Graphically, all else constant, a decrease in the price of labor would be illustrated by: A) a parallel shift of the isocost line in toward the origin. B) rotating the isocost line away from the origin along the labor axis. C) a parallel shift of the isocost line away from the origin. D) rotating the […]
Date: September 10th, 2020
Assuming demand is inelastic, if a firm wants to increase its total revenue, it should raise price. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
The change in import spending due to a change in domestic real income is called: A) marginal propensity to save. B) marginal propensity to consume. C) marginal propensity to import. D) none of the above. ANSWER C
Date: September 10th, 2020
All else constant, an increase in the price of labor would cause the total amount of output that can be produced with a fixed amount of spending to ________. This would result in a movement to a ________ isoquant. A) increase; lower B) increase; higher C) decrease; lower D) decrease; higher ANSWER C
Date: September 10th, 2020
The kinked demand curve model is based on the assumption that firms’ pricing decisions are independent of one another because demand is determined by non-market forces. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Assume the demand function for good X can be written as Qd = 80 – 3Px + 2Py + 10I, where Px = the price of X, Py = the price of good Y, and I = Consumer income. According to this equation: A) a rise in the price of Y would cause the demand […]
Date: September 10th, 2020
An increase in the number of buyers in the market for LED TVs would cause the market demand curve for LED TVs to: A) shift right. B) shift left. C) stay the same because market demand doesn’t depend on the number of buyers. D) shift left or right depending on whether the new buyers purchase […]
Date: September 10th, 2020
The role of the currency exchange rate is embedded in the import expenditure equation as: A) autonomous import spending. B) marginal propensity to import. C) autonomous export spending. D) none of the above. ANSWER A
Date: September 10th, 2020
Assume a firm produces 500 units of a good by using two inputs, capital and labor, whose per unit prices are $10 and $4. Assume also that the marginal physical product of the last unit of capital is 30 and the marginal physical product of the last unit of labor is 10. Is this firm […]
Date: September 10th, 2020
According to the kinked demand curve model, regardless of whether a firm increases or decreases price, its total revenues will decrease as a result of the price change. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
