Answer the following statement(s) true (T) or false (F)
1. A firm seeks to product at a point where an isocost is tangent to a isoquant.
2. Cost minimization requires that the marginal product of labor equal the marginal product of capital.
3. A point on the firm's expansion path both minimizes the cost of producing a given output level and maximizes the output obtained for a given expenditure level.
4. All points on the expansion path have the same marginal rate of technical substitution.
5. In the long run there is no distinction between average cost and average variable cost.
1. True
2. False
3. True
4. True
5. True
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Define the following terms: a. Recession b. Mixed economy c. Transfer payments d. Progressive taxation
What will be an ideal response?
A rule of thumb in the employment of resources is to set
A) marginal revenue product (MRP) equal to marginal factor cost (MFC). B) marginal revenue (MR) equal to marginal cost (MC). C) marginal physical product equal to marginal resource cost. D) none of the above.
When you have equity in a company, it means you:
A. own part of a company and share in its profits. B. have diversified the company's risk. C. have diversified your risk by investing with a company. D. own a portion of the debt obligations of a company.
Which of the following is an opportunity cost of cyclical unemployment?
a. A higher wage rate b. A lower interest rate c. Lower taxes paid by the employed d. Costs of updating prices e. Lost earnings of the unemployed