A firm produces output according to the production function, q = L4/3K1/2 and faces input prices equal to w = $20 and r = $80. What is the minimum cost of producing 1140 units of output?
A) Cost = $780
B) Cost = $694
C) Cost = $2,071
D) Not enough information is given to answer this problem.
B
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Households receive transfers from ________ and firms receive transfers from ________
A) government; government B) firms; households C) government; government and households D) firms and government; government E) government; no one
For each of the following values of nominal GDP and real GDP, calculate the GDP price deflator
a) Nominal GDP = $600; real GDP = $800. b) Nominal GDP = $900; real GDP = $900. c) Nominal GDP = $1,200; real GDP = $1,000
The cross price elasticity of demand between two goods is 2. We may conclude that
A) the two goods are very complementary and probably are sold together. B) the two goods are poor substitutes for each other. C) the demand for one of the goods is likely to be fairly elastic and the demand for the other good is likely to be fairly inelastic. D) the demand for each of the goods is likely to be very elastic.
When demand is unit elastic, a change in price causes total revenue to stay the same because
A) the percentage change in quantity demanded exactly offsets the percentage change in price. B) buyers are buying the same quantity. C) total revenue never changes with price changes. D) the change in profit is offset by the change in production cost.