Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The marginal rate of transformation in moving from Point A to Point B is
A. -2/3.
B. -1.5.
C. -3.
D. -30.
Answer: B
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Suppose you came across the following headline in a story of a daily newspaper: "Automobile prices are so high right now that there must be a shortage. As a consequence not everyone who needs an automobile will be able to buy one"
Is this statement necessarily correct?
When isoquants get progressively further apart there is
a. increasing returns to scale b. decreasing returns to scale c. constant returns to scale
Suppose the economy is in long-run equilibrium and the government decreases its expenditures. Which of the following helps explain the logic of why the economy moves back to long-run equilibrium?
a. as people revise their price-level expectations upward, firms and workers strike bargains for higher nominal wages. b. as people revise their price-level expectations upward, firms and workers strike bargains for lower nominal wages. c. as people revise their price-level expectations downward, firms and workers strike bargains for higher nominal wages. d. as people revise their price-level expectations downward, firms and workers strike bargains for lower nominal wages.
"If the amount of product differentiation in a monopolistically competitive industry is very small, the outcome in that market will not be very different than if it were a perfectly competitive industry." Explain.
What will be an ideal response?