The marginal rate of technical substitution is the ratio of
A. labor to the price of labor.
B. capital to the price of capital.
C. capital to labor.
D. the marginal product of labor to the marginal product of capital.
Answer: D
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Of the following, the country with the highest average income per day in the world is
A) Japan. B) the United States. C) France. D) Germany. E) China.
Jeep Cherokees are a normal good. If people's incomes increase, the direct result will be
A) an increase in the supply of the vehicles. B) a decrease in the demand for the vehicles. C) an increase in the demand for the vehicles. D) Both answers A and C are correct.
This graph depicts a tax being imposed, causing demand to shift from D1 to D2. The distance AC in the graph shown represents all of the following except the:
A. amount of the tax.
B. difference between what the consumer pays and what the seller receives.
C. "tax wedge."
D. total tax revenue generated for the government by imposing the tax.
After some point successive equal increases in a variable factor of production, when added to a fixed amount of inputs, will result in smaller increases in output. This is known as
A. marginal physical product. B. the long run. C. the law of diminishing marginal product. D. short run average cost.