Apple Computer is more likely to continue to use input markets rather than manufacture its own inputs internally when
a. the quality of inputs is difficult to determine
b. switching among input suppliers is easy
c. there are very few firms producing the input
d. the input is difficult to identify and define
e. transaction costs go up
B
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If the economy is operating on the long-run aggregate supply curve, then expansionary fiscal policy will
A) generate higher prices in the short run, but will induce aggregate supply to increase in the long run. B) generate an increase in real GDP and higher prices in the short run, but then real GDP will decrease to its long-run level, and the price level will increase some more. C) generate an increase in real GDP without higher prices in the short run, but then real GDP will return to its long-run level, and the price level will increase. D) generate an increase in real GDP and higher prices in both the short run and the long run.
Frannie spends her income on rice and beans. At her optimum, Frannie's
a. utility from consuming rice is equal to her utility from consuming beams. b. marginal utility of rice is equal to her marginal utility of beans. c. marginal utility per dollar spent on rice equals her marginal utility per dollar spent on beans. d. marginal rate of substitution is equal to 1.