Given that all countries have the same Cobb-Douglas production function, i.e. Y/N = (K/N)b, a ten-fold difference in per capita income requires a difference in capital per capita by a factor of
A) 10.
B) 10b.
C) 101/b.
D) b.
C
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The income-expenditure model focuses on changes in
A) price. B) operational lags. C) output levels. D) import restrictions.
If a firm increases production, then its:
A. variable costs rise. B. fixed costs stay the same. C. total costs increase. D. All of these are true.
Economists normally
a. do not try to explain people's tastes, but they do try to explain what happens when tastes change b. believe that they must be able to explain people's tastes in order to explain what happens when tastes change. c. do not believe that people's tastes determine demand, so they ignore the subject of tastes. d. incorporate tastes into economic models only to the extent that tastes determine whether pairs of goods are substitutes or complements.
Disposable income is best defined as
a. income adjusted for inflation b. nominal income c. the income remaining after bills have been paid d. income after taxes have been paid and transfers received e. income paid in dollars that are worthless