An increase in the price of a resource would cause
a. producers to substitute other inputs for the resource.
b. consumers to increase consumption of the goods that increase in price as the result of the higher resource price.
c. an increase in the demand for products that use the resource intensely.
d. a reduction in the price of goods produced with the resource.
A
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When the isocost line is tangent to the isoquant, then
A) MRTS = -w/r. B) the firm is producing that level of output at minimum cost. C) the last dollar spent on capital yields as much extra output as the last dollar spent on labor. D) All of the above.
Which of the following causes a leftward shift in the short-run aggregate supply curve? a. An increase of goods prices while nominal incomes are unchanged
b. An increase in nominal incomes. c. An increase of full-employment real GDP. d. An increase of personal consumption expenditures while the price level is unchanged. e. An increase of personal consumption expenditures while full-employment real GDP is unchanged.
A natural monopoly is defined as an industry in which one firm
a. can produce the entire industry output at a lower average cost than a larger number of firms could. b. can produce the entire industry output at a lower marginal cost than a larger number of firms could. c. is very large relative to other firms that could enter the industry. d. can earn higher profits if it is the only firm in the industry rather than if other firms also enter the industry.
How does the original, simplified Keynesian model compare with modern Keynesian analysis?
A. In both cases, the short-run aggregate supply curve (SRAS) is horizontal. B. The original Keynesian model assumed price flexibility whereas the modern analysis does not. C. Modern analysis shows an upward sloping SRAS to reflect some price flexibility. The original Keynesian model's SRAS is horizontal and assumes sticky prices. D. all of these