Refer to the following figure. The price of capital is $50 per unit:
Which of the following combinations of capital and labor lies on the expansion path?
A. 130K, 175L
B. 130K, 200L
C. 110K, 120L
D. 60K, 120L
Answer: A
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Average product is equal to
A) marginal product + total product. B) total product ÷ marginal product. C) total product ÷ quantity of labor. D) total product × quantity of labor. E) marginal product × quantity of labor.
A tax rate system characterized by higher marginal tax rates as income increases is known as
A) a progressive tax system. B) a regressive tax system. C) a proportional tax system. D) a flat-rate tax system.
If demand increases and supply decreases, then equilibrium price must decrease, but equilibrium quantity is indeterminate
a. True b. False Indicate whether the statement is true or false
Suppose Country X produces only two goods, food and clothing. At the initial free-trade equilibrium, the country produced 40 units of food and 20 units of clothing, and it exports 10 units of food and imports 10 units of clothing. Now suppose technological innovation in Country X leads to a balanced growth while leaving the relative prices of food and clothing unchanged in the international market. Production of food in Country X rises to 50 units and production of clothing rises to 25 units. If consumption of food rises to 42 units, we can most reasonably conclude that the
A. consumption of clothing rises to 32 units. B. the size of Country X's trade triangle has increased. C. consumers in Country X are worse off. D. Country X's willingness to trade declines.