Real standards of living can increase
A. if there is positive growth in the manufacturing sector.
B. if the country is producing the same amount they traditionally have and are enjoying more leisure time.
C. only if there is positive economic growth.
D. only at the cost of increased urban congestion.
Answer: B
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Which of the following is a determinant of price elasticity of demand?
a. Availability of substitute goods b. Excess capacity c. Scale of production d. Inventories e. Cost of production
Suppose the marginal propensity to consume is 0.75 . If government purchases increase by $100 billion and the extra expenditure is financed with a net tax of $100 billion, by how much will output change?
a. -$400 billion b. $100 billion c. $400 billion d. $0 e. -$100 billion
Suppose California and Wisconsin produce wine and cheese. Making a bottle of wine costs $3 in California, but $12 in Wisconsin. On the other hand, making a pound of cheese costs $4 in California, and $8 in Wisconsin. Under these conditions,
A. California should export wine and Wisconsin should export cheese. B. California should export cheese and Wisconsin should export wine. C. California should export both wine and cheese. D. the two states cannot gain from trade with each other until a third state starts to export bottle openers.
When the minimum efficient scale occurs at a high level of industry output
A) the firms in the industry will be producing in the diseconomies of scale portion of the curve. B) there will only be a few firms in the industry. C) the government will have to take over the production of the good since it will be unprofitable for firms. D) there will be a lot of firms in this industry.