That is capital deepening? How does it affect labor productivity?
Capital deepening, that is, an increase in the economy's capital-labor ratio, increases labor productivity, that
is, output per worker per hour. This is because labor productivity depends on how much capital is available
for the workers to work with. An increase in available capital makes workers more productive.
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According to classical economists, the credit market reaches an equilibrium when
A) desired investment equals desired saving. B) desired investment equals planned changes in aggregate supply. C) desired investment equals planned investment. D) planned investment equals government expenditures.
Which of the following describes the infant industry argument for protectionism?
A) Domestic producers require time to gain experience and lower their unit costs; this will allow these producers to compete successfully in international markets. B) Domestic producers in high-wage countries must be protected from foreign producers in low-wage countries to produce a level playing field. C) An industry must be protected in its early stages of development so that firms can compete with government-subsidized foreign competition. D) Some strategic industries must be protected to ensure adequate supplies of resources needed for national defense in emergencies.
Sam has $200 a month to spend on two normal goods-tanning sessions or rounds of golf. Tanning sessions are $20 each, and a round of golf is $40. Sam currently consumes six tanning sessions and two rounds of golf. If the price of a round of golf drops to $20, the income effect:
A. predicts Sam will increase his consumption of both golf and tanning sessions. B. predicts Sam will double his consumption of golf. C. predicts Sam will consume more golf and less tanning sessions. D. predicts Sam will consume less golf and more tanning sessions.
The law of diminishing marginal utility implies that the marginal utility of my tenth pistachio nut is less than the marginal utility of my third pistachio nut, other things constant
a. True b. False Indicate whether the statement is true or false