The equation of exchange is written as
A. M× V = P× Y.
B. M× P = V× Y.
C. M× Y = P× V.
D. M× Y = Y× P.
Answer: A
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The analysis of economic outcomes before and after some economic variable is changed is referred to as:
A) cardinal research. B) comparative statics. C) Pareto analysis. D) marginal study.
In the long run, a reduction in productivity will cause
A) an increase in the capital—labor ratio and an increase in consumption per worker. B) an increase in the capital—labor ratio and a decrease in consumption per worker. C) a decrease in the capital—labor ratio and a decrease in consumption per worker. D) a decrease in the capital—labor ratio and an increase in consumption per worker.
If MUx/Px > MUy/Py, the consumer can increase utility by buying more of good x, which will cause the MUx to rise
a. True b. False
If a firm is experiencing diminishing marginal returns,
a. total output decreases as all resources are increased b. total output decreases as all resources are decreased c. total output decreases as one variable resource is increased, other things constant d. additional increments of output diminish as one variable resource is increased, other things constant e. additional increments of output diminish as all variable resources are increased