Classical growth theory predicts that increases in real GDP per person will
A) last because people make choices in the pursuit of higher profits.
B) not last because higher income encourages smaller families and a lower population growth rate.
C) not last because higher income leads to a population explosion.
D) last because higher growth leads to new technology.
E) last only if the government directs firms to make more investments in capital and new technology.
C
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A change in taxes of a given amount affects an individual's consumption spending by less than that amount, because the marginal propensity to consume is less than 1
a. True b. False Indicate whether the statement is true or false
Gomer decides to spend an hour playing basketball rather than studying. His opportunity cost is:
a. nothing, because he enjoys playing basketball more than studying. b. the increase in skill he obtains from playing basketball for that hour. c. the benefit to his grades from studying for an hour. d. nothing, because he had a free pass into the sports complex to play basketball.
The marginal productivity theory of distribution holds that
A. each factor is paid what it deserves. B. the owner of each factor is paid the amount that the factor contributes to earnings. C. each factor’s income depends on how hard it works. D. each factor receives an equal share of the revenue from production.
What determines the equilibrium wage and quantity for labor in competitive markets?
a. the intersection of the market supply of labor and the market demand for labor b. the influence of union-negotiated wages and limits on working hours c. the intersection of minimum wage and the market demand for labor d. the balance of substitution effect and the income effect