In the neoclassical growth model without technological progress, in the steady-state the level of capital increases at
a. the growth of technology plus the growth of population.
b. the growth of technology plus the growth of population plus depreciation.
c. the growth of technology.
d. the growth of population.
A
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Answer the following statement(s) true (T) or false (F)
1. An efficiency wage is the wage that maximizes the surplus of the worker. 2. Stockholders can use high levels of compensation and substantial severance payments to get their corporate executives to take on higher levels of risk. 3. A golden parachute is a mechanism that stockholders employ to encourage executives to be more risky than they would be without the parachute. 4. Stock options create the wrong incentive in that they create a principal-agent problem. 5. An unexpected increase in inflation, by diluting the informational content of prices, will lead to an increase in unemployment.
A bowed-outward production possibilities curve demonstrates the concept of
A) constant opportunity costs as production shifts from the production of one good to the production of the other good. B) decreasing opportunity costs as production shifts from the production of one good to the production of the other good. C) increasing opportunity costs as production shifts from the production of one good to the production of the other good. D) increasing opportunity costs at first but the opportunity costs steadily decrease as you move down along the curve.
If an industry has 25 firms that collectively have $150 million in total sales and the top three firms in this industry account for $78 million in sales and the fifth through twenty-fifth firms account for $60 million in sales, what is the amount of
sales for the fourth largest firm? A) $12 million B) $6 million C) $18 million D) none of the above
If a 5% increase in price leads to an 8% decrease in quantity demanded, demand is
a. perfectly elastic b. elastic c. unit elastic d. inelastic e. perfectly inelastic