The Lucas supply function, real business cycle theory, and the new Keynesian model all assume rational expectations.
Answer the following statement true (T) or false (F)
True
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If a firm expects that the price of its product will be higher in the future than it is today, then
A) the firm has an incentive to decrease supply now and increase supply in the future. B) the firm has an incentive to decrease quantity supplied now and increase quantity supplied in the future. C) the firm has an incentive to increase supply now and decrease supply in the future. D) the firm will go out of business.
Refer to Scenario 7.1. The total cost to produce 50 cookies is
A) $20 B) $25 C) $50 D) $60 E) indeterminate
The marginal product of any input into the production process:
A. is the increase in output that is generated by an additional unit of input. B. is the decrease in input that is generated by an additional unit of output. C. is the constant ratio of inputs to outputs. D. None of these is true.
The following is a hypothetical short?run production function: Hours of Total Marginal Labor Output Product 0 ___ ___ 1 100 100 2 ___ 80 3 240 ___ Refer to Scenario 1. What is the total output when 2 hours of labor are employed?
A. 180 B. 170 C. 150 D. 140