The aggregate production function is an equation that shows the relationship between ________ and ________
A) the inputs employed by firms; the maximum output firms can produce with those inputs
B) the inputs employed by an individual firm in an economy; the average of the inputs employed by all firms in an economy
C) the output produced by an individual firm in an economy; the average of the output produced by all firms in an economy
D) the average level of capital used in production in an economy; the average level of labor used in production in an economy
A
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If quantity demanded is greater at each price, we say that there has been
A. an increase in supply. B. an increase in demand. C. a decrease in supply. D. a decrease in demand.
Under rate-of-return regulation, average cost pricing
A) is inflated so the firm can make economic profits. B) includes variable costs but not a cost for capital. C) includes what they consider to be a fair rate of return on investment. D) includes a cost for capital that generates an above normal rate of return.
If a perfectly competitive firm has economic profits greater than zero, then we know that
A. the firm is producing at the bottom of the average total cost curve. B. the firm's industry is not in long-run equilibrium. C. the firm's industry is in long-run equilibrium. D. the firm will reduce output.
Suppose that private saving is $1590 billion, investment is $1945 billion, and the current account balance is -$489 billion. From the uses-of-saving identity, how much is government saving?
A. -$134 billion B. $134 billion C. -$844 billion D. $844 billion