A profit-maximizing firm will never hire that quantity of a factor of production for which that factor has an increasing marginal productivity because:
a. it would not be maximizing output.
b. it would not be maximizing the productivity of labor.
c. it would not be minimizing costs.
d. it would not be maximizing profits.
d
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The government heavily subsidizes the production of ethanol to encourage the purchase of ethanol over oil, a less environmentally friendly form of energy. Given that the supply elasticity of ethanol, ?, is estimated to be about 0
13, what would the elasticity of demand, ?, have to be for consumers to receive at least half of the subsidy, and therefore encourage ethanol consumption? A) ? must be less than . B) ? must be greater than . C) ? must be more inelastic than the elasticity of supply. D) Both A and C.
If demand is inelastic, the percentage change in price is greater than the resulting percentage change in quantity demanded
a. True b. False
Appreciation of the U.S. dollar can be caused by
A. A decrease in the demand for dollars. B. An increase in the supply of dollars. C. An increase in the demand for dollars. D. A decrease in the U.S. interest rate.
In which of the following periods was the relationship between the U.S. unemployment rate and U.S. inflation rate unstable?
A) 1901 to 1909 B) 1911 to 1919 C) 1921 to 1929 D) 1931 to 1939 E) none of the above