What accounts for differences in living standards between rich and poor countries today?
What will be an ideal response?
The differences found in the standards of living of present rich and poor countries are simply the result of modern economic growth. Rich countries have been able to increase the amount of output per person available to their citizens while poor countries have experienced stagnant or declining shares of per capital output. For example, in the year 2011 the citizens of the United States enjoyed a GDP per person of about $48,000, while in 2011 the people of Zimbabwe experienced a much lower level of output per person of $752.
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If the elasticity of demand for peaches is 1.76 and the elasticity of demand for apples is 1.59, then consumers are
A) more sensitive to a change in the price of peaches than they are to a change in the price of apples. B) less sensitive to a change in the price of peaches than they are to a change in the price of apples. C) more sensitive to a change in the quantity of peaches than they are to a change in the quantity of apples. D) less sensitive to a change in the quantity of peaches than they are to a change in the quantity of apples.
An insurance company is likely to attract customers like Clancy who want to purchase insurance because he knows better that the company that he is more likely to make a claim on a policy. What is the term used to describe the situation above?
A) adverse selection B) moral hazard C) economic irrationality D) asymmetric information
In the long run, firms in a perfectly competitive market:
A. produce a quantity that maximizes profits. B. earn zero economic profit. C. choose the level of output that minimizes average total costs. D. All of these are true.
Per capita GNP and quality-of-life are the only ways to determine a country's level of economic development
a. True b. False Indicate whether the statement is true or false