapidly and ________ capital when credit is contracting
A) less; more B) more; no C) more; less D) less; no
Which of the following must occur as a result of ceilings on apartment rents that are set below market clearing rental rates?
A) Property owners respond to the ceilings by increasing maintenance and repairs. B) Property owners respond to the ceilings by constructing new apartment buildings. C) There is a decrease in the quantity of apartments that prospective tenants wish to rent. D) There is a decrease in the quantity of apartments that property owners offer for rent.
If unemployment is below the NAIRU, inflation generally:
A. accelerates. B. decelerates. C. becomes negative. D. gets caught in a downward spiral.