A firm can use 50 workers and 10 machines, 70 workers and 9 machines, or 75 workers and 9 machines to produce 40 chairs. If each worker costs $20 and each machine is rented for $500, the economically efficient input combination is:
A. 75 workers and 9 machines.
B. 50 workers and 10 machines.
C. 120 workers and 19 machines.
D. 70 workers and 9 machines.
Answer: D
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In the short run, expansionary fiscal policy usually will
A) decrease the price level and decrease real GDP. B) increase the price level and increase real GDP. C) decrease the price level and increase real GDP. D) increase the price level and decrease real GDP.
Assume that a firm's marginal revenue curve intersects the rising portion of the marginal cost curve at 100 units of output. At this output level, a profit-maximizing firm's total cost is $1,000 . If the price of the product is $10 per unit, the firm will earn an economic profit of:
a. zero. b. $400. c. more than zero but less than $100. d. $100. e. more than $100.
Below, the graph on the left shows long-run average and marginal cost for a typical firm in a perfectly competitive industry. The graph on the right shows demand and long-run supply for an increasing-cost industry.
If this were a constant-cost industry, what would be the price when the industry gets to long-run competitive equilibrium?
A. between $35 and $20 B. $20 C. above $35 D. $35 E. below $20
Your roommate has the right to play her harmonica during the day. But you find the best time to study is during the day, and the harmonica playing makes it hard for you to concentrate. You tell your roommate that you will do her laundry every week if she does not play the harmonica during the day and she agrees to this. This is an example of
A. an injunction. B. liability rules. C. the Coase theorem. D. the drop-in-the-bucket problem.