When a production function is graphed with Real GDP on the vertical axis and labor on the horizontal axis, a rise in labor ________________________, and a rise in capital __________________
A) shifts the production function upward; also shifts the production function upward
B) shifts the production function downward; shifts the production function upward
C) moves us up along a given production function; shifts the production function upward
D) shifts the production function upward; moves us up along a given production function
C
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A monopolistically competitive market is described as one in which there are
A) a large number of firms selling similar, but not identical, products. B) one large firm and many small firms producing identical products. C) a few firms producing an identical product. D) a few firms producing differentiated products.
Assuming that the average duration of its assets is four years, while the average duration of its liabilities is three years, then a 5 percentage point increase in interest rates will cause the net worth of First National to ________ by ________ of
the total original asset value. A) decline; 5 percent B) decline; 10 percent C) decline; 15 percent D) increase; 20 percent
Refer to Figure 3.2. At any consumption bundle with the quantity of good X exceeding the quantity of good Y (that is, a bundle located below the 45 degree line, like point A), Alvin's marginal rate of substitution of good X for good Y is
A) diminishing. B) positive. C) constant and positive. D) zero.
Scarcity implies that people must
A) be miserable. B) be selfish. C) make choices. D) not be selfish.