A firm is currently operating where the MC of the last unit produced = $84, and the MR of this unit = $70. What would you advise this firm to do?
A. Shut down.
B. Increase output.
C. Stay at its current output.
D. Decrease output.
Answer: D
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In the Cobb-Douglas production function, the index of the overall level of efficiency of transforming capital and labor into real GDP is called
A) total factor productivity. B) allocative efficiency. C) the marginal efficiency index. D) the transformation allocation of inputs.
Keynesians
A. believe capitalism is inherently stable. B. believe the markets in a capitalistic economy are highly competitive. C. argue against the use of discretionary monetary policy. D. contend that government intervention in the economy is desirable.
Economists are often perceived as disagreeing with each other. Is this the way things really are?
A. No, economists agree on much more than is commonly supposed. B. No, the problem is that some economists are smarter than others. C. No, economists “stage” disagreements for public amusement. D. Yes, economists rarely agree on much of anything. E. Yes, economists are unable to analyze problems dispassionately.
In the table above, Y is measured along the y-axis and X along the x-axis. The slope between points c and d is
A) 100. B) 0. C) 0.25. D) -4.