The Leontief production function implies:
A. L-shaped isoquants.
B. convex-shaped isoquants.
C. straight-line isoquants.
D. A positive MRTS.
Answer: A
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If the demand for corn is elastic, then:
a. there are not many substitutes for the consumption of corn. b. the price elasticity of demand for corn is less than -1. c. a decrease in price will reduce total revenue for corn producers. d. an increase in price will increase total revenue for corn producers. e. consumers will continue buying the same quantity even if price increases.
The effect time lag is the time period that elapses
A. between when an economic problem manifests itself and it is officially acknowledged. B. between the recognition of an economic problem and implementing policies to solve it. C. between implementing policies to solve an economic problem and when the results of that policy can be measured. D. between the beginning of the budgetary process and the final budget resolution.
The potential money multiplier gives us
A. the growth in real national income when the money supply increases. B. the growth in the money supply when income increases. C. the maximum potential change in the money supply due to a change in income. D. the maximum potential change in the money supply due to a change in reserves.
Dillon is undecided about whether to eat at a restaurant or to order pizza at home. He then obtains a coupon for 10 percent off at the restaurant and decides to go there to eat. This is an example of
A) someone using criteria other than price to make a consumption decision. B) a lower price leading a consumer to substitute more of the less expensive good for the relatively more expensive good. C) a lower price leading a consumer to buy more of a good because of the income effect. D) a consumer making a decision irrationally.