To say that isoquants are convex is to say that
A) the marginal rate of technical substitution falls as labor increases.
B) capital and labor are perfect substitutes.
C) labor, but not capital, is subject to the law of diminishing marginal returns.
D) there are constant returns to scale.
A
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For network externalities to occur
A) the government has to create new laws. B) deadweight loss must be minimized. C) there must be a critical mass of users. D) there must be a positive benefit to society.
Since an individual spends a small share of her income on salt, the elasticity of demand is likely to be low
a. True b. False Indicate whether the statement is true or false
Interest paid by households and by the government is
A. not counted in GDP because it is not assumed to flow from the production of goods and services. B. not counted in GDP but is counted in GNP because it is paid by U.S. citizens to people living in the United States. C. counted in national income, but not in GDP. D. included in both GDP and GNP because it represents an expenditure by one group and a receipt of income by another group.
The use of monetary policy to shift aggregate demand to the right in a severe recession is like:
A. Pushing on a string B. Putting all eggs in one basket C. Pulling on one's purse-strings D. Pushing the envelope