A balance-of-payments surplus can be reduced with
A. Increased government spending.
B. Contractionary monetary policy.
C. Increased tariffs and quotas on foreign goods.
D. Increased taxes.
Answer: A
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The marginal rate of technical substitution of labor for capital (MRTSLK) tends to be higher
a. the larger the quantity of capital already employed. b. the lower the quantity of capital already employed. c. when a firm is choosing baskets that are technologically inefficient. d. in the short-run compared to the long-run.
Country A and country B both produce shirts and shorts. Country B has an absolute advantage producing both shirts and shorts. Is there any condition under which the two countries could gain from trade?
Efficiency in the provision of a public good is achieved when its
A) total social benefit equals its total social cost. B) average social benefit equals its average social cost. C) marginal social benefit equals its marginal social cost. D) marginal social benefit equals zero.
Suppose Kate's Great Crete (KGC) has annual variable costs of VC = 30Q + 0.0025Q2 and marginal costs of MC = 30 + 0.005Q, where Q is the number of cubic yards of concrete it produces per year. In addition, it has an avoidable fixed cost of $50,000 per year. KGC's demand function is Qd = 20,000 - 400P. What is KGC's profit at the profit maximizing sales price?
A. $30,000 B. $90,000 C. $120,000 D. -$30,000