Question 8

Consider a production function in two factors Q = f(K,L) that is CRS. When the MPK is positive and falling the MPL is
a.

falling

b.

rising

c.

positive

d.

flat

e.

a and c of the above

Question 9

Consider a production function in two factors Q = f(K,L) that is CRS, K is a fixed factor. How would the production function be affected by an improvement in technology?
a.

the production function would be unaffected

b.

the production function would shift vertically upward

c.

the production function would shift vertically downward

d.

the production function would disappear

Question 10

Assume a production function that has decreasing returns to scale. A doubling of all the inputs will lead to a ____________ of the output
a.

doubling

b.

more than doubling

c.

less than doubling

d.

zero increase

Question 20

Which of the following is true:

Money was invented in the 12th century by Sir John Money
Money is the result of complex social evolution
Money origins are to be found the government safeguards of legal tender
All
Question 23

The price elasticity of demand for a good is -0.50. By how much must the price of the good decrease in order for sales to rise by 12%?
a.

3%.

b.

4.8%.

c.

12.4%.

d.

24%.


Question 24

Suppose Joe purchases 5 six-packs of beer per month when his monthly income is $100. Joe receives a raise at work, giving him an extra $40 per month in take-home pay, and Joe now purchases 7 six-packs of beer per month. What is Joe's income elasticity of demand for beer?
a.

2.

b.

1.

c.

0.3.

d.

0.05.

Question 37

Suppose we observe that the price of gasoline has been rising, even though the quantity of gasoline sold has been falling. We can conclude that

A.) The law of supply does not hold for gasoline

B.) The law of demand does not hold for gasoline

C.) The demand for gasoline must have fallen

D.) The supply of g