Suppose the production function for T-shirts can be represented as q = L0.25 K0.75. Show that the production function has constant returns to scale
What will be an ideal response?
When L = L1 and K = K1, q = q1. Let L2 = ?L1 and K2 = ?K1 so that both L and K have increased by the same proportion. Then, q2 = ?L10.25 ?K10.75 = ?0.25+0.75 L10.25 K10.75 = ?q1. Thus for any ?, output changes by the same proportion that the inputs changed.
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Suppose the population (age 16 and over) of Vietnam is 100 million; 5 million are unemployed, and 40 million hold jobs. The labor force participation rate in Vietnam is
a. 10 percent. b. 45 percent. c. 50 percent. d. 90 percent.
If the government institutes policies that diminish incentives to save, then in the loanable funds market
a. the demand for loanable funds shifts rightward. b. the demand for loanable funds shifts leftward. c. the supply of loanable funds shifts rightward. d. the supply of loanable funds shifts leftward.
Externalities are direct benefits or costs accruing to individuals or groups of individuals who were not participants in the activity.
Answer the following statement true (T) or false (F)
What are the two conflicting goals of bankers? How do these conflicting goals get resolved in the Federal funds market?
What will be an ideal response?