Does this production function, q = 10L0.5K0.3, experience increasing, decreasing or constant returns to scale?
A) Decreasing because a 100% increase in inputs increases outputs by 80%.
B) Increasing because an 80% increase in inputs increases outputs by 100%.
C) Decreasing because 0.5 + 0.3 < 1.
D) A and C.
D
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Define the term price discrimination. What conditions must hold for a firm to be able to practice price discrimination? How are consumers affected by price discrimination?
What will be an ideal response?
The figure above shows the loanable funds market. The equilibrium real interest rate is ________, and the equilibrium quantity of loanable funds is ________
A) 4 percent; $1.5 trillion B) 4 percent; $2.5 trillion C) 6 percent; $2.0 trillion D) 8 percent; $1.5 trillion E) 0 percent; $3.5 trillion
Which of the following would be counted in U.S. GDP?
a. the purchase of an old house b. the purchase of a new textbook c. the purchase of a $1,000 government savings bond d. washing your car in the driveway e. the purchase of 50 shares of IBM stock
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD1 the result in the long run would be:
A. P4 and Y1. B. P4 and Y2. C. P5 and Y1. D. P5 and Y2.