The steeper an isoquant is,
A) the greater is the marginal productivity of labor relative to that of capital.
B) the greater is the substitutability between capital and labor.
C) the greater is the need to keep capital and labor in fixed proportions.
D) the greater is the level of output.
A
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The above figure shows the demand curve for movie rentals from Redbox. If Redbox raised its price from $2.50 to $3.00, between these two prices the price elasticity of demand equals
A) 1.2. B) 0.8. C) 2.0. D) 0.5.
In the legal sector, some practice areas have declined in recent years
For example, personal-injury and medical-malpractice cases have been undercut by state laws limiting class-action suits, out-of-state plaintiffs, and payouts on damages, and securities class-action litigation has declined in part because of a buoyant stock market. How does this affect the market for lawyers? A) The quantity of lawyers demanded decreases and this is represented by a movement along the demand curve. B) The supply of lawyers shifts to the left. C) The demand for lawyers shifts to the left. D) Both the demand and supply curves decrease.
When you are faced with a lack of information concerning a purchase, you should:
A. consider the opportunity cost of gaining more information. B. not make the purchase without complete information. C. always seek out the most information you can before making a purchase. D. None of these statements is true.
What must happen to the market price in order for a shortage to be eliminated?
A. Price must fall. B. Price must rise. C. Price must stay the same. D. Price may rise or fall depending on the size of the shortage.