Let the production function be q = ALaKb. The function exhibits increasing returns to scale if
A) a + b = 1.
B) a + b > 1.
C) a + b < 1.
D) Cannot be determined with the information given.
B
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Refer to the figure above. What is the opportunity cost of producing one computer program?
A) 0.2 Web sites B) 5 Web sites C) 8 Web sites D) 12 Web sites
In the case of purely flexible exchange rates, a decrease in domestic real income, with constant prices and domestic credit, will lead to
A) an increase in international reserves. B) the depreciation of the domestic currency. C) the appreciation of the domestic currency. D) no change in the value of the domestic currency.
What are the twin goals of the Federal Reserve Bank?
a) Low unemployment and zero inflation. b) No unemployment and stable prices. c) Low unemployment and stable prices. d) No unemployment and zero inflation.
Health insurance companies impose deductibles on policies and co-payments on claims
A) to increase sales. B) to reduce moral hazard problems. C) to reduces sunk costs. D) to increase prices.