Smith and Jones comprise a two-person economy. Their hourly rates of production are shown below. CalculatorsPer HourComputersPer HourSmith10010Jones1206Suppose Smith and Jones begin by producing 0 computers and 220 calculators per hour. If they wish to produce 2 computers and 200 calculators per hour efficiently, then Smith should spend ________, and Jones should spend ________.
A. 48 minutes on computers and 12 minutes on calculators; 1 hour on calculators
B. 12 minutes on computers and 48 minutes on calculators; 1 hour on calculators
C. 30 minutes on each; 30 minutes on each
D. 1 hour on calculators; 10 minutes on computers and 50 minutes on calculators
Answer: B
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Exhibit 14A-1 Aggregate demand and supply model
Given the shift of the aggregate demand curve from AD1 to AD2 in Exhibit 10A-1, the real GDP and price level (CPI) in long-run equilibrium will be:
A. $8 billion and 150. B. $12 billion and 200. C. $8 billion and 250. D. $8 billion and 200.
Which of the following is not a characteristic of an oligopolistic industry?
A) Substantial barriers to entry. B) The output produced by the firms in the industry may be homogeneous or differentiated. C) A small number of large firms. D) One dominant firm and low entry barriers.
A firm will shut down in the short run if
A. MR < AVC. B. MR > AVC. C. AVC < AFC. D. P > MC.
Consumption depends on:
A. total income. B. disposable income. C. pre-tax income. D. Consumption is unrelated to income.