Refer to Cost of Production. By comparing the two points on the expansion path, we can conclude that this technology exhibits
The following questions refer to the diagram below. The wage rate is assumed to be $12 per hour, the rental rate is assumed to be $6 per hour, and capital is assumed to be fixed in the short run at 10 hours.
a. decreasing returns to scale.
b. constant returns to scale.
c. increasing returns to scale.
d. zero returns to scale.
a. decreasing returns to scale.
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What do structural reform policies emphasize?
What will be an ideal response?
Refer to above figure. Would you expect to find that the real wages become equalized in both countries? Explain the reason for any differences you note
What will be an ideal response?
If exports rose and imports fell, a. AD would decrease
b. AD would increase. c. AD would be unaffected. d. AD could either increase or decrease.
The marginal propensity to consume is
a) identical to the average propensity to consume b) the inverse of the marginal propensity to save c) the slope of the consumption function d) the inverse of the expenditure multiplier e) equal to the income tax rate