Suppose that the production function is Y = AK0.35L0.65, the number of workers equals 800, the capital stock is $150,000, and real GDP is $750,000. What is the value of total factor productivity?
What will be an ideal response?
Y = AK0.35L0.65, so A = Y / K0.35L0.65 = $750,000 / ($150,000)0.35(800)0.65 = 150.11
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Shooting Star Books is a small publishing company that specializes in science fiction books. Like most publishers, Shooting Star releases new books in hardcover form and later releases paperback versions of the books
The marginal cost of printing both types of books is $2 per book, and Shooting Star maximizes profits by practicing intertemporal price discrimination. The annual demand for recently released (hardcover) books is Q1 = 400 - 10P1 where quantity demanded is measured in thousands of books and price is measured in dollars per book. The annual demand for the paperback version of previously released books is Q2 = 800 - 40P2. a. What are the marginal revenue curves associated with the two demand curves for books? b. What are the profit maximizing prices for hardcover and paperback books? What are the quantities of books demanded at these prices for hardcover and paperback books? c. Suppose the market demand for paperback books shifts to Q2 = 150 - 100P2. How does this change affect the profit maximizing price and quantity in the paperback book market? Does this change affect the profit maximizing outcome in the hardcover book market?
The current break-even quantity is
a. 3000 b. 600 c. 500 d. 300
Which of the following is false?
a. A resource is anything that can be used to produce anything else we value. b. Resources are costly because they have alternative uses c. Losses mean resources are not being used efficiently. d. None of the above is false; all are true.
A good is considered normal when its income elasticity of demand is ___ and inferior when the its income elasticity of demand is ___
a. Greater than zero, less than zero. b. Less than zero, greater than zero. c. Greater than one, less than one. d. Less than one, greater than one.