Let the production function be q=ALaKb. The function exhibits constant returns to scale if
A) a + b = 1.
B) a + b > 1.
C) a + b < 1.
D) Cannot be determined with the information given.
A
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In general, the income effect of an increase in the price of a normal good:
A. will cause the individual to buy more of that good because they have relatively more income. B. will cause the individual to buy less of that good because they have relatively less income. C. will cause the individual to buy more of that good because they have relatively less income. D. will cause the individual to buy less of that good because they have relatively more income.
A rational decision maker will take only those actions for which the expected marginal benefit
a. is positive b. is at its maximum level c. is greater than or equal to the expected marginal cost d. is less than the expected marginal cost e. exactly equals the expected marginal cost
Which of the following CANNOT be eliminated in a growing economy such as the U.S. economy?
A) absolute poverty B) relative poverty C) both absolute and relative poverty D) Neither absolute nor relative poverty can be eliminated.
Refer to the information provided in Figure 31.2 below to answer the question(s) that follow.
Figure 31.2Refer to Figure 31.2. An economy that chooses to be at Point ________ can achieve higher economic growth rate in the future.
A. A B. B C. C D. D