Decreasing returns to capital (N) implies that a 4% increase in N will cause
A) Y to increase by more than 4%.
B) Y to increase by exactly 4%.
C) Y to increase by less than 4%.
D) no change in Y/N.
C
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Why might the Federal Reserve intervene in foreign currency markets?
A) to ensure the safety of overseas investments for private investors B) to maintain a desired exchange rate for the dollar C) to ensure the safety of overseas investments for pension funds D) to ensure the safety of overseas investments for banks
Consider the salary of Mary Sue Nelson, a sales agent for Plain Truth Advertising. Her wage package is W = 1,000 + 0.4Q, where Q is her dollar volume of sales. Her productivity is Q = 200e + µ, where e denotes her hours of effort and µ is a random variable with mean 0. She has an effort cost of C = e2. Under this contract, the expected value of her total wages will be:
A. $4,200.00. B. $3,060.00. C. $1,000.00. D. $200.00.
The law of diminishing marginal utility gives us a deeper understanding of the downward-sloping demand curve because
A. Consumers are willing to pay a higher price for a greater quantity. B. Consumers do not respond to a change in price. C. Consumer tastes change due to advertising. D. When marginal utility is high, we are willing to pay a higher price.
Given percentage change in supply and the price elasticity of supply, explain how percentage change in equilibrium price varies as the price elasticity of demand changes from 0 to infinity.
What will be an ideal response?