What is human capital and why is it crucial to expand human capital as part of the development process?
What will be an ideal response?
Human capital is defined as human capacities that raise productivity. In particular, human capital is focused on the level of education and health within the population. As more human capital is accumulated, labor productivity rises, which is essential for sustained growth in the economy.
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Since a monopoly faces a downward-sloping demand curve,
A. then, as Adam Smith wrote, “the price of monopoly is upon every occasion the highest which can be got.” B. price always exceeds average revenue. C. marginal revenue increases as output increases. D. the monopolist is a price maker.
According to classical growth theory, if labor productivity increases,
A) people save more, which increases the capital per hour even more, and so economic growth continues indefinitely. B) the population grows and eventually real GDP returns to the subsistence level. C) the population grows but more slowly than real GDP so that people's incomes are permanently higher. D) the pursuit of profit causes further increases in capital per hour and technology and economic growth continues indefinitely. E) the growth rate of real GDP per person permanently increases.
In New State, the bottling law requires that people get a refund of five cents when they return an empty bottle or can. Why does the state pay people to return bottles? In your answer, be sure to mention the role played by rational choice
What will be an ideal response?
Which of the following is not a reason that paying efficiency wages may increase a firm's profit?
a. Efficiency wages increase worker health and therefore increase worker productivity. b. Efficiency wages decrease worker turnover and therefore decrease hiring and training costs. c. Efficiency wages decrease worker shirking and therefore increase worker productivity. d. Efficiency wages are below the equilibrium wage rate but still attract a sufficient number of workers.