A firm produces 5 units of output from the last dollar it spends on labor and 10 units from the last dollar spent on capital. The firm should
A. employ more labor and less capital.
B. employ less capital and labor.
C. employ more capital and labor.
D. employ more capital and less labor.
Answer: D
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The upward slope of the supply curve reflects the
A. principle of specialization in production. B. fact that price and quantity supplied are inversely related. C. law of increasing substitution. D. principle of diminishing marginal productivity
In the figure above, what happens to total revenue as we move from point A to point B?
A) It increases. B) It decreases. C) It remains constant. D) It becomes negative. E) More information about the elasticity of demand is needed to determine if it increases, decreases, or does not change.
John and Robert are having an argument about the recent economic downturn in Florin. According to John, government intervention is not required to bring the economy back to the natural level of real GDP. However, Robert believes that the only way to restore the economy is to increase aggregate demand through government intervention. From the above argument, we can conclude that Robert believes in
the _____ of thought. a. Keynesian school b. classical school c. neoclassical school d. new classical school
A decrease in interest rates will immediately shift
A. aggregate supply to the left. B. aggregate supply to the right. C. aggregate demand to the left. D. aggregate demand to the right.