Dara lives in an agricultural society with 2 million acres of farmable land. The population of Dara’s country is growing at a rate of 3 percent. Assuming there is no way to increase the amount of land available, the law of diminishing returns means that ______.
a. output will fall as less land is available per worker
b. output will rise, but by ever shrinking amounts
c. the country’s output will rise by about 3 percent annually
d. innovation will increase output to meet demand
b. output will rise, but by ever shrinking amounts
You might also like to view...
If autonomous investment increases by $200 billion and the marginal propensity to consume (MPC) is 0.5, then
A) real Gross Domestic Product (GDP) will rise by $100 billion. B) real Gross Domestic Product (GDP) will rise by $200 billion. C) real Gross Domestic Product (GDP) will rise by $400 billion. D) real Gross Domestic Product (GDP) will decrease by $100 billion.
What does empirical evidence suggest about the elasticity of labor supply? What does this suggest about the burden of the payroll tax in the United States?
What will be an ideal response?
According to public choice theory, why might government policy benefit only a narrow interest group?
a. If the benefits to the narrow interest group are relatively large, they have an incentive to invest a lot of money and effort in lobbying government. b. If the costs of this policy are spread out among the general population, and are a very small burden for anyone person, then those paying the costs have little incentive to organize opposition. c. Both a. and b. are correct. d. None of the above is correct.
In the United States, because men on average earn more than women, the substitution effect tends to outweigh the income affect when wages increase.
Answer the following statement true (T) or false (F)