Graphically, what happens to the production function if a firm uses automation to raise the amount of output per worker? Explain
What will be an ideal response?
The production function is the relationship between inputs and maximum physical output. If automation raises the productivity of workers, then the production function will rotate upward so that higher output corresponds to a given level of labor input.
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You live in a world where the marginal rate of substitution of food for clothing is two and the price ratio between food and clothing is one. Your world also has labor and capital that has marginal products respectively of two and five. The price of capital is ten and the price of labor is 8. Finally, your world can transform two units of food into one unit of clothing or vice versa. Assuming that all the conditions of general equilibrium are present, what will happen in the various sectors of the economy to bring about general equilibrium?
What will be an ideal response?
Which of the following is NOT an economic function of the U.S. government?
A. promoting price stability B. encouraging production of government-inhibited goods C. promoting competition D. providing public goods
From Table 2.1, and under the most likely scenario where columns A and B are assigned to represent quantity demanded and quantity supplied, which is the equilibrium quantity?
A. 1 unit B. 2 units C. 3 units D. 4 units
What is the only policy instrument the Fed really can control directly and precisely?
A) short-term interest rates B) the money supply C) high-powered money D) corporate tax rates