Explain why the costs of most services like haircuts and college education have risen at a faster rate relative to the costs of manufactured goods?
What will be an ideal response?
Manufactured goods enjoy more productivity gains most of the time over services. The reason is that machines can do more and more of the work with technological breakthroughs. However, gains in productivity in cutting hair and college education are harder to come by as the primary input in both is human and requires a relatively fixed mix of human and capital inputs in the production process.
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The quantity of goods and services that can be produced by one worker or by one hour of work is known as
A) per-capita GDP. B) labor productivity. C) real domestic output. D) the labor force participation rate.
If people are risk averse regarding environmental damages.
a. Low discount rates should be used b. High discount rates should be used c. Expected values will overstate ecological damages d. Irreversible actions should be taken e. They will generally approve of irreversible projects f. All of the above. g. None of the above.
For an inferior good,
a. the income effect is greater than the substitution effect. b. the income effect is smaller than the substitution effect. c. the income effect equals to the substitution effect. d. none of the above occurs.
In mid-2008, estimated losses on mortgages were estimated to be about ________ of U.S. GDP
A) 2% B) 5% C) 7% D) 9%