“A producer wanting to employ optimal quantity of inputs should choose the point where diminishing returns set in.” True or false?
What will be an ideal response?
False. The correct rule is marginal revenue product = input price. It pays to go beyond diminishing returns so long as MRP is at least as great as input P, which normally requires going past the point of diminishing returns.
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When the economy is in equilibrium, there will be no unemployment
Indicate whether the statement is true or false
When would it be plausible to describe the demand for a product by drawing a straight line, Q = a - bP?
A. Only if no important factors other than price affect demand B. In the vast majority of scenarios C. Practically never D. If we believe that factors other than price alone determine demand
The explanation for the slope of
a. the supply of loanable funds curve is based on the logic that a higher real interest rate leads to higher saving. b. the demand for loanable funds curve is based on the logic that a higher interest rate leads to higher saving. c. the supply of loanable funds curve is based on the logic that a higher real interest rate leads to lower saving. d. the demand for loanable funds curve is based on the logic that a higher interest rate leads to lower saving.
Refer to the information provided in Table 22.3 below to answer the question(s) that follow. Table 22.3 PointAggregate Income (Y)Aggregate Consumption (C) A 15 19 B 30 23 C 45 27 D 60 31 E 75 35 F 90 39The data in the table was used to estimate the following consumption function: C = 20 + 0.2YRefer to Table 22.3. The error for point D is equal to
A. -2. B. -1. C. +1. D. +2.