In the Cobb-Douglas production function, Y = KaL1-a, the fraction of income spent as payments to labour is:
A. a.
B. 1 - a.
C. dependent on the amount of labour employed.
D. dependent on the amount of capital employed.
Ans: B. 1 - a.
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If the quantity of labor supplied increases by 5 percent when the wage increases by 10 percent, the elasticity of labor supply is:
A. 5. B. 2. C. 1/2. D. 1/5.
In what way does long-run equilibrium under monopolistic competition differ from long-run equilibrium under perfect competition?
A) Firms in perfect competition achieve productive and allocative efficiency while firms in monopolistic competition achieve neither allocative nor productive efficiency. B) The only difference is that in a monopolistically competitive market there are many brands to choose from while in a perfectly competitive market there is one standard product. C) Firms in perfect competition achieve productive efficiency while firms in monopolistic competition achieve allocative efficiency. D) Firms in perfect competition achieve allocative efficiency while firms in monopolistic competition achieve brand efficiency.
What line in the above graph would best represent the supply curve for land?
A. 1
B. 2
C. 3
D. 4
Dividends are paid by corporations out of _____ leading to _____
a. pre-tax income; dividends escaping taxation b. pre-tax income; the double taxation of saving c. after-tax income; dividends escaping taxation d. after-tax income; the double taxation of saving