ECON10A_12

# ECON10A_12 - 1 Review 2 Question 1 c 1 B A C c 2 I 1 I 2...

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Unformatted text preview: 1/4/2008 1 Review 1/4/2008 2 Question 1 c 1 B A C c 2 I 1 I 2 Initially, the person below is: A. Saver B. Borrower C. Can’t Tell 1/4/2008 3 Question 2 c 1 B A C c 2 I 1 I 2 The figure depicts what happens when r.... A. Rises B. Falls C. Can’t Tell 1/4/2008 4 Question 3 c 1 B A C c 2 I 1 I 2 This interest rate change caused: A. the saver to save more B. the borrower to borrow more C. the borrower to become a saver D. the saver to become a borrower 1/4/2008 5 Question 4: If MP L is falling, then so is AP L A. True B. False C. Can’t tell AP L MP L L 1/4/2008 6 Question 5: A firm’s production function is F(L, K)=LK. It currently uses 6 units of L and 3 of K. Which would give it more additional production: A. 1 unit of labor (L) B. 1 unit of capital (K). 1/4/2008 7 Question 6: A firm’s production function is F(L, K)=LK. It currently uses 6 units of L and 3 of K. If it lost a unit of labor, how much extra capital would it need to be just as productive as it was before? A. ½ B. 2 C. Can’t tell 1/4/2008 8 Isoquants Isoquant: Set of input bundles that yield the same output Analogous to, but not the same as indifference curves! L K L L 1 K 1 K 1/4/2008 9 MRTS – Marginal Rate of Technical Substitution MRTS(L, K) If you took away 1 unit of labor, how much extra capital firm would need to maintain same level of production as before. Note 1: Depends on L and K Note 2: This is the slope of the isoquant at the point L, K ....
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ECON10A_12 - 1 Review 2 Question 1 c 1 B A C c 2 I 1 I 2...

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