Using the production function Real GDP = T (L, K), define the term production function and describe what each of the variables (T, L, and K) represents. When graphed with Real GDP on the vertical axis and labor on the horizontal axis, which variable(s) can shift the production function and which variable(s) can cause a movement along the production function?
A production function specifies the relation between technology (T) and the quantity of factor inputs to output or Real GDP. In this production function the relevant inputs are labor (L) and capital (K). With labor on the horizontal axis of the production function, a change in labor would cause a movement along the production function. When technology or capital change, it causes the production function to shift.
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A) time deposits B) transactions deposits C) savings deposits D) equity
All of these factors create economies of scale, except
a. Specialization and Division of Labor b. Technological Factors c. Increase in advertisement costs d. Quantity discounts
Assume that your roommate is very messy. Suppose she gets a $25 benefit from being messy but imposes a $50 cost on you. The Coase theorem would suggest that an efficient solution would be for you to
a. pay your roommate at least $25 but no more than $50 to clean up after herself. b. pay your roommate at least $51 to clean up after herself. c. charge your roommate at least $25 to have you clean up after her. d. charge your roommate at least $50 but no more than $100 to keep you from complaining about the mess.