A firm uses workers, land, and machinery for its production process. Which of the following statements is then true?
A) The only way the firm can change its output level in the long run is by changing the number of workers.
B) The only way the firm can change its output level in the long run is by changing the amount of land it owns.
C) The only way the firm can change its output level in the long run is by changing the amount of machinery.
D) The firm can change its output level in the long run by changing any or all of its three inputs.
D
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When the price of wood (which is an input in the production of furniture) falls, the consumer surplus associated with the consumption of furniture
A) increases. B) decreases. C) does not change. D) could be any of the above.
Which of the following must be true about homothetic tastes:
A. Utility functions that represent those tastes are homogeneous of degree 1. B. There exists a utility function that represents those tastes and is homogeneous of degree 1. C. There exists a utility function that represents those tastes such that the expenditure function is homogeneous of degree 1. D. The indirect utility function is homogeneous of degree zero. E. Both (a) and (c). F. Both (b) and (c). G. Both (b) and (d) H. None of the above.