How much do outputs increase when labor and capital increase from 1 to 2 units for the following production function , q = 10L0.5K0.3?
A) 7.4 units
B) 7 units
C) 8 units
D) None of the above.
A
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Answer the following statements true (T) or false (F)
1. In the long run, under conditions of perfect competition, economic profits are eventually eliminated. 2. If the entry of new firms substantially raises demand for resources, two forces tend to eliminate economic profit in the long run: upward pressure on cost and downward pressure on price. 3. The more that firms advertise, the closer they get to perfect competition. 4. The lowest possible ATC curve is attained at the optimal scale of output. 5. If price equals marginal cost at the long-run equilibrium, this means that economic efficiency is being achieved.
Which of the following is an exogenous variable in the Three-Sector-Model?
a. Credit risk b. Country risk c. Expected inflation d. Industry risk e. Real risk-free interest rate
A measurement in terms of current dollar value is called a(n) ________ quantity.
A. indexed B. real C. nominal D. deflated
Suppose the actual and expected price levels in an economy are initially equal. However, the actual price level falls eventually due to a change in economic conditions. Which of the following will occur over the long run??
a. The economy will move rightward along the short-run aggregate supply curve.
b. The economy will move leftward along the short-run aggregate supply curve.
c. The short-run aggregate supply curve will shift to the right.
d. The short-run aggregate supply curve will shift to the left.
e. The short-run aggregate supply curve will become flatter.