Consider a two-good production economy in which both goods are produced with fixed proportions production functions. Then, some efficient allocations will exhibit unemployment of some factor providing
a. the firms use the inputs in different proportions.
b. the firms exhibit diminishing returns to scale.
c. the firms exhibit increasing returns to scale.
d. production can never be efficient if there are unemployed inputs.
a
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When policy makers attempt to focus on internal balance, they
A) must be talking only about domestic goals. B) must be talking about domestic and international goals. C) must consider both domestic policy and trade. D) Any of the above might be considered internal balance.
Make use of a graph of the foreign exchange market to show how the Central Bank of Mexico can use an unsterilized intervention to increase the value of its currency, the peso, in terms of the dollar
What will be an ideal response?
Which of the following is a barrier to entry to an industry?
(a) Start up costs. (b) A patent. (c) A government awarded licence. (d) All of the above.
In a monopolistically competitive market, a firm should advertise to the point at which
A. it is selling the most units it can possibly sell. B. the additional revenue generated by one more dollar of advertising just equals the extra dollar cost of advertising. C. it can raise price to the highest level possible. D. the extra revenue from an additional dollar spent on advertising just equals the marginal cost of producing one more unit of the good.