What are ITQs? Where are they used?
What will be an ideal response?
An ITQ, or individual transferable quota, is a production limit that is assigned to an individual who is free to transfer the quota to someone else. ITQs are used to deal with the problem of commons where producers are hard to monitor and where marginal costs differ across producers.
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If a 1 percent increase in price causes a 2 percent increase in quantity supplied, then supply is
A) elastic. B) inelastic. C) unit elastic. D) infinite.
Which of the following is true of perfectly competitive firms?
a. For a perfectly competitive firm, as long as the price derived from expanded output exceeds the marginal cost of that output, the expansion of output creates additional economic profits. b. Producing at the profit-maximizing output level means that a firm is actually earning economic profits c. A competitive firm earning zero economic profit will be unable to continue in operation over time. d. A perfectly competitive firm will operate in the short run only at price levels greater than or equal to average total costs.
Answer the following statements true (T) or false (F)
1. A shift outward in the production possibilities curve is the direct result of improvements in the efficiency factor of economic growth. 2. Total output for an economy is basically equal to total work-hours multiplied by labor productivity. 3. If an economy has 800,000 work-hours employed, and its labor productivity is $16/hour, then its real GDP must be $50,000. 4. Since the 1950's, the U.S. average annual rate of growth of real GDP was higher than the average annual growth of real GDP per capita. 5. Increased labor productivity has been less important as a source of growth than the increased labor inputs in the U.S. economy since the 1950's.
What generates economic growth?
What will be an ideal response?