Draw a graph using production indifference curves and budget lines showing a firm initially minimizing cost with its inputs of A and B. Then illustrate a new optimal combination of inputs when the prices of the inputs change.
What will be an ideal response?
The graph should be very similar to Figure 7-15 in the text
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Let's assume Ben can produce 3 units of a material good (M) or 3 units of a spiritual good (S) in a day, while Cal can produce 1 M or 2 Ss in a day. Both Ben and Cal can potentially produce a larger combination of M and S
A) if Ben specializes in S and Cal in M and they exchange with one another. B) if Ben specializes in M and Cal in S and they exchange with one another. C) if Ben specializes in both goods and doesn't exchange with Cal. D) only if Cal finds a way to also produce 3 M and 3 S per day.
China has few state-owned enterprises left in its economy
Indicate whether the statement is true or false
When unemployment is above the natural rate,
A. the inflation rate falls. B. inflation rises. C. nominal wages decrease. D. wage-price spirals occur.
Which Federal Government program(s) pay(s) for the health needs of people who are old and poor?
A. Medicare B. WIC C. Medicaid D. Medicare and Medicaid