Assume that a perfectly competitive firm faces a fixed wage rate of $4 and a constant per-unit cost of capital of $2. If the marginal product of labor and capital are 16 and 6, respectively, then to maximize profits the firm should
A) use relatively more labor.
B) use relatively less labor.
C) increase all inputs proportionately.
D) decrease all inputs proportionately.
A
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In the U.S., banks
A) cannot be forced to sell assets that the bank examiner deems too risky. B) can be forced to sell assets that the bank examiner deems too risky. C) can be forced to sell assets that the bank examiner deems too risky only after a court order. D) can be forced to sell assets that the bank examiner deems too risky only after both examiners from the Fed and from the FDIC agree. E) can be forced to trade assets that the bank examiner deems too risky.
Which of the following factors cause the IS curve to shift?
a. A change the money supply. b. A change in the level of taxes c. An autonomous investment change that shifts the investment function d. Both b and c e. All of the above