If Jane can produce 3 pairs of shoes per hour, while Bob can produce 2, then ________ has a(n) ________ advantage in producing shoes.
A. Jane; absolute
B. Jane; comparative
C. Bob; comparative
D. Bob; absolute
Answer: A
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Refer to Figure 6.1. Suppose the economy is originally in steady state at k*1. If the saving rate increases from s1 to s2, the capital-labor ratio will begin to ________, and real GDP per worker will ________
A) rise; rise B) rise, fall C) fall, fall D) fall; rise
The Gini coefficient measures:
A. income inequality. B. poverty prevalence. C. average income per person. D. change in average income per person over time.
Prior to the Great Depression, classical economists believed that a recessionary downturn would be reversed by:
a. higher wages and prices. b. lower wages and prices. c. an expansionary monetary policy on the part of the Federal Reserve System. d. an increase in government spending that would stimulate aggregate demand.
Assume that the demand curve for a commodity is represented by the equation Q = 25 - 1.3P. Calculate the change in total spending for this commodity when price falls from $4.50 to $4.20
a. Total spending rises by $4.11. b. Total spending declines by $4.11. c. Total spending declines by $8.20. d. Total spending rises by $8.20.