The Solow Growth Model predicts that
A. the rich will get poorer and the poor will get richer.
B. poor nations will grow faster than rich nations.
C. rich nations will grow faster than poor nations.
D. the rich will get richer and the poor will get poorer.
Answer: B
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All homogeneous functions (of any degree) are homothetic but not all homothetic functions are homogeneous (of some degree).
Answer the following statement true (T) or false (F)
At his current level of output, a monopolist has a MR of $10, a MC of $6, and an economic profit of zero. If the market demand curve is downward sloping and his marginal cost curve is upward sloping, the monopolist: a. is producing at the profit-maximizing level of output
b. could increase profit by increasing output. c. could increase profit by increasing his price. d. should exit the market if significant fixed costs have been incurred.
If the absolute price elasticity of demand is 2.0, a 10 percent decrease in price will increase quantity demanded by
A) 10 percent. B) 20 percent. C) 5 percent. D) 12 percent.
Refer to the information provided in Figure 9.1 below to answer the question(s) that follow. 
Figure 9.1Refer to Figure 9.1. If this farmer maximizes profits, his per-bushel profit will be
A. $2. B. $4. C. $9. D. $15.