In an increasing cost industry, an unexpected decrease in demand would lead to ____ costs and a ____ price in the long run?
a. higher; higher.
b. higher; lower
c. lower; lower.
d. lower; higher.
c
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Which of the following statements is/are correct?
I. Depository institution managers undertake riskier actions than they otherwise would because of the existence of deposit insurance. II. Because of the existence of deposit insurance, depositors in savings and loans and other banks have little incentive to investigate the financial stability of these institutions. A) I only B) II only C) both I and II D) neither I nor II
Suppose a firm uses labor and capital to produce output. The last unit of labor hired has a marginal product of 12 units of output, and the last unit of capital employed has a marginal product of 20 units
Use the optimal combination of inputs rule to calculate the price of capital if the price of labor is $6 per unit. The price of capital is A) $2. B) $10. C) $20. D) impossible to determine with the information given.
A labor intensive production process is one in which:
A. a lot of labor is hired relative to the total inputs needed to produce the good. B. highly skilled labor is needed to produce the good. C. a part of the production process must be done by labor and cannot be substituted. D. total costs will be minimized if labor is the primary factor of production used.
When changes to taxes and spending occur in the economy without explicit action by the federal government, such policy is:
A. variable. B. discretionary. C. nondiscretionary. D. cyclical.