Assume a firm uses two inputs, capital and labor. All else constant, an increase in the price of labor would create an incentive for the firm to:
A) substitute labor for capital in its production function.
B) substitute capital for labor in its production function.
C) hire more capital and labor.
D) hire less capital while holding the amount of labor employed constant.
B
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What factors are not important in determining exchange rate fluctuations in the long run?
A) preferences for domestic and foreign goods across countries B) speculating in currency markets C) relative price levels across countries D) relative rates of productivity growth across countries
Why are people today, in general, better fed, sheltered, and protected against disease than people were in the past?
a. increased economic growth b. lowered production costs c. more charitable organizations d. less government interference
Accounting costs represent
A. explicit costs paid by the firm. B. both sunk and future costs. C. long run costs only. D. opportunity costs.
In the Solow model, if f(k) = 2k0.5, s = 0.1, n = 0.1, and d = 0.05, what is the value of f(k) at equilibrium?
A. 2/3 B. 8/3 C. 4/3 D. 2