Suppose firms A and B each make T-shirts. Firm A’s production function is q = L0.5K0.5. Firm B’s production function is q = 1.2 L0.5K0.5. If the two firms each hire the same amounts of capital and labor, compare the two firms in terms of APL and MPL. What will be an ideal response? […]
Date: September 9th, 2020
The implementation of the assembly line is an example of how A) changes in the organization of production improve productivity. B) neutral technical change improves productivity. C) non-neutral technical change can decrease productivity. D) labor saving technical change increases economy-wide unemployment. ANSWER A
Date: September 9th, 2020
Technical and organizational change A) typically reduces prices by increasing the supply of the product, ceteris paribus. B) typically reduces prices by decreasing the demand for the product, ceteris paribus. C) typically increases prices by increasing the demand for the product, ceteris paribus. D) typically increases prices by decreasing the supply for the product, ceteris […]
Date: September 9th, 2020
The cost of waiting two months for health care to address a debilitating problem in Canada is most accurately described as A) an explicit cost. B) an accounting cost. C) no real cost. D) an opportunity cost. ANSWER D
Date: September 9th, 2020
Economic efficiency entails A) producing a given amount of output with the most expensive mix of inputs. B) producing a given amount of output with the least number of inputs. C) producing a given amount of output with the most inputs. D) producing a given amount of output with the cheapest mix of inputs. […]
Date: September 9th, 2020
The general equilibrium analysis of a minimum wage applied to only some sectors of the economy suggests that A) workers in all sectors will face increased wages. B) some workers in the covered sectors will lose their jobs and remain unemployed. C) some workers originally employed in the covered sectors will move to the uncovered […]
Date: September 9th, 2020
General equilibrium analysis is the study of A) how an equilibrium is determined in all markets simultaneously. B) how an equilibrium is determined in all closely related markets. C) the effects of a change in a market, and all spillover effects in all related markets. D) Any of the above. ANSWER D
Date: September 9th, 2020
Non-neutral technological change is more valuable to labor than neutral technological change. Indicate whether the statement is true or false ANSWER True . Neutral technological change leaves the proportion in which inputs are used (for example, the labor/capital ratio) unchanged, but non-neutral technological changes are innovations that alter the labor/capital ratio. The labor/capital ratio […]
Date: September 9th, 2020
As opposed to general equilibrium analysis, partial equilibrium analysis looks A) at an equilibrium and changes to it in a single, isolated market. B) at how changes in all other markets effect a particular market. C) at how equilibrium is determined in all markets simultaneously. D) at either price or quantity movements. ANSWER A […]
Date: September 9th, 2020
Johnny has worked as a CPA for five years and wants to open his own public accounting practice. The cost of his college degree in accounting represents A) the opportunity cost of this endeavor. B) a sunk cost. C) an expense. D) a variable cost. ANSWER B
Date: September 9th, 2020
