Suppose the production function for T-shirts can be represented as q = L0.25 K0.75. When K = 1 and q = 2, what is the slope of the isoquant? If there is insufficient information to answer the question, describe what information is needed
What will be an ideal response?
Since the slope of the isoquant is -K/3L, one needs to know the level of L. Since K = 1 and q = 2, L must equal 16. Thus the slope of the isoquant at this point is -(1/48 ).
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If the Fed buys a U.S. government bond from a member of the public,
a. the banking system has more reserves and the money supply tends to grow. b. the banking system has less reserves and the money supply tends to grow. c. the banking system has more reserves and the money supply tends to fall. d. the banking system has less reserves and the money supply tends to fall.
What is the "right" degree of abstraction necessary to analyze an economic problem?
a. simple abstraction of only minor details b. simple abstraction of only irrelevant details c. total abstraction of all variables d. total abstraction of all irrelevant details e. There is no "right" degree of abstraction to analyze an economic problem.