Marta lends money at a fixed interest rate and then inflation turns out to be higher than she had expected it to be. The real interest rate she earns is
a. higher than she had expected, and the real value of the loan is higher than she had expected.
b. higher than she had expected, and the real value of the loan is lower than she had expected.
c. lower than she had expected, and the real value of the loan is higher than she had expected.
d. lower then she had expected, and the real value of the loan is lower than she had expected.
d
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Refer to Table 4-3. The table above lists the marginal cost of polo shirts by Marko's, a firm that specializes in producing men's clothing. If the market price of Marko's polo shirts is $18
A) producer surplus will equal $22. B) Marko's will produce four shirts. C) there will be a surplus; as a result, the price will fall to $7. D) producer surplus from the first shirt is $18.
The law of diminishing marginal returns states
A) that at some point, adding more of a variable input to a given amount of a fixed input will cause the marginal product of the variable input to decline. B) that at some point, adding more of a fixed input to a given amount of variable inputs will cause the marginal product of the variable input to decline. C) that in the presence of a fixed factor, at some point average product of labor starts to fall as more and more variable inputs are added. D) average total costs of production initially fall and after some point starts to rise at a decreasing rate as output increases.
Suppose the production function for a certain device is q = L + K. If neutral technical change has occurred, which of the following could be the new production function?
A) q = L + 5K B) q = 5 ? (L + K) C) q = 5L + K D) All of the above are possible.
In a system of impersonal exchange,
a. bureaucratic ties on the production side are critical b. the economy benefits from specialization and modern technology c. inside connections on the consumption side are necessary d. successful institutional evolution makes no difference e. there is very little division of labor