In a small European country, it is estimated that changing the level of capital from $8 million to $10 million will increase real GDP from $2 million to $3 million
If the number of hours worked in the labor force does not change, what does this information tell you about the slope of the per-worker production function in this range?
A) The slope is -2. B) The slope is 1/2. C) The slope is 2. D) The slope is 4.
B
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If the price of wireless phone service decreases and the demand for wired phone services decreases, then wired and wireless phone services are
A) substitutes. B) complements. C) inferior goods. D) elastic goods.
Sadie works at a factory for $15 an hour and typically works 40 hours a week. Sadie gets a pay raise and now earns $20 an hour. She decides to work 45 hours a week at $20 an hour. Her response to the pay increase demonstrates the:
A. income effect outweighing the price effect. B. price effect outweighing the income effect. C. income effect outweighing the substitution effect. D. labor effect outweighing the price effect.
During a recession:
a. Government spending automatically rises and taxes automatically rise. b. Government spending automatically falls and taxes automatically rise. c. Government spending rises automatically and taxes fall automatically. d. Government spending and taxes do not tend to change. e. None of the above.
When marginal utility is positive but decreasing, total utility is
A. decreasing. B. increasing. C. zero. D. negative.