A firm that is trying to produce a given level of output Q0 at the lowest possible cost will
A. select the input combination at which an isocost line is above the Q0 isoquant.
B. select the input combination at which an isocost line is below the Q0 isoquant.
C. select the input combination at which an isocost line is tangent to the Q0 isoquant.
D. choose to produce at a level where variable costs are less than or equal to fixed costs.
Answer: C
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A Business Wire report shows that sales at Target stores increased in 2012 compared to the previous year. (Source: Business Wire, August 30, 2012 ) Incomes grew slightly between 2011 and 2012
Using that fact and the sales data given above means that Target definitely is selling goods and services that A) are normal. B) are inferior. C) have an income elasticity of zero. D) have an income elasticity of 1.
When each firm is liable for taxes on total sales but can claim the taxes already paid by suppliers as a credit against liability we are using the
A. reserve method. B. chain method. C. invoice method. D. VAT method.
Comparisons of the link between the growth of the money supply and inflation indicate that
a. countries with high rates of monetary growth also experience high inflation. b. countries with high rates of monetary growth experience low inflation. c. monetary growth rates and inflation are unrelated. d. inflation is primarily the result of restrictive monetary policy.
Assume that the marginal propensity to save is 0.2. If we consider the multiplier effect and hold all the other factors, a $200 billion income tax cut can increase the real GDP totally in the long run by
a. $40 billion b. $250 billion c. $800 billion d. $1 Trillion