The population of Lucien’s country is currently expanding at a rate of 2 percent, while its output is growing at a rate of 2.5 percent. If the population were to begin increasing at a rate of 3 percent, while output growth stayed at 2.5 percent, the per capita output would ______.
a. remain unchanged
b. rise then fall
c. rise
d. fall
d. fall
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The index that measures the change in price of a typical basket of consumer goods is
a. the GDP deflator. b. the consumer price index. c. nominal GDP. d. real GDP.
The return to schooling for society is higher than the return to schooling for the individual if
a. the concept of diminishing returns applies to education. b. the concept of constant returns to scale applies to education. c. human capital conveys positive externalities. d. investment in human capital involves no opportunity costs.
An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
Suppose a monopoly faces an inverse demand curve of P = 100 ? 2Q and has constant marginal cost of 6Q. If the government is considering legislation that would regulate price to the competitive level, what is the maximum amount the monopoly would spend on (legal) lobbying activities designed to thwart the regulation?
A. $500 B. $62.50 C. $562.50 D. None of the answers is correct.