In the following graph, the price of capital is $100 per unit. What is the marginal rate of technical substitution at point C?
A. 0.14
B. 4
C. 0.4
D. 1.4
E. none of the above
Answer: E
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Which of the following is NOT a reason the Fed changes the rate of growth of the money supply?
A) to influence the amount of consumption B) to influence the amount of investment C) to shift the demand for money curve D) to influence aggregate demand
Economists generally favor the use of tradable emission allowances to reduce pollution. However, the use of these allowances has been criticized by some environmentalists. Which of the following describes this criticism?
A) Some environmentalists believe that Pigovian taxes are a more efficient way to reduce pollution. B) Some environmentalists oppose allowances on legal grounds; they believe the use of allowances is unconstitutional. C) Some environmentalists believe that the price of allowances is often too high for consumers to afford. D) Some environmentalists believe the allowances give firms a license to pollute.
In the above figure, what happens to the firm's optimal level of output if the price it receives for its product decreases from P4 to P3?
A) Output stays the same. B) Output decreases. C) Output increases. D) There is not enough information provided to know what happens to output.
Your willingness to pay more to fly to your vacation spot on the coast rather than incur the cost of driving there indicates that:
a. you place a high value on your time. b. you place a low value on your time. c. you believe time has zero value. d. you believe time is valued at your wage level.