What two factors determine labor productivity? Explain which of the two is more important
What will be an ideal response?
The capital-labor ratio and total factor productivity determine labor productivity. Total factor productivity is more important because the production function displays diminishing marginal returns for the capital-labor ratio, but diminishing marginal returns do not apply to total factor productivity.
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A movement along the demand curve for automobiles is caused by a change in:
A. the price of automobiles. B. the price of gasoline. C. the price of steel. D. consumers' incomes.
Price elasticity of demand shows how
A. Responsive the quantity demanded is to a change in price. B. To compute the slope of the demand curve. C. Responsive the price is to a change in demand. D. Responsive the quantity demanded is to a change in the price of related goods.
A decrease in the nation's wealth, all other factors constant, would cause:
A. the bond demand curve to shift left. B. bond prices to rise. C. the bond supply curve to shift left. D. interest rates to decrease.
When the price level is low and the demand for domestic goods increases, how does it affect international trade?
A. Net exports will decrease. B. Net exports will increase. C. Prices of all international goods will decrease. D. Prices of all international goods will increase.