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
What is one reason “micro-managers” might be less successful than so-called “delegators”? A) Delegators are smarter. B) Delegators enjoy increasing returns to scale. C) Micro-managers suffer decreasing returns to scale. D) Micro-managers have constant returns to scale. ANSWER C
Date: September 9th, 2020
Suppose the production of mp3 players can be represented by the following production function: q = L0.4K0.4. The firm currently produces q1 units. If all inputs doubled, the new level of output will equal A) 20.4 q1. B) 20.8 q1. C) 0.8 q1. D) 1.6 q1. ANSWER B
Date: September 9th, 2020
A firm is currently producing 100 widgets using 4 units of labor and 12 units of capital. The firm’s production function exhibits constant returns to scale. How many units of labor and capital are needed to produce 350 widgets? A) L = 14; K = 42 B) L = 15; K = 45 C) L […]
Date: September 9th, 2020
In the Primary Metals industry, it is estimated that the elasticity of output with respect to labor is 0.51 and the elasticity of output with respect to capital is 0.73. These two measures indicate that the primary metals industry is characterized by A) decreasing returns to scale. B) constant returns to scale. C) increasing returns […]
Date: September 9th, 2020
Does this production function, q = 10L0.5K0.3, experience increasing, decreasing or constant returns to scale? A) Decreasing because a 100% increase in inputs increases outputs by 80%. B) Increasing because an 80% increase in inputs increases outputs by 100%. C) Decreasing because 0.5 + 0.3 < 1. D) A and C. ANSWER D
Date: September 9th, 2020
A firm can experience increasing, constant and decreasing returns to scale for various levels of output. Indicate whether the statement is true or false ANSWER True . As output increases a firm can experience all types of returns to scale.
Date: September 9th, 2020
In the food and kindred products industry, it is estimated that the elasticity of output with respect to labor is 0.43 and the elasticity of output with respect to capital is 0.48. These two measures indicate that the primary metals industry is characterized by A) decreasing returns to scale. B) constant returns to scale. C) […]
Date: September 9th, 2020
