When an economy's overall production grows faster than its population, it is referred to as:
A) long-run growth per capita.
B) an increase in nominal GDP.
C) deflation.
D) the paradox of thrift.
Answer: A) long-run growth per capita.
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In the above figure, if a subsidy is granted that generates an efficient allocation of resources, then the output level will be
A) zero. B) 50 units per week. C) 150 units per week. D) 250 units per week.
Historically, empirical evidence showed that it was more cost effective to have a single generator of electricity serve a particular region's electricity needs than to have several smaller units compete against each other
More recently, technological advances have occurred in the generation of electricity that allow much smaller generating units to produce electricity for the same average cost as much larger units. Explain how this change would be reflected in the firm's long-run average cost curve and minimum efficient scale.
In a perfectly competitive market with 75 non-identical firms producing at market price p1
A) the supply curve is flatter than if there were only 35 identical firms. B) the supply curve is more elastic than if there were only 25 identical firms. C) the supply curve is more inelastic than if the firms were identical. D) All of the above.
Helen is a computer analyst earning $750,000 a year in New York and flies each winter weekend to Florida to bask in the sun. The price tag is $1,500 . Her cousin Fred is a nursery school teacher earning $35,000 a year in Chicago and spends his winter weekends going to avant-garde movie theaters. The price tag is $20 . Who gets the better deal? a. Helen gets the better deal because the marginal
utility of the Florida weekend is higher than the weekend of movies, regardless of the price tags. b. Helen gets the better deal because the ratio of marginal utility to price is higher than the ratio of marginal utility to price for a weekend of movies. c. Fred gets the better deal because the ratio of marginal utility to price is higher than the ratio of marginal utility to price for a Florida weekend. d. Using interpersonal comparisons of utility, it is clear that Fred gets the better deal because the difference in price overwhelms any difference in the marginal utility of aweekend of movies compared to a weekend in Florida. e. It is impossible to say who gets the better deal because we can't engage in interpersonal comparisons of utility.