Suppose labor and capitals are both used to produce output. In the long run, if the wage rate rises while the rental rate on capital remains unchanged,
A. market forces will come into play to bring the prices back to their earlier relationship.
B. the process will become more capital intensive.
C. the marginal product of capital will rise and the marginal product of labor will fall.
D. the process will become more labor intensive.
Answer: B
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The marginal cost curve intersects the:
A. average variable cost curve at its minimum point. B. total cost curve at its minimum point. C. average fixed cost curve at its minimum point. D. variable cost curve at its minimum point.
The marginal product is the slope of the:
a. marginal cost curve. b. total cost curve. c. total product curve. d. long-run average total cost curve
Because contractionary fiscal policy raises domestic interest rates, it can be used to fix the value of the domestic currency above the market equilibrium rate.
Answer the following statement true (T) or false (F)
Suppose that the government sets a maximum price for milk at $5 a gallon and the equilibrium price of a gallon is $3. How much quantity traded will this maximum price lead to?
A. the equilibrium quantity B. below the equilibrium quantity C. above the equilibrium quantity D. There is not sufficient information.