Suppose a consumer's MRS is given by the formula MRSPT = T/P, where P stands for the number of pieces of pizza and T stands for the number of tacos. Starting at 12 tacos and 4 pizzas, the consumer must receive:
A. 3 tacos to compensate them for the loss of one piece of pizza.
B. 3 pieces of pizza to compensate them for the loss of one taco.
C. 1/3 taco to compensate them for the loss of one piece of pizza.
D. 1/3 piece of pizza to compensate them for the loss of one taco.
A. 3 tacos to compensate them for the loss of one piece of pizza.
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The long-run aggregate supply curve
a. is vertical b. is upward sloping c. is downward sloping d. is horizontal e. can have a variety of shapes depending on fiscal policy
Fixed cost is sometimes referred to as
A. sunk cost. B. variable cost. C. total cost. D. economic cost.
The point of tangency between an isocost line and an isoquant is necessarily
A. the profit-maximizing combination of inputs that should be hired to produce that output level. B. the least costly combination of inputs that can be hired to produce the output level. C. the minimum amount of output that can be attained for that level of expenditure. D. both the profit-maximizing and least costly combination of inputs that can be used to produce the output level.
Explain the relationship among the capital stock, gross investment, net investment, and depreciation
What will be an ideal response?