Describe the three pillars of productivity growth.
What will be an ideal response?
The three pillars of productivity growth are capital formation, technology, and labor force quality. Each of the three factors can contribute to increases in the amount of output a given labor force can produce. Capital refers to physical means of production, such as equipment, factories, computers, and software. These are the tools with which workers produce output. As the amount of capital available to each worker increases, his or her ability to produce increases as well. Technology is the process whereby new means of using equipment contribute to increasing labor output. Usually new technology is embedded in new equipment, so technological improvement and capital formation are closely linked. Labor force quality improvement, also known as increasing human capital, is a result of education and training. Education usually occurs in schools and colleges, whereas training often takes place on the job at the place of work. Workers with high levels of education usually are more productive and also reap greater benefits from on-the-job training.
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In the above table, the production of 3 pizzas and 35 cases of soda is
A) impossible unless more resources become available. B) feasible but would involve unemployed or misallocated resources. C) possible only if the economy produces with maximum efficiency. D) possible only if there is inflation.
Cross elasticity tells a manager that the product they produce is
A) a countercyclical good. B) a cyclical good. C) a luxury. D) a substitute or complement to other goods.
An annual income statement from Quest Realty, Inc. is shown below:During this year of operation, Quest Realty owned and occupied an office building in downtown Indianapolis. For this year, the building could have been leased to other businesses for $2,000,000 in lease income. Quest Realty also owned undeveloped land valued at $15,000,000. Owners of Quest Realty can earn a 14% rate of return annually on funds invested elsewhere.Total explicit costs of using market-supplied resources for Quest Realty for this year are
A. $41,100,000 B. $37,000,000 C. $38,200,000 D. $23,000,000 E. none of the above
When the elasticity coefficient for resource demand is greater than one, resource demand is:
A. inelastic. B. elastic. C. unit-elastic. D. perfectly inelastic.