Over the past year, output grew 4%, capital grew 2%, and labor grew 1%. If the elasticities of output with respect to capital and labor are 0.3 and 0.7, respectively, how much did productivity grow?
A. 3.0%
B. 3.3%
C. 2.7%
D. 2.0%
Answer: C
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Keynesians disagree with the new classical model because
a. people are often irrational. b. wages are often negotiated through contracts, not auctions. c. people do not form expectations. d. wages are set to clear auction markets in both the short run and long run. e. all of the above
An example of a factor of production is
A) a car produced by an auto manufacturer.
B) a worker hired by an auto manufacturer.
C) a loan granted to an auto manufacturer.
D) the automobiles exported by an auto manufacturer.
Economic profit is:
A. total revenues minus variable costs. B. total revenues minus implicit costs. C. total revenues minus explicit costs. D. total revenues minus explicit costs minus implicit costs.
As new substitutes for office productivity software are developed, the demand for workers in office productivity software production should
A) become more elastic. B) become less elastic. C) be unchanged. D) change in an undetermined way.