If the cost of labor increases, the isocost line will A) stay the same. B) shift outward in parallel fashion. C) rotate inward around the point where only capital is employed in production. D) shift inward in parallel fashion. ANSWER C
Date: September 9th, 2020
If the isoquants are straight lines or L-shaped, then a cost-minimizing firm will A) not be able to minimize costs. B) find the lowest isocost line touching the relevant isoquant. C) find the highest isocost line touching the relevant isoquant. D) choose not to produce any output. ANSWER B
Date: September 9th, 2020
Economic growth can be depicted as A) a change in the country’s MRS. B) a change in the country’s MRT. C) a shift of the country’s production possibilities frontier to the right. D) a shift of the country’s production possibilities frontier to the left. ANSWER C
Date: September 9th, 2020
When the isocost line is tangent to the isoquant, then A) MPL = MPK. B) the firm is producing that level of output at minimum cost. C) the firm has achieved the right economies of scale. D) All of the above. ANSWER B
Date: September 9th, 2020
At a perfectly competitive equilibrium with production and trade, the slope of the production possibility curve will be A) equal to the slope of the price line faced by the consumers. B) steeper than the slope of the price line faced by consumers. C) flatter than the slope of the price line faced by consumers. […]
Date: September 9th, 2020
As more producers with differing marginal rates of transformation are added, the joint production possibility curve becomes A) steeper. B) flatter. C) more convex to the origin. D) smoother. ANSWER D
Date: September 9th, 2020
Suppose the marginal cost of a piece of candy is given by MCc = 2Qc and the marginal cost of a desk is MCd = 4 + 4Qd. The current production levels are 20 pieces of candy and 4 desks. The marginal rate of transformation (MRT) is A) MRT = -1. B) MRT = -2. […]
Date: September 9th, 2020
When the isocost line is tangent to the isoquant, then A) MRTS = -w/r. B) the firm is producing that level of output at minimum cost. C) the last dollar spent on capital yields as much extra output as the last dollar spent on labor. D) All of the above. ANSWER D
Date: September 9th, 2020
Economic growth can be depicted as a A) shift in the contract curve. B) a change in the dimensions of the Edgeworth box. C) a change in the preference curves of individuals. D) a change in the number of people in the Edgeworth box. ANSWER B
Date: September 9th, 2020
A two-good economy is in a competitive equilibrium. The price of a piece of candy is $2 and the price of a desk is $12. The marginal cost of candy is given by MCc = 2Qc and the marginal cost of a desk is MCd = 4 + 4Qd. The current production level of candy […]
Date: September 9th, 2020
