Indifference curves for perfect substitutes must be parallel lines with a slope of negative one
Indicate whether the statement is true or false
False. Indifference curves for perfect substitutes are parallel lines, but the slope is not necessarily negative one.
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Suppose the production function is q = 12 L0.25 K0.75. 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 De Beers Diamond company advertises heavily to promote the sale of all diamonds, not just its own. This is evidence that it has a monopoly position to some degree
a. True b. False Indicate whether the statement is true or false
Frictional unemployment is:
A. unemployment caused by workers who are changing their location, job, or career. B. a mismatch between the skills workers can offer and the skills that are in demand. C. the most alarming cause of unemployment. D. the effect of wages remaining persistently above the market-clearing level.
The primary use of derivative contracts is:
A. for IRA and other pension plans since they only have value well into the future. B. to add to the profits an investor obtains through information asymmetry. C. to shift risk among investors. D. for investors seeking a greater return by taking greater risk.