When the exponents of a Cobb-Douglas production function sum to more than 1, the function exhibits
A) constant returns.
B) increasing returns.
C) decreasing returns.
D) either increasing or decreasing returns.
B
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If the consumption function is C = 25 + 0.9y and income increases by $100, then savings will increase by
A) $10. B) $25. C) $90. D) $115.
The Marshall-Lerner condition holds that a country's current account balance will ________ in response to a real ________ in a nation's currency if ________
A) improve; depreciation; sum of the price elasticities of export and import demand exceeds 1 B) worsen; depreciation; sum of the price elasticities of export and import demand exceeds 1 C) improve; appreciation; sum of the price elasticities of export and import demand exceeds 1 D) improve; appreciation; sum of the price elasticities of export and import demand exceeds 0 E) worsen; depreciation; sum of the price elasticities of export and import demand exceeds 0
Suppose the tax on automobile tires is increased so that the tax goes from being a "medium" tax to being a "large" tax. As a result, it is likely that
a. tax revenue increases, and the deadweight loss increases. b. tax revenue increases, and the deadweight loss decreases. c. tax revenue decreases, and the deadweight loss increases. d. tax revenue decreases, and the deadweight loss decreases.
Which of the following practices are, at least in part, attempts to reduce moral hazard problems?
a. Parking ramps require customers to take a ticket with the time stamped on it from a machine in order to gain entrance. b. Factory workers are paid by the hour. c. A restaurant owner works long hours in order to make more profit. d. None of the above are correct.