Which of the following occurs in the long run neoclassical growth model without technological change?
A. Capital deepening ceases.
B. Real wages stop growing.
C. The return to capital is constant.
D. Real interest rates are constant.
E. All of the above.
Ans: E. All of the above.
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Refer to Figure 9.5. The firm is producing Q units. Which area represents producer surplus?
A. ABCDE
B. EDGF
C. EDCHF
D. ABHF
Are the goods that businesses offer for "free" to consumers also free to society?
A. Yes, because the marginal benefit is greater than the marginal cost. B. No, because society does not assign a value to free goods. C. Yes, because the individual consumer does not have to pay for them. D. No, because scarce resources were used to produce the free goods.
A monopolistically competitive firm differs from a perfectly competitive firm in the long run in that
A) the demand curve faced by a monopolistically competitive firm is downward sloping, while the demand curve faced by a perfectly competitive firm is horizontal. B) profits are positive for a monopolistically competitive firm and zero for a perfectly competitive firm. C) profits are zero for a monopolistically competitive firm and positive for a perfectly competitive firm. D) marginal cost equals the market price for a monopolistically competitive firm but not for a perfectly competitive firm.
Managers undertake an investment only if
a. Marginal benefits of the investment are greater than zero b. Marginal costs of the investment are less than marginal benefits of the investment c. Marginal benefits are greater than marginal costs d. Investment decisions do not depend on marginal analysis