Does this production function, q = 10L0.5K0.3, experience increasing, decreasing or constant returns to scale?
A) Decreasing because a 100% increase in inputs increases outputs by 80%.
B) Increasing because an 80% increase in inputs increases outputs by 100%.
C) Decreasing because 0.5 + 0.3 < 1.
D) A and C.
D
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Selling baked goods out of your home or apartment is illegal in Wisconsin and New Jersey. In these states, baked goods must be prepared in commercial kitchens that are subject to state inspection if they are to be sold to the public. For home bakers in
these two states, they barrier to entry they face is A) due to economies of scale. B) due to ownership of a key resource. C) government imposed. D) self imposed.
The higher the expected rate of inflation,
A) the lower is the nominal rate of interest. B) the higher is the real rate of interest. C) the higher is the nominal rate of interest. D) the higher the real and nominal rates of interest.
The question of whether the government should intervene at all in economic matters is entirely political
a. True b. False Indicate whether the statement is true or false
For which of the following goods is the income elasticity of demand likely highest?
a. natural gas b. doctor's visits c. hamburgers d. boats