A "market" is an arrangement that allows people to exchange things
Indicate whether the statement is true or false
TRUE
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Suppose that an economy grows by 4 percent, total factor productivity grows by 3 percent, and the labor force increases by 6 percent. If labor and capital are the only inputs and labor contributes 40 percent to GDP, then the stock of capital must have _____
a. fallen by 5% b. fallen by 3.33% c. fallen by 2.33% d. risen by 3% e. risen by 1.8%
The natural rate of unemployment worsens if:
a. Unemployment benefits drastically improve. b. Capital markets become more competitive. c. A nation's resource endowments expand. d. All of the above. e. Actually, the natural rate cannot worsen. That's why it's called "natural."
Suppose that the only input used in the generation of solar energy is sunlight and has a zero cost. The average total cost of producing electricity is:
A. zero. B. equal to the marginal cost. C. equal to the average fixed cost. D. immeasurably high.
Assume that there were decreasing opportunity costs of production in an island economy that only produced two goods. What would the shape of the production possibilities frontier look like and why?
What will be an ideal response?