If the MPC is .85 and the APC is .75, the MPS is
A. .15.
B. .25.
C. .75.
D. .85.
A. .15.
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A decline in domestic output would cause a ________ in net exports and a ________ in the exchange rate
A) rise; rise B) rise; fall C) fall; rise D) fall; fall
Which of the following is a determinant of price elasticity of demand?
a. Availability of substitute goods b. Excess capacity c. Scale of production d. Inventories e. Cost of production
Which statement is true of the graph shown? 
A. The shut down point of the firm would be at an output more than Q*. B. The marginal cost curve crosses the AFC curve at the lowest point of the AFC curve. C. The marginal cost curve should not cross the AFC while it is falling. D. If an ATC curve was drawn in the graph it would intersect the MC curve but not any other curve.
A linear specification, Q = aK + bL, is not appropriate for estimating a production function because
A. the firm could produce positive levels of output at zero cost. B. the marginal products of the inputs are assumed constant. C. it does not allow the firm to substitute capital for labor. D. both b and c E. all of the above