Does this production function, q = 10L0.5K0.3, experience increasing, decreasing or constant returns to scale?
A) Decreasing because a 100% increase in inputs increases outputs by 80%.
B) Increasing because an 80% increase in inputs increases outputs by 100%.
C) Decreasing because 0.5 + 0.3 < 1.
D) A and C.
D
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In the consumption function, the real interest rate, consumer confidence, wealth, available consumer credit, and consumer debt are captured in the autonomous consumption term of the consumption function
Indicate whether the statement is true or false
The above figure shows the payoff to two airlines, A and B, of serving a particular route. If the two airlines must decide simultaneously, which one of the following statements is TRUE?
A) Firm A has a dominant strategy. B) Firm B has a dominant strategy. C) Neither firm entering is a Nash equilibrium. D) The outcome of the game is unpredictable.