According to classical growth theory, if labor productivity increases,
A) people save more, which increases the capital per hour even more, and so economic growth continues indefinitely.
B) the population grows and eventually real GDP returns to the subsistence level.
C) the population grows but more slowly than real GDP so that people's incomes are permanently higher.
D) the pursuit of profit causes further increases in capital per hour and technology and economic growth continues indefinitely.
E) the growth rate of real GDP per person permanently increases.
B
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Refer to Figure 4-6. What area represents consumer surplus at the equilibrium price of P1?
A) D + E B) A C) A + B + C + D + E D) A + B + C
In the short run, a perfectly competitive firm will shut down if:
a. price is less than average cost. b. marginal revenue is equal to marginal cost. c. total revenue is less than total variable cost. d. total revenue is equal to total cost.
Assume that each day ten thousand children watch Sesame Street on public television and that watching Sesame Street generates a benefit of $100 per child per year. Once a year, public television hold a pledge drive asking viewers to make voluntary contributions in order to keep the programming available to everyone. If public television stations collect less than $100 per child during the pledge drive, then this is evidence:
A. that parents do not care about their children. B. that head taxes are regressive. C. that the government should not subsidize public television. D. of the free-rider problem.
A little more than half of state and local expenditures are applied to ______.
a. defense b. education and healthcare c. police and fire protection d. roads