Refer to the following graph. The price of capital (r) is $20.
At the optimal combination of inputs for producing 14,000 units of output, what is the marginal rate of technical substitution?
A. 0.80
B. 2.5
C. 1.5
D. 0.67
E. impossible to tell from the graph
Answer: C
You might also like to view...
If a consumer buys less gasoline because gas prices increased by 100 percent, even though all other prices have also increased by 100 percent, then
A) the consumer is paying too close attention to changes in relative prices. B) wages and prices are too flexible. C) the consumer has been fooled by money illusion. D) inflation is not a problem in the economy.
Monetary policy produces ripple effects, some of which happen quickly and some that can take years to produce change. Which of the following takes the longest to change?
A. Inflation rate B. Monetary policy rate C. Exchange rate D. Monetary base
The use of technology such as telephones and computers means that money exchanges and other financial transactions can be _____.
(A) Based on U.S. dollars all over the world. (B) Made instantaneously. (C) Converted to prices in any currency. (D) Sensitive to variations in any currency.
Suppose an economy is initially in long-run equilibrium, and it then experiences a supply shock in the form of exceptionally high energy prices. Which of these will be true in this economy?
What will be an ideal response?