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
Suppose the production function for a certain device is q = L + 2K. If a neutral technical change has occurred, which of the following could be the new production function? A) q = L + 5K B) q = 5 (L + K) C) q = 2L + 4K D) All of the […]
Date: September 9th, 2020
A general equilibrium analysis of a price change in the corn chip market would include an investigation of the impacts in A) the television market. B) the coffee market. C) the salsa market. D) All of the above. ANSWER C
Date: September 9th, 2020
Dell computers has increased production efficiency by A) producing output with fewer inputs. B) expanding the amount of inputs used. C) outsourcing production. D) relying on decreasing returns to scale. ANSWER A
Date: September 9th, 2020
If a technological change occurs such that the production function shifts from q = 10K0.5 L0.5 to q = 10.5K0.3 L0.5, then the technological change is A) both neutral and non-neutral. B) neutral. C) non-neutral. D) Not enough information given. ANSWER A
Date: September 9th, 2020
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
