Isoquants are convex to the origin due to: A) the law of diminishing marginal utility. B) the assumption of the diminishing marginal productivity of each input. C) the fact that as less capital is used, its marginal productivity falls. D) the fact that as more labor is used, its marginal productivity rises. ANSWER B
Date: September 10th, 2020
The marginal rate of technical substitution (MRTS) along an isoquant: A) is equal to the price ratio at all points along an isoquant. B) is equal to the ratio of the marginal utilities of the two goods. C) is equal to the ratio of the marginal products of the two inputs. D) remains constant as […]
Date: September 10th, 2020
The intercept term of the linear investment function measures: A) induced investment expenditures. B) autonomous investment expenditures. C) income. D) none of the above. ANSWER B
Date: September 10th, 2020
Observations of consumer behavior suggest that when the price of gasoline rose above $3.50 per gallon, consumer demand for gas became considerably more price elastic. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
The price elasticity of demand is measured as the percentage change in quantity demanded divided by the percentage change in price. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Which of the following statements about production isoquants is correct? A) They show all the combinations of two inputs that result in the same level of output. B) They are usually concave to the origin. C) They show all the combinations of two inputs that yield the same cost of production. D) They represent lower […]
Date: September 10th, 2020
From the airlines’ perspective, amenities competition is preferable to price competition because revenues are not adversely affected and it is easier to determine the strategies of one’s competitors. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
It is reasonable to expect that if one firm in an oligopolistic market raises price, the its competitors will do the same so that all firms can earn increased revenues. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
All of the following are non-price factors that influence demand except: A) tastes and preferences. B) quantity supplied. C) income. D) the prices of related goods. ANSWER B
Date: September 10th, 2020
According to the case for analysis (Demand and Supply in the Copper Industry) in the text, all of the following can lead to a decline in the price of copper except: A) steady production uninterrupted by labor strikes or natural disasters. B) substitution away from copper to other materials such as aluminum and plastic. C) […]
Date: September 10th, 2020
