Actual output will always equal the limit described in the production function.
Answer the following statement true (T) or false (F)
False
The purpose of a production function is to tell us how much output we can produce with varying amounts of factor inputs, not necessarily how much we actually produce.
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A consumer's demand for CDs can be represented by a line with slope -b and intercept a. If the current price of CDs is $P, then the ratio of consumer surplus to total expenditures on CDs equals
A) (a - P)(a - bP). B) 1/2(a - P)(a - bP). C) D(a - bP). D) (a - P)/P. E) (a/b - P)/(2P).
Prices communicate information about relative availability of products. For example, a decrease in the price of corn signals to consumers and producers that: a. consumers are buying more corn than before
b. corn is relatively more abundant than before. c. corn is relatively less abundant than before. d. consumers are stocking up on corn because of the predictions of a cold winter.
Which of the following is most likely to result from a rising household debt/income ratio?
a. Household income will rise rapidly. b. Household consumption will fall as a share of income. c. Households will be in a better position to deal with unexpected events that force major adjustments. d. A larger share of household income will be required to meet interest payments on debt.
If a supply curve is perfectly horizontal, what is the value of the price elasticity of supply?