By the method of Lagrange multipliers, the optimal value of the Lagrange multiplier equals the:
A) marginal utility of income.
B) marginal utility of each good.
C) marginal utility per dollar spent on the last unit of each good.
D) A and B above
E) A and C above
E
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Producing where marginal revenue equals marginal cost is equivalent to producing where
A) total revenue is equal to total cost. B) total profit is maximized. C) average fixed cost is minimized. D) average total cost equals average revenue.
Which of the following will NOT cause market supply to increase?
A) an increase in the number of firms supplying the product in the market B) a change in technology which allows a larger level of production at every price C) an increase in the costs of resources used to produce the product D) a decrease in labor costs
If the cost of the capital is 9%, is the investment feasible?
a. Yes because the NPV>0 b. Yes because the NPV=0 c. No because the NPV<0 d. Need information on the marginal benefits and costs
Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and GDP Price Index in the context of the Three-Sector-Model?
a. The real risk-free interest rate falls, and GDP Price Index falls. b. The real risk-free interest rate rises, and GDP Price Index falls. c. The real risk-free interest rate and GDP Price Index remain the same. d. The real risk-free interest rate falls, and GDP Price Index remains the same. e. There is not enough information to determine what happens to these two macroeconomic variables.