An input is indivisible if:
A. it cannot be increased to produce a larger quantity of output.
B. it cannot be used as a substitute for other inputs in the production process.
C. it is sufficiently inexpensive to purchase that firms will want to buy as much as they can.
D. it cannot be scaled down to produce a smaller quantity of output.
Answer: D
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If the demand curve fails to capture all of the benefits of consumption, then the:
A. the equilibrium price will be inefficiently high. B. the equilibrium price will be inefficiently low. C. equilibrium price will be efficient but the equilibrium quantity will be inefficiently large. D. government needs to impose regulations that require more consumption.
What is meant by the term "rate of interest"? If the nominal rate of interest in an economy is 6%, and the rate of inflation in the economy is 4%, what is the real rate of interest in the economy?
What will be an ideal response?
A firm's demand for labor is known as a "derived demand" because
a. the firm gains utility from hiring more labor. b. the amount of labor hired depends upon how much output the firm can sell. c. the wage rate paid to workers is derived from the market for labor. d. it is derived from the demand for capital.
In contrast to the need for legal enforcement under a system of direct controls, a taxes approach
a. is subject to greater uncertainty of payment of fees. b. makes taxes automatic and certain. c. speeds the prosecution and conviction process. d. does not actually reduce pollution, merely the cost of monitoring it.