An input combination is an interior choice if and only if:
A. it lies below the isocost line.
B. uses at least a little bit of every input.
C. lies on an isoquant.
D. satisfies the tangency condition.
B. uses at least a little bit of every input.
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A demand curve with unit elasticity can never touch either the vertical or horizontal axes.
Answer the following statement true (T) or false (F)
Refer to Table 4-12. The equations above describe the demand and supply for Bubba's Fried Jellybeans. The equilibrium price and quantity for Bubba's Fried Jellybeans are $40 and 5 thousand units. What is the value of producer surplus?
A) $5 thousand B) $12.5 thousand C) $25 thousand D) $37.5 thousand
Some economists argue that policymakers can use monetary and fiscal policy to reduce the severity of economic fluctuations. What are some things policymakers can do when higher inflation becomes a concern?
Monetarists believe that velocity
A) is constant. B) changes erratically. C) and the money supply always have an inverse relationship. D) changes in a way that can be understood and predicted.