The branch of economics which studies the behavior of entire economies is called
A) public economics. B) macroeconomics.
C) microeconomics. D) normative economics.
B
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Suppose GE produces 1 million light bulbs per month While labor is variable both in the short run and the long run, capital is fixed in the short run. Labor is sold at a rate w and capital is rented at a rate r. a. On a graph with labor on the horizontal axis, illustrate the current isocost and isoquant for GE. Carefully label the slope of the isocost. b. For the rest of the problem, suppose a new tax on capital is implemented but GE intends to continue to produce 1 million light bulbs per year. What will GE do differently in the short run and the long run? Explain using your graph from part (a). c. Using your answer to part (b), explain what happens to the short run cost curve in the short run. What happens to this short run curve in the long run? Do costs rise more or less in the
long run than they do in the short run? d. Do total costs rise more or less in the long run than total expenditures do in the short run? Explain. What will be an ideal response?
Explain the term "economics."
What will be an ideal response?
One would speak of a change in the quantity of a good supplied, rather than a change in supply, if
A) the price of the good changes. B) the cost of producing the good changes. C) prices of substitutes in production change. D) supplier expectations about future prices change.
With respect to the average cost curves, the marginal cost curve
a. intersects average total cost, average fixed cost, and average variable cost at their minimum points b. intersects average total cost, average fixed cost, and average variable cost at their maximum points c. intersects both average total cost and average variable cost at their minimum points d. intersects average total cost where it is increasing and average variable cost where it is decreasing e. intersects only average total cost at its minimum point