Suppose depreciation per worker is less than saving per worker. Given this situation, explain what will happen to each of the following variables over time: capital per worker, output per worker, saving per worker, and consumption per worker
What will be an ideal response?
If depreciation is less than saving, it is also less than investment. Alternatively, there is excess investment to offset the amount of capital that wears out. So, the capital stock will increase. This will cause an increase in K/N, Y/N, and S/N. As Y/N rises, so will C/N.
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If robotics and factory automation become more widespread in an industry and all else is held constant
A. the demand for labor should decrease in that industry and the wage rate should increase. B. the demand for labor should increase in that industry and the wage rate should decrease. C. both the demand for labor in that industry and the wage rate should decrease. D. both the demand for labor in that industry and the wage rate should increase.
Elasticity is:
A) the sum of the percentage change in two variables. B) the difference of the percentage change in two variables. C) the product of the percentage change in two variables. D) the ratio of the percentage change in two variables.
The figure above shows the market for airline tickets. If airline tickets are a normal good, then the recession in 2008 that caused people's incomes to decrease lead to a shift from
A) D0 to D1. B) D1 to D0. C) S0 to S1. D) S1 to S0.
Managers should maximize
A) social accountability. B) the health and welfare of the employees. C) market share. D) none of these choices.