What two things determine the cost of production?

XYZ Corporation operates in perfectly competitive input markets and employs labor, capital,land in its production process. What three conditions must be met for the firm to be maximizing profit?

What will be an ideal response?

The proponents of adaptive expectations believe that:

a. there will be a substantial time lag before people anticipate the effects of a shift to a more expansionary macro-policy. b. macro-policies that stimulate demand and place upward pressure on the general level of prices will temporarily increase output and employment. c. discretionary changes in macro-policy can be made in a manner that will reduce the economic ups and downs of a market economy. d. all of these are true.