When economists use the term Ceteris paribus, they are indicating that:
A. the relationship between two economic variables cannot be determined.
B. the analysis is true for the individual but not for the economy as a whole.
C. all other variables except the ones specified are assumed to be constant.
D. their conclusions are based on normative economics rather than positive economic analysis.
Answer: C
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We manufacturer automobiles given the production function q = 5KL where q is the number of autos assembled per eight-hour shift, K is the number of robots used on the assembly line (capital) and L is the number of workers hired per hour (labor)
If we use K=10 robots and L=10 workers in order to produce q = 450 autos per shift, then we know that production is: A) technologically efficient. B) technologically inefficient. C) maximized. D) optimal.
If the price of a good doubles and quantity supplied triples, then
a. demand is elastic b. demand is inelastic c. supply is inelastic d. supply is elastic e. there is insufficient information to reach any conclusion about the price elasticity of supply
Which of the following is a key difference between the economic activities of government and those of private firms?
What will be an ideal response?
Suppose the consumption function is C = $200 + 0.85YD. If disposable income is $400, consumption is
A. $540. B. $340. C. $200. D. $185.