What is the marginal technical rate of substitution?
What will be an ideal response?
The marginal rate of technical substitution is the slope of the isoquant. It is the ratio of the marginal product of labor to the marginal product of capital. It is the negative of the slope of the isoquant.
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The table above gives the demand schedule for museum visits
a. You, as the resident economist, have been given the task of maximizing the museum's total revenue. What admission price should you charge? b. What is the elasticity of demand between $6 and $4? c. Moving along the demand schedule from $10 to $8 to $6 and ultimately to $4, how does the price elasticity of demand change in size?
The crowding-out effect refers to:
a. higher interest rates and reduced private spending that results from financing federal budget deficits. b. higher future taxes accompanying budget deficits to reduce private consumption. c. the inflation rate to rise when the unemployment rate is low. d. increases in private savings to reduce interest rates and, thereby, crowd-out government