The marginal rate of technical substitution of labor for capital (MRTSLK) tends to be higher
a. the larger the quantity of capital already employed.
b. the lower the quantity of capital already employed.
c. when a firm is choosing baskets that are technologically inefficient.
d. in the short-run compared to the long-run.
a. the larger the quantity of capital already employed.
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A consumer has $1,000 a week to spend on renting square feet of housing (at a price of $5 per square foot) and eating out (at a price of $20 per meal). With square feet of housing on the horizontal and meals on the vertical axis, what is the vertical intercept and what is the slope of this consumer's budget constraint?
What will be an ideal response?
The above figure shows an individual's demand curve for time per month spent telecommunicating while driving (talking on the car phone.) A car phone is useless except for talking with somebody who is not in the car
If calls are priced at ten cents per minute, what is the consumer surplus derived from talking? What is the most this person would pay for the car phone? Explain.
A farm can produce 10,000 bushels of wheat per year with 5 workers and 13,000 bushels with 6 workers. The marginal product of the sixth worker for this farm is:
a. 10,000 bushels. b. 3,000 bushels. c. 500 bushels. d. 23,000 bushels.
Which of the following does not contribute to GDP?
a. You lose $50 playing cards with friends. b. You pay a doctor $200 to treat an arm that you broke in an accident. c. You pay $300 for this month's rent on your apartment. d. Your economics textbook is revised, and you buy the new edition.