If the government cuts taxes, then it has undertaken:
A. both a policy change and a regime change.
B. a policy change.
C. a regime change.
D. neither a policy change nor a regime change.
Answer: B
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Suppose that you are given a cost function c(w,r,x)=2w1/2r1/2x3/2 where w is the wage rate for labor, r is the rental rate of capital and x is the output level. a. Does the production process that gives rise to this cost function have increasing, decreasing or constant returns to scale? b. Derive the marginal cost function. c. Calculate the supply function for the firm - i.e. the function that tells us for every combination of input and output prices, how much the firm will optimally produce. How does output by the firm change as input and output prices change? d. If the cost function had been c(w,r,x)=2w1/2r1/2x1/2 instead, how would your answer to (c) change? How can that make any sense?
What will be an ideal response?
A(n) ________ in private expenditures as a result of a(n) ________ in government purchases is called crowding out
A) increase; increase B) decrease; decrease C) decrease; increase D) increase; decrease
Define the terms of trade
What will be an ideal response?
As the number of concrete workers in the United States falls, the wage paid to the remaining concrete workers will necessarily fall as well
a. True b. False Indicate whether the statement is true or false