Under the marginal productivity principle,
A. the marginal economic profit of all inputs is zero at their optimal levels.
B. the marginal physical product of each input is equal at their optimal levels.
C. the marginal revenue product of each input is equal at their optimal levels.
D. the slope of the marginal revenue product curve for each input is zero at the optimal level.
Answer: A
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Which of the following factors would decrease in the quantity of investment demanded?
A. A decrease in business taxes B. An increase in the rate of technological change C. An increase in the interest rate D. A decrease in the stock of capital goods on hand
If the exchange rate changes from 1.00 euro per dollar to 1.10 euro per dollar, the dollar has
A) depreciated against the euro. B) appreciated against the euro. C) fallen inversely in value. D) appreciated against the dollar. E) depreciated against the dollar.
When having a choice of which estimator to use with a binary dependent variable, use
A) probit or logit depending on which method is easiest to use in the software package at hand. B) probit for extreme values of X and the linear probability model for values in between. C) OLS (linear probability model) since it is easier to interpret. D) the estimation method which results in estimates closest to your prior expectations.
If an economy is at potential GDP and an expansionary policy is correctly anticipated, the result will be: a. a short-run fall in output and employment
b. little or no increase in GDP. c. an increase in wages along with a dramatic fall in the price level. d. a rapidly expanding economy. e. a severe recession.