Suppose that the price of capital is $10 per unit and the price of labor is $8 per unit. Write an equation for an isocost line using this information. What would be the slope of this isocost line?
What will be an ideal response?
The equation for the isocost line would be (10 ? K) + (8 ? L) = TC. The slope of the isocost line would be (-PL/PK) or -8/10.
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Banks can continue to make loans until their
A) actual reserves equal their excess reserves. B) excess reserves equal their required reserves. C) actual reserves equal their required reserves. D) actual reserves equal their checking account balances.
All of the following are true regarding a shareholder's diversified stock portfolio except which one?
A) The portfolio will contain stocks from a variety of companies. B) The portfolio will contain the stock of just one company. C) The diversified portfolio reduces the risk faced by the shareholders. D) The shareholder has balanced the risk of bad outcomes with positive outcomes.
According to economist Joseph Schumpeter, technological advance is more likely to occur in a monopoly than in perfect competition
Indicate whether the statement is true or false
The reserve requirement:
A. Is the most frequently used tool by the Fed. B. Changes required reserves but not excess reserves. C. Does not affect the lending capacity for a bank. D. Affects the level of bank reserves.