A short-run production function assumes that
A. at least one input is a fixed input.
B. the level of output is fixed.
C. all inputs are fixed inputs.
D. both a and b
E. both b and c
Answer: A
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Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD1 the result in the long run would be:
A. P4 and Y1. B. P4 and Y2. C. P5 and Y1. D. P5 and Y2.
A production possibilities curve that is a straight line represents the case of
A) constant costs. B) increasing costs. C) decreasing costs. D) constant opportunity costs but increasing real costs. E) constant opportunity costs but decreasing real costs.
"As the price of apples goes up, the demand for apples goes down." The author of this statement
A) implies that price and demand are unrelated. B) uses the word "demand" when he should use the word "supply." C) uses the word "demand" when he should use the words "quantity demanded." D) implies that demand and price have a direct relationship.
Which of the following pairs is the most likely to exhibit an inverse relationship?
A. The amount of time you study and your grade point average. B. People's annual income and their expenditure on personal computers. C. Baseball players' salaries and their batting averages. D. The price of a concert and the number of tickets people purchase.