Suppose that the production function for the economy is: Y = AK1/4L3/4. Assume that A = 1,000, the capital stock is $32,000 billion, and the labor force is 120 million (or 0.120 billion) workers. The value of the marginal product of labor is
A) $14,290.17.
B) $17,043.29.
C) $20,451.95.
D) $22,724.33.
B
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The equilibrium exchange rate is 0.70 euros per dollar. At this exchange rate, the quantity demanded equals the quantity supplied and is $1.3 trillion a day. If the exchange rate is now 0.60 euros per dollar, then
A) there is a shortage of dollars and the exchange rate rises. B) there is a shortage of dollars and the exchange rate falls. C) there is a surplus of dollars and the exchange rate rises. D) there is a surplus of dollars and the exchange rate falls. E) there is no change.
Suppose the supply of capital decreases. As a result, the quantity of capital used in production and the rental price of capital will both fall
a. True b. False Indicate whether the statement is true or false
In discussing trade, it is ____ that matters rather than ____.
A. absolute advantage; elastic advantage B. comparative advantage; absolute advantage C. entire advantage; comparative advantage D. elastic advantage; entire advantage E. declarative advantage; absolute advantage
Figure 7-10
depicts a demand curve with a price elasticity that is
a.
unitary, implying that a percent change in price leads to an equal percent change in quantity demanded.
b.
perfectly inelastic, implying that the same amount will be purchased regardless of the price of the good.
c.
equal to zero.
d.
both b and c.