Suppose that the price of a jar of peanut butter is $5 and the price of a jar of jelly is $3. What is the relative price of a jar of peanut butter?
A) 2.400
B) 0.417
C) 0.250
D) 1.667
Ans: D) 1.667
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Answer the following statement(s) true (T) or false (F)
1. All baskets of labor and capital capable of producing a given level of output are technologically efficient. 2. The Marginal Rate of Technical Substitution can be expressed as the ratio of the Marginal Productivities of Labor and Capital. 3. Output is held fixed along an isocost. 4. Moving down and to the right on an isoquant tells us how much quantity increases as inputs increase. 5. Like a family, a firm faces a fixed level of expenditure and therefore must choose one point along a particular isocost line.
Suppose the current equilibrium real wage is $15 an hour. Which of the following is true?
a. A real wage above $15 an hour would lead to an excess demand for labor b. A real wage above $15 an hour would lead to an excess supply of labor c. The real wage must fall to prevent unemployment d. The real wage must rise to prevent unemployment e. A real wage below $15 an hour would lead to an excess supply of labor
David Ricardo was the author of the 1817 book Principles of Political Economy and Taxation
a. True b. False Indicate whether the statement is true or false
Output (Q)Total Fixed CostTotal Variable Cost020012052207320104201552021Table 9.1Table 9.1 shows the cost structure of a firm in a perfectly competitive market. If the market price is $5:
A. the firm suffers a loss but is better off producing at the output where MR = MC. B. the firm suffers a loss and is better off shutting down. C. the market price is lower than its marginal cost at the profit maximizing output level. D. the market price is lower than the average variable cost at the profit maximizing output level.