Which of the following assumptions underlying input-output analysis raises about its validity ?
I- The technical coefficients are fixed which means so substitution between inputs occurs
II- There are no externalities so that the total effect of carrying out several activities is the sum of the separate effects
III- Each good is produced by only one industry and each industry produces only one commodity
IV- There is no technical change

Related Mcqs:

1. Engineers for the All-Terrain Bike Company have determined that a 15% increase in all inputs will cause a 15% increase in output Assuming that input prices remain constant, you correctly deduce that such a change will cause ________ as output increases?

   A. average costs to remain constant
   B. average costs to decrease
   C. average costs to increase
   D. marginal costs to increase

2. If an input necessary for production is in limited supply so that an expansion of the industry raises costs for all existing firms in the market, then the long-run market supply curve for a good could be ?

   A. perfectly inelastic
   B. perfectly elastic
   C. upward sloping
   D. downward sloping

3. When an increase in government purchases raises incomes shifts money demand to the right raises the interest rate, and lowers investment we have seen a demonstration of ?

   A. supply-side economics
   B. None of these answers
   C. The crowding-out effect
   D. The multiplier effects

4. Suppose there is no tariff on imported inputs and the ratio of the value of imported inputs the value of the final product is 0.5 If the nominal tariff rate on the final product is 10 percent, the effective tariff rate equals ?

   A. 5 percent
   B. 10 percent
   C. 15 percent
   D. 20 percent

5. A firm in perfectly competitive industry is producing 50 units, its profit-maximising quantity. Industry price is £2 and total fixed costs and total variable cost are £25 and £40 respectively. The firm’s economic profit is ?

   A. £35
   B. £15
   C. £30
   D. £60

6. Micheal Roemer’s three-sector model shows that growth in the booming export sector I- reduces the price of foreign exchange II- retards other sectors’ growth by reducing incentives to export other commodities III- reduces incentives to replace domestic goods for imports IV- raises factor and input prices for non-booming sectors ?

   A. I and III only
   B. II and III only
   C. I, II and III only
   D. I, II , III only IV

7. Externalities arise because there is a divergence between ________ and _________?

   A. private costs, private benefits
   B. private costs, social costs or benefits
   C. social costs, social benefit
   D. insiders, outsiders

8. Suppose that the nominal tariff rate on finished computers is 12 percent and that the weighted average of the nominal tariff rates on the inputs used in producing computers is 18 percent. Thus, the effective rate of protection for the computer industry must ?

   A. be less than 12 percent and can be negative
   B. be less than 12 percent but must be greater than zero
   C. equal 6 percent
   D. exceed 30 percent

9. Assume that firms in an oligopoly are currently colluding to set price and output to maximise total industry profit. If the oligopolists are forced to stop colluding, the price charged by the oligopolists will _________ and the total output produced will __________?

   A. decrease; decrease
   B. increase; decrease
   C. decrease; increase
   D. increase; increase

10. Externalities are a problem only if ?

    A. decision makers do not take them into account
    B. all firms are perfectly competitive
    C. the externalities are negative
    D. all firms are monopolistic