Real GDP grows when
I. the quantities of the factors of production grow.
II. persistent advances in technology make factors of production increasingly productive.
III. human capital grows.
A) only I
B) both I and III
C) only II
D) I, II, and III
D
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If a firm pays its workers $10 per hour, the marginal product of labor is 5 units per hour, and the price of the firm's product is $15 per unit, what is the price elasticity of demand facing the firm?
A) -1.15 B) -2.15 C) -1.0 D) -3.56
The cost of maintaining unemployment below its natural rate with expansionary government policy is: a. increasing inflation
b. decreasing inflation. c. always a larger federal deficit. d. always a smaller federal deficit.
Which of the following is an example of productive inefficiency?
a. Scientists discover a new substance that dramatically increases potential steel production. b. A demographic boom leads to a rise in the number of workers in the labor force. c. The rate of unemployment falls to zero. d. Computer technicians are forced to answer telephones rather than perform their normal duties. e. Due to economic growth, the economy reaches a new point along its production possibilities frontier.
In order for a firm to receive monopoly profits, there must be
A. mutual interdependence among firms. B. barriers to market entry. C. homogeneous products. D. free entry and exit to the market.