In Sewei's lawnmowing business, in order to produce each mowed lawn, Sewei must hire exactly one unit of capital (a lawnmower) and exactly one unit of labor. Describe the elasticity of substitution between labor and capital
What will be an ideal response?
Since substitution is not possible here, there is zero elasticity of substitution.
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Lowering the discount rate has the effect of ________.
A. forcing commercial banks to call in outstanding loans from their best customers B. turning required reserves into excess reserves C. turning excess reserves into required reserves D. making it less expensive for commercial banks to borrow from central banks
According to the table, the price of Big Macs converted to U.S. dollars varies widely around the world. This shows that Big Macs do NOT follow the
A) law of opportunity cost. B) law of one price. C) law of demand. D) law of exchange rate parity.
If transactions costs are high, the economic pie may not be maximized
Indicate whether the statement is true or false
The traditional typewriter market has collapsed over the past few decades because people prefer personal computers. Yet, some new typewriters continue to be produced and sold at historically low prices
How would you explain the decline in typewriter prices? A) Typewriter producers have become less greedy. B) The demand curve for typewriters has shifted to the left. C) The supply curve for typewriters has shifted to the right. D) The supply curve for typewriters has shifted to the left.