Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, Point E necessarily represents
A. an impossible production point.
B. overallocation of resources.
C. only motorcycles being produced.
D. technological advancement.
Answer: C
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As more labor is hired, moving along the production function, diminishing returns occur because
A) workers are overworked and so their productivity decreases. B) the wage rate paid is too low and so workers decrease their work effort. C) there are fixed quantities of other resources. D) the real wage rate must increase in order to hire additional workers. E) real GDP increases more rapidly the more workers are hired.
Technological change allows perfectly competitive firms to ________ and leads to ________
A) lower their costs; lower prices for consumers B) raise their prices; higher prices for consumers C) lower their costs; higher prices so the firms can earn economic profits in the long run D) raise their costs; higher prices and maximum profits in the long run E) lower their costs; deadweight loss
If the average productivity of American firms is rising more quickly than the average productivity of Indian firms, which of the following would you expect to see? (India's currency is the rupee.)
A) an increase in the value of the rupee relative to the dollar B) a decrease in the quantity demanded of Indian products relative to American products C) a decrease in the prices of Indian products D) an increase in the quantity demanded of Indian products relative to American products
Refer to Table 5.4. If outcomes 1 and 2 are equally likely at Job A, then in absolute value
A) W = X = $10. B) W = X = $20. C) W = Y = $100. D) W = Y = $200. E) W = Y = $300.