Use the information provided in Table 7.2 below to answer the question(s) that follow.
Table 7.2Inputs Required to Produce a Product Using Alternative Technologies
Refer to Table 7.2. If the hourly price of capital is $10 and the hourly price of labor is $20, which production technology should be selected?
A. A
B. B
C. C
D. D
Answer: A
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As we move down a straight-line demand curve, the price elasticity becomes
A. larger. B. smaller. C. larger and then smaller. D. smaller and then larger.
When demand is inelastic,
A) price and revenue move in opposite directions. B) price and revenue are not related. C) price and quantity demanded move in opposite directions. D) price and revenue move in the same direction.
Economists who believe in complete crowding out would argue that
A) jobs created or saved because of increased government spending will be matched by an equal number of jobs created by an increase in private sector spending. B) jobs created or saved because of increased government spending will be completely offset by jobs destroyed by a decline in private sector spending. C) government policies intended to stimulate aggregate demand will be completely ineffective. D) government policies intended to stimulate aggregate demand will tend to be effective. E) a and c
Doggy Treats is selling dog treats in a purely competitive market. Its output is 800 treats, which it sells for $10 a treat. At the 800-treat level of output, the marginal cost is $11, the average variable cost is $9.00, and the average variable cost is
$8.00. Should the firm increase output, decrease output, or not produce? Why? How should the firm determine that optimal level of output? What will be an ideal response?