The capacity utilization rate is the ratio of ________ to ________
A) production; capacity
B) capacity; production
C) capacity; potential GDP
D) none of the above
A
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Refer to Figure 4-7 which shows the market for watermelons. Suppose the government imposes a price floor of Pw. How will the price floor affect the quantity supplied, quantity demanded, and quantity exchanged?
What will be an ideal response?
Some labor union wage contracts contain a cost-of-living adjustment indexed against _____________.
a. inflation b. consumer prices c. cost of materials d. profits
Suppose that flu shots create a positive externality equal to $8 per shot. Further suppose that the government offers a $6-per-shot subsidy to producers. What is the relationship between the equilibrium quantity and the socially optimal quantity of flu shots produced?
a. They are equal. b. The equilibrium quantity is greater than the socially optimal quantity. c. The equilibrium quantity is less than the socially optimal quantity. d. There is not enough information to answer the question.
If the production function is Q = K.5L.5 and capital is fixed at 1 unit, then the average product of labor when L = 36 is:
A. 2/3. B. 1/6. C. 1/3. D. None of the answers are correct.