How does investment in capital goods and infrastructure contribute to economic growth?
Please provide the best answer for the statement.
Capital goods (plant, equipment, tools) are needed by workers to be more productive. New investment in capital goods helps workers produce more goods and services per work hour, thus increasing labor productivity. Labor productivity is a key factor of economic growth. Infrastructure is also important because there is a need for public capital goods (highways, harbors, bridges, educational facilities) that help businesses and their workers get the job done sooner. For example, if the highway infrastructure is poor, it will be more difficult for businesses to get their products to market and it will require more work time on the part of their workers, thus reducing labor productivity.
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If 50 percent of the population in a country is employed and average labor productivity equals $30,000, then real GDP per person equals:
A. $50,000. B. $30,000. C. $15,000. D. $60,000.
Suppose that the quantity of pizza demanded decreased by 15 percent after an increase in price of 10 percent. What is the price elasticity of demand for pizza?
A) 1.50 B) 0.67 C) -1.50 D) -0.67
Suppose Motorland's government imposes a tax of $1.50 per gallon of gasoline sold. With the tax, when the market is in equilibrium, the deadweight loss is
A) zero. B) $37,500 per month. C) $150,000 per month. D) $75,000 per month.
Season ticket holders for the St. Louis Rams received a surprise when they read the applications forms to renew their season tickets. In order to get their season ticket to the Rams' home games, they also had to buy tickets to the preseason games
Many season ticket holders grumbled about this practice as an underhanded way for the St. Louis Rams to get more money from its season ticket holders. This practice is an example of: A) peak-load pricing. B) intertemporal price discrimination. C) two-part tariff. D) bundling. E) Both A and B are correct.