How does technological advance enhance economic efficiency? Distinguish between its effects on productive efficiency and locative efficiency
What will be an ideal response?
Technological advance enhances economic efficiency. Process innovation improves productive efficiency by increasing the productivity of inputs and reducing average total costs. Product innovation enhances vocative efficiency by giving society a mixture of products that is more preferred.
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Suppose the average nominal wage in an economy has increased by 22% in the last ten years. At the same time, the rate of inflation has been 13%. Which of the following statements is true?
A. In terms of the buying power of their wages, workers are better off. B. We do not have enough information to determine the buying power of the workers' wages. C. In terms of the buying power of their wages, workers are worse off. D. In terms of the buying power of their wages, workers are no better off now than ten years earlier.
Countries in sub-Saharan Africa are economically disadvantaged because infectious diseases spread in these countries relatively easily. This statement reflects the:
A) geography hypothesis. B) culture hypothesis. C) location hypothesis. D) institutions hypothesis.
The concept of "invisible hand" introduced by Adam Smith explains: a. why people act in their own best interests
b. why the government intervenes to overcome failures in private markets. c. how people, acting out of self-interest, unintentionally promote the general good. d. how comparative advantage and specialization promote international trade. e. how the creation of goods and services generates its own demand by creating employment and income.
Shaniqua sells life insurance and is considering buying a $60,000 Lexus for business purposes (thus, the expense reduces her taxable income). If Shaniqua is in the 40 percent marginal tax bracket, how much after-tax income will she have to give up in order to enjoy the Lexus?
a. $24,000 b. $36,000 c. $30,000 d. $84,000