A production function represents:
A. the relative costs of the inputs across various modes of production.
B. the relationship between the quantity of inputs and the quantity of outputs.
C. the relative values of the inputs and modes of production.
D. the relationship between the cost of the inputs and the revenue generated by the outputs.
Answer: B
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A natural barrier to entry is defined as a barrier that arises because of
A) technology that allows one firm to meet the entire market demand at lower average total cost than could two or more firms. B) patents or licenses that exclude others from producing a good or service. C) many firms producing the good and thereby allowing choice for all consumers. D) anticompetitive practices by a firm that keep other firms from producing. E) one firm owning a key natural resource.
Private parties may choose not to solve an externality problem if the transaction costs are large enough
a. True b. False Indicate whether the statement is true or false
Assume that banks do not hold excess reserves, all deposits remain in the banking system and that the required reserve ratio is 20%. If one bank obtains excess reserves of $10,000, then the maximum increase in money supply is
A) $10,000. B) $20,000. C) $40,000. D) $50,000.
If the price of beef rose and the demand for chicken increased, then beef and chicken are:
a. Substitute goods b. Consumer goods c. Inferior goods d. Complementary goods