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. not change its production technology, but produce fewer units of output.
B. use a more capital-intensive production technology.
C. use only capital to produce the product.
D. use a more labor-intensive technology.
Answer: B
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Compare the policy prescriptions of Keynesian, Classical, and Monetarist economists
What will be an ideal response?
In 1940, military spending amounted to roughly _____ of GDP; by 1943, it had risen to roughly ________ of GDP
a. 20 percent; 30 percent b. 2 percent; 40 percent c. 15 percent; 20 percent d. 1 percent; 25 percent
Which of the following is not associated with more inelastic demand?
a. a limited amount of time for consumers to respond to a price change b. availability of many close substitutes c. large percentage of income spent on the good in question d. Neither b. or c. is associated with more inelastic demand
The rule of 72 implies that a country with a growth rate of 2 percent:
A. will double its income in about 7 years. B. will double its income in about 36 years. C. will double its income in about 50 years. D. will never double its income.