Refer to Figure 2-7. Assume that in response to changing consumer demands, Apple cuts back on the production of self-driving automobiles and increases its production of traditional automobiles. This strategy is best represented by the
A) movement from K to L in Graph C. B) movement from F to E in Graph A.
C) movement from G to J in Graph B. D) movement from J to H in Graph B.
D
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The tables above show the marginal costs and benefits from production of paper. The efficient level of output is ________ of paper
A) 1,600 tons B) 2,400 tons C) 3,200 tons D) 4,000 tons
Suppose there are ten identical manufacturing firms that produce computer chips with machinery (capital, K) and labor (L), and each firm has a production function of the form q = 10KL0.5. What is the industry-level production function?
A) Q = 10K10L5 B) Q = 100KL0.5 C) Q = 100L0.5 D) none of the above
An alternative to maintaining an overvalued currency is to ________ the fundamental value of the exchange rate by ________ monetary policy.
A. increase; easing B. decrease; tightening C. decrease; easing D. increase; tightening
A market failure is a situation in which
A. the market equilibrium leads to either too many or too few resources going towards producing the good or service. B. resources are being efficiently allocated, but some companies are forced to shut down. C. there is no free entry or exit into an industry. D. the government must take actions to correct the failures of the market in a particular industry.