Which of the following changes a firm's production function?
A) hiring additional workers
B) acquiring additional physical capital
C) adding a second production facility exactly like its first production site
D) adopting new technology
Answer: D
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Real output per capita is calculated by
a. multiplying the population by GDP b. dividing nominal GDP by the population c. dividing the population by nominal GDP d. dividing real GDP by the population e. dividing the population by real GDP
If an increase in quantity demanded of a product reduces the quantity demanded of another, then the two goods are said to be substitutes
a. True b. False Indicate whether the statement is true or false
The reason that changes in spending don't immediately flow into changes in inflation is that:
A. the velocity of money changes only slowly. B. real GDP is relatively stable. C. prices and wages are sticky. D. inflation depends on the money supply.
Suppose that Gigantic Company is increasing in size. As Gigantic Company grows, coordination of work teams is becoming more difficult because of increased bureaucracy. It is likely that continued growth will result in:
A. economies of scale. B. Gigantic Company achieving the minimum efficient scale of production. C. diseconomies of scale. D. increasing marginal returns.