Suppose the production function is q = 12 L0.25K0.75. Determine the long-run capital-to-labor ratio (K/L) if the cost a unit of capital (r) is three times the cost of a unit of labor (w)
What will be an ideal response?
The firm minimizes costs by setting MRTS = w/r. MRTS = MPL /MPLK = K/3L = w/r = 1/3. This firm will set K/L equal to one.
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New information ought not to influence economic decision-making if ________
A) consumers rely on rational expectations B) monetary policy changes C) monetary and/or fiscal policy changes D) that information has already been anticipated
The basic disadvantage of a proprietorship is unlimited liability.
Answer the following statement true (T) or false (F)
A "conservative" would most likely argue in favor of
a. tax increases when fiscal stimulus is necessary, and spending cuts when fiscal restraint is necessary. b. tax cuts when fiscal restraint is necessary, and spending cuts when fiscal stimulus is necessary. c. tax cuts when fiscal stimulus is necessary, and spending cuts when fiscal restraint is necessary. d. spending increases when fiscal expansion is necessary, and tax increases when fiscal stimulus is necessary.
An economy in which output has decreased and prices have decreased would suggest a:
A. decrease in short-run aggregate supply. B. increase in aggregate demand. C. increase in short-run aggregate supply. D. decrease in aggregate demand.