The convergence theory is based on the idea of:
A. decreasing marginal returns.
B. decreasing income per capita.
C. increasing rates of income per capita.
D. increasing opportunity costs.
A. decreasing marginal returns.
You might also like to view...
A executive can either slack (effort e = 0) or work hard (e = 1) on behalf of shareholders. If she slacks, the firm earns a gross return of 1,000 for sure. If she works hard, there is an even chance of the gross return being 10,000 or 80,000 . Her overall utility equals her utility from wage income (of the form w1/2, where w is the wage) minus the disutility of work (simply d), or in other words
U = w1/2 – d. If she slacks, she experiences no disutility of work (d = 0) but if she works hard, the disutility of work is d = 50 . Assume that U = 0 in her next best available job. What is the optimal wage contract that shareholders would offer if they can observe the effort of the executive? a. A flat wage w = 0 and no requirement to work hard. b. A flat wage w = 50 and a requirement to work hard. c. A flat wage w = 2,500 and a requirement to work hard. d. A share of 50% of the profits and a requirement to work hard.
Imagine that you are an entrepreneur, making designer t-shirts in your garage. Your total cost (in dollars) is given by the equation TC = 300 + 10Q, where Q represents the number of t-shirts you make. If you make 100 t-shirts, your average total cost is ________.
A. $10 B. $3 C. $3.10 D. $13
If autonomous consumption rises by $40 and, as a result, Real GDP rises by $200, then the multiplier is
A. 4. B. 5. C. 6. D. 10. E. none of the above
A higher U.S. exchange rate means that
A) foreign products are now more expensive to U.S. citizens. B) foreign products are now cheaper to U.S. citizens. C) U.S. products are now more expensive to U.S. citizens. D) U.S. products are now cheaper to foreign countries.