Suppose than an economy has output Y = A , that Y equals $12 trillion, capital K is $27 trillion, and labor L is 64 million workers. Given this information, what is the closest approximation of total factor productivity A?
A) less than 0.01
B) around 0.25
C) roughly 0.33
D) close to 0.4
E) exactly 144
B
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When a rare skill contributes to the production of something that consumers value highly the:
A. value of the marginal product is high. B. marginal cost per unit is low. C. total product is high. D. marginal product is high.
Cal has a choice between two gambles. The first gamble offers a 50 percent chance of winning $20 and a 50 percent chance of losing $20. The second gamble offers a 20 percent chance of winning $100 and an 80% chance of losing $20. Which choice has the higher expected value?
A. The expected value of both gambles is the same, but Cal would prefer the first gamble since the chances of winning are higher. B. The expected value of the first gamble is higher. C. The expected value of the second gamble is higher. D. The expected value of both gambles is the same, so Cal would be indifferent between the two.
Inventories are included in GDP because
A. they are value added to final goods. B. they were produced and are sold in their final form. C. they will depreciate. D. they are considered government spending.
The elasticity of substitution is the
A. change in the price of capital over the change in the price of labor. B. change in capital over the change in the price of labor. C. percentage change in capital over the percentage change in labor. D. percentage change in the price of capital over the percentage change in the price of labor. E. percentage change in the capital/labor ratio resulting from a 1-percent change in the relative price of labor to capital.