The nation of Futura has an actual capital-labor ratio which is in steady state. Futura will experience
A) no growth from convergence and the economy will remain on its balanced growth path.
B) positive growth from convergence to keep the economy on its balanced growth path.
C) positive growth from convergence, but the growth will be less than the balanced growth rate in order to remain on its balanced growth path.
D) negative growth from convergence to offset the increase in the balanced growth rate in order to remain on its balanced growth path.
A
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Marginal social benefits are equal to
A. marginal private benefits + marginal internal benefits. B. marginal private benefits - marginal internal benefits. C. marginal private benefits + marginal external benefits. D. marginal private benefits - marginal external benefits.
If the cost of production incurred by two producers in a competitive industry differs, the long-run supply curve:
a. will be a downward sloping step function. b. will be an upward rising step function. c. will be a horizontal line at the market price. d. will be a vertical line at the equilibrium output.
Monopolistic competition is an
a. inefficient market structure because there is deadweight loss. b. inefficient market structure because price exceeds marginal cost. c. efficient market structure because free entry drives long-run profits to zero. d. Both a and b are correct.
Refer to the diagram. Flow 2 represents:
A. wage, rent, interest, and profit income.
B. land, labor, capital, and entrepreneurial ability.
C. goods and services.
D. consumer expenditures.