Paul has the utility function U(q1,q2 ) = q1q2. If Paul consumes q1 = 4 and q2 = 2 his Marginal Rate of Substitution is
A) -2.
B) 1.
C) -1.
D) -1/2.
D
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If a firm can adjust its employment of all inputs, then it is
a. experiencing economies of scale. b. in the long run. c. off its expansion path. d. limited only by the capacity of its fixed capital.
When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
The natural rate of unemployment is equal to the unemployment rate when there is only:
A. structural and frictional unemployment. B. frictional unemployment. C. cyclical unemployment. D. structural and cyclical unemployment.
Supplemental Security Income (SSI) is a type of
a. in-kind transfer. b. minimum wage law. c. private charity. d. welfare payment.