As the quantity of labor increases, the marginal product of capital
A) is constant.
B) increases.
C) decreases.
D) may either increase or decrease.
B
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Which of the following statements is true?
A) Savings of households are independent of tax rates. B) Higher interest rates typically encourage more savings. C) An increase in the consumption of households increases savings of the households. D) Households that expect an increase in future earnings are likely to save more.
Suppose bad weather decreases the wheat harvest by 12 percent. If the price elasticity of demand for wheat is 0.6, how would the crop failure affect the price of wheat? Would the crop failure benefit or harm wheat farmers?
What will be an ideal response?
The above figure shows Bobby's indifference map for soda and juice. B1 indicates his original budget line. B2 indicates his budget line resulting from an increase in the price of soda. From the graph, one can conclude that
A) Bobby views soda as an inferior good. B) Bobby's demand for soda is perfectly inelastic. C) Bobby views soda as a normal good. D) the income elasticity of demand for soda is 1.
A person starting to drive more recklessly after signing a contract with an automobile insurance company is an example of
A) adverse selection. B) moral hazard. C) signaling. D) screening.