Which of the following profit functions exhibits a Cobb-Douglas production function?
A. ? = P × min(2L, 5K) ? 20L ? 35K
B. ? = P × (3K + 4L) ? 20L ? 35K
C. ? = P × K0.75L0.50 ? 20L ? 35K
D. ? = P × (3K0.5 + 4L0.5) 1/0.2 ? 20L ? 35K
Answer: C
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"I know that my vote alone will not influence whether or not any new foreign trade legislation is enacted, so I have decided not to spend the time learning about various legislative proposals." This quote reflects an example of
A) the free-rider problem. B) government failure. C) rational ignorance. D) voter inefficiency.
Which of the following will not cause the aggregate supply curve to fall?
a. A decrease in the nation's average price level (i.e., the implicit price index). b. An increase in input prices. c. A decrease in the value of the domestic currency. d. Natural disasters. e. None of these answers is correct.
Refer to the accompanying figure. If the price rises from $10 to $14, what will happen to the price elasticity of supply?
A. It decreases. B. It increases. C. It stays the same. D. This cannot be determined from the information provided.
Economic growth will NOT result in deflation if aggregate demand shifts
A. inward to the left as aggregate supply shifts outward to the right. B. outward to the right as aggregate supply shifts inward to the left. C. inward to the left at the same speed as aggregate supply. D. outward to the right at the same speed as aggregate supply.