Assume the prices of labor and capital remain the same, but the average educational level of workers decreases and therefore labor productivity decreases. This would lead a firm to
A. use a more labor-intensive technology.
B. use a more capital-intensive production technology.
C. not change its production technology, but produce fewer units of output.
D. use only capital to produce the product.
Answer: B
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If the population increases, then potential GDP ________ and employment ________
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases
If 12 units of a good are sold when the price is $1 per unit, and 8 units are sold at a price of $1.50 per unit, then demand is
a. elastic. b. inelastic. c. of indeterminate elasticity. d. unit elastic.
Stagflation occurs when
A) inflation rises and GDP falls. B) inflation falls and GDP falls. C) inflation rises and GDP rises. D) inflation falls and GDP rises.
Important steps in the growth of the wage-labor system of the North in the early 19th century include which of the following?
(a) The advancement of many of the old skilled crafts and apprenticeship systems by the factory system (b) The fall in the demand for unskilled labor created by transportation improvements (c) The complication of work tasks in the factory, which allowed the use of women and child labor (d) Large-scale migration to the U.S. of relatively unskilled workers who sought jobs in the cities and factories