For most firms, the short run is a one-year period.
Answer the following statement true (T) or false (F)
False
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Assume a firm is producing 1000 units of a good by using two inputs, capital and labor, whose per unit prices are $50 and $20
Assume also that the marginal physical product of the last unit of capital is 25 and the marginal physical product of the last unit of labor is 15. In order to minimize its costs of production, the firm should adjust its combination of inputs by employing more labor and less capital. Indicate whether the statement is true or false
In 1998, Japan decided to make the Bank of Japan, its central bank,
A. more independent. B. more concerned with fighting inflation. C. subject to direct control by the Japanese prime minister. D. subject to direct control by the Diet, the Japanese parliament.
An MPC value of less than 1.0 indicates that as income increases:
A. Consumption also increases, and by more than the increase in income B. Consumption also increases, and at the same rate as the increase in income C. Consumption will go in the opposite direction and decrease D. Consumption also increases, though not as much as income
If the bidders at a second-price auction have true values of $78, $72, $66, and $65, the item will sell for
a. $78 b. just under $78 c. $72 d. just over $72