Suppose the production of long-distance airline flights is described by a fixed proportion production process in which three crew members (i.e., labor) are required for each aircraft (i.e., capital)
If the airline operates with four crew members per plane, then we know that: A) the production process violates diminishing margin returns.
B) production at this point is technically inefficient.
C) the isoquants for this production process are upward sloping.
D) the airline will have negative profits.
B
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Stagflation is a combination of ________ real GDP and a ________ price level
A) decreasing; falling B) decreasing; rising C) increasing; rising D) no change in; rising E) increasing; falling
The existence of marginal social benefits which are not marginal benefits for the industry producing the import substitutes
A) is an argument supporting free trade and non-governmental involvement. B) is an argument supporting the use of an optimum tariff. C) is an argument supporting the use of market failures as a trade-policy strategy. D) is an argument rejecting free trade and supporting governmental involvement. E) is an argument rejecting the domestic market failure concept.