Refer to the information provided in Table 8.1 below to answer the question(s) that follow.
Table 8.1 
Refer to Table 8.1. Assuming the price of labor (L) is $5 per unit and the price of capital (K) is $10 per unit, what production technique should this firm use to produce 2 units of output?
A. production technique A
B. production technique B
C. The firm is indifferent between production technique A and production technique B.
D. It is impossible to determine if the firm should select production technique A or B because total fixed costs are not given.
Answer: B
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If price changes by one firm induce rival firms selling close substitutes to alter their prices,
A) firms will be able to raise their prices without fear of losing sales. B) the demand curve will shift in response to a change in price. C) the original firm faces an elastic demand curve. D) the original firm faces an inelastic demand curve. E) there is no competition between the rival firms.
An aggregate supply curve that slopes upward must be:
A. a short-run curve. B. a long-run curve. C. an individual firm's supply curve. D. an individual industry's supply curve.
The fact that there are fewer and fewer potential investments that will generate returns high enough to make the cost of paying back a loan worthwhile is reflected in the:
A. upward-slope of the supply curve in the market for loanable funds. B. downward-slope of the supply curve in the market for loanable funds. C. upward-slope of the demand curve in the market for loanable funds. D. downward-slope of the demand curve in the market for loanable funds.
Which of the following observations regarding the Gini coefficient (G) is incorrect?
a. If G is one, the Lorenz curve would overlap the line of perfect income equality. b. If G is zero, it represents perfect income equality c. If G is one, it represents perfect income inequality d. The closer G is to 1 the greater the degree of income inequality