Homework Answers
Option A.
If a firm adopts a technology that can increase production without increasing labour or other resource inputs, then it will reach a point that is previous unattainable.
Technological advancements allow firms to increase production to a greater extent than they could if only labour was used.
When firms adopt new technology, then the firms output per unit of labour increases.
This allows the firms to reach a new point which was previously unattainable.
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If a firm adopts a technology that can increase production without increasing labor or other resource...
1. A firm negotiates a new labor contract with a higher average hourly wage. What is...
1. A firm negotiates a new labor contract with a higher average hourly wage. What is the most likely effect of the higher wage on the firm's price and output? a) Neither price nor output will be affected. b) Price will increase but output will not change. c) Both price and output will increase. d) Price will not change but output will decrease. e) Price will increase and output will decrease. 2. Other factors constant, a change in will cause...
17. Match the statement affecting the production possibility curve with its graphical representation: New technology affecting...
17. Match the statement affecting the production possibility curve with its graphical representation: New technology affecting both industries A. inward shift of the curve B. a movement along the curve C. outward shift of the curve D. A rotation of the curve E. Point outside the curve F. point inside the curve 18. Match the statement affecting the production possibility curve with its graphical representation: An increase in consumer spending on one good but no change in consumer's income A....
Consider a textile manufacturing firm that uses labor and capital inputs and has the production technology...
Consider a textile manufacturing firm that uses labor and capital inputs and has the production technology given by the equation Q = 8K0.25L 0.5 , where Q is output, K is capital and L is labor. Each unit of capital costs 10 TL while each unit of labor costs 5 TL. a) Does this firm have increasing, decreasing or constant returns to scale? (1) b) Define the cost minimization problem faced by firm. What is the objective function, what is...
Scenario: Country X and Country Y production amount of physical capital stock available to each country is also equal. However, the labor supply for Country X is Ho while the labor supply for Cou...
Scenario: Country X and Country Y production amount of physical capital stock available to each country is also equal. However, the labor supply for Country X is Ho while the labor supply for Country Y is Hy identical aggregate production functions as shown in the figure below. The Output 0 H, H, Efficiency units of Labor 8) Refer to the scenario above. A one-unit increase in the efficiency units of labor will lead to in output in Country X than...
46) A shift outwards of the nation's production possibilities frontier can occur due to: 46) A)...
46) A shift outwards of the nation's production possibilities frontier can occur due to: 46) A) a change in the amounts of one good desired. B) an increase in the labor force C) a natural disaster like a hurricane or bad earthquake D) a reduction in unemployment. 48) If a nation's production possibilities frontier moves outward, this represents: A) economic growth. B) an impossible situation. C) rising prices of the two goods on the production possibilities frontier model. D) a...
1. If demand deceases and supply remains constant, what happens to the market equilibrium? A. Quantity...
1. If demand deceases and supply remains constant, what happens to the market equilibrium? A. Quantity and price both rise. B. neither price or quantity will change C. Quantity and price both fall. D. Quantity rises and price falls. 2. A positive statement is A. an opinion B. a value judgement. C. can be shown to be correct or incorrect. D. based upon what can be demonstrated to be true. 3. If a technology change reduces a company's production costs,...
QUESTION 21 Assume there is a price floor imposed on a good which is above the...
QUESTION 21 Assume there is a price floor imposed on a good which is above the equilibrium price. Which of the following changes would reduce the size of the surplus? a. An increase in demand. b. A decrease in demand. c. An increase in supply. d. Any of the above. QUESTION 22 Economic growth can be illustrated by: a. an inward shift of the production possibilities curve. b. a movement along the production possibilities curve. a movement from a point...
The following graph shows the isoquant representing the combinations of capital and labor needed to produce...
The following graph shows the isoquant representing the combinations of capital and labor needed to produce 10 left-handed can openers. Assume that diminishing marginal returns characterize the production function. (Hint: click a point on the graph to see its coordinates.) 500 450 400 360 300 LABOR (Workers) 260 + 200 160 + * 100 50 o 12 3 18 15 o 21 Using the information provided on the graph, complete the following table with the changes in capital and labor...
7. Assume that the long-run production function can be expressed as Q-SKL? Where Q is quantity...
7. Assume that the long-run production function can be expressed as Q-SKL? Where Q is quantity of output, K is the quantity of capital and L is the quantity of labor. If capital is fixed at 10 units in the short run then the short-run production function is: Q=10KL b. Q=50KL? Q=10L? d. 0=50L Q=500KL 8. For a linear total cost function: a. MC will be downward sloping b. MC = AVC c. AVC is upward sloping and linear d....
1. Which of the following would be considered more closely related to macroeconomics? A) a firm...
1. Which of the following would be considered more closely related to macroeconomics? A) a firm deciding how many workers to hire. B) a household deciding how much to spend on groceries. C) a government economist forecasting the unemployment rate. D) a business trying to decide how much outuput to produce. - 2. Which of the following is an example of using the scientific method with a natural experiment? A) Measuring how long it takes a marble to fall from...
1. A firm negotiates a new labor contract with a higher average hourly wage. What is the most likely effect of the higher wage on the firm's price and output? a) Neither price nor output will be affected. b) Price will increase but output will not change. c) Both price and output will increase. d) Price will not change but output will decrease. e) Price will increase and output will decrease. 2. Other factors constant, a change in will cause...
Scenario: Country X and Country Y production amount of physical capital stock available to each country is also equal. However, the labor supply for Country X is Ho while the labor supply for Country Y is Hy identical aggregate production functions as shown in the figure below. The Output 0 H, H, Efficiency units of Labor 8) Refer to the scenario above. A one-unit increase in the efficiency units of labor will lead to in output in Country X than...
46) A shift outwards of the nation's production possibilities frontier can occur due to: 46) A) a change in the amounts of one good desired. B) an increase in the labor force C) a natural disaster like a hurricane or bad earthquake D) a reduction in unemployment. 48) If a nation's production possibilities frontier moves outward, this represents: A) economic growth. B) an impossible situation. C) rising prices of the two goods on the production possibilities frontier model. D) a...
QUESTION 21 Assume there is a price floor imposed on a good which is above the equilibrium price. Which of the following changes would reduce the size of the surplus? a. An increase in demand. b. A decrease in demand. c. An increase in supply. d. Any of the above. QUESTION 22 Economic growth can be illustrated by: a. an inward shift of the production possibilities curve. b. a movement along the production possibilities curve. a movement from a point...
The following graph shows the isoquant representing the combinations of capital and labor needed to produce 10 left-handed can openers. Assume that diminishing marginal returns characterize the production function. (Hint: click a point on the graph to see its coordinates.) 500 450 400 360 300 LABOR (Workers) 260 + 200 160 + * 100 50 o 12 3 18 15 o 21 Using the information provided on the graph, complete the following table with the changes in capital and labor...
7. Assume that the long-run production function can be expressed as Q-SKL? Where Q is quantity of output, K is the quantity of capital and L is the quantity of labor. If capital is fixed at 10 units in the short run then the short-run production function is: Q=10KL b. Q=50KL? Q=10L? d. 0=50L Q=500KL 8. For a linear total cost function: a. MC will be downward sloping b. MC = AVC c. AVC is upward sloping and linear d....
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