Is a firm technologically efficient if it uses the latest technology? Why or why not?
What will be an ideal response?
Technological efficiency occurs when a firm produces a given level of output using the least amount of inputs. Adopting the latest available technology does not necessarily imply that a firm's production process is technologically efficient. As long as the firm is getting the maximum possible output for a given combination of inputs, it is technologically efficient.
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Which of the following mergers would result from the purchase of a retail clothing chain by a computer software company?
a. A horizontal merger. b. A vertical merger. c. A conglomerate merger. d. A monopoly merger.
The economy is in a recessionary gap, wages are inflexible downward, and there is complete crowding out. Which of the following is consistent with this state of affairs?
A) The economy will soon self-regulate and produce Natural Real GDP. B) Expansionary fiscal policy will be effective at removing the economy from the recessionary gap. C) If expansionary fiscal policy is implemented, the AD curve will shift to the right, and eventually the price level and Real GDP will rise. D) b and c E) none of the above