(Figure: Productivity) Look at the figure Productivity. An improvement in technology with everything else remaining unchanged is shown on the diagram as a movement from
What will be an ideal response?
B to C
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Structuralists believe the main cause of inflation is
a. rigidities in the economy's supply capabilities b. lack of sufficient aggregate demand c. weak position of labor unions d. government intervention in financial markets e. all of the above
Consider a profit-maximizing monopoly pricing under the following conditions. The profit-maximizing quantity is 40 units, the profit-maximizing price is $160, and the marginal cost of the 40th unit is $120 . If the good were produced in a perfectly competitive market, the equilibrium quantity would be 50, and the equilibrium price would be $150 . The demand curve and marginal cost curves are
linear. What is the value of the deadweight loss created by the monopolist? a. $40 b. $100 c. $200 d. $400
A country is most likely to have a comparative advantage in the production of cars if:
A. its citizens prefer driving cars to other forms of transportation. B. it imports most of the raw materials necessary to produce cars. C. it has strict environmental protection laws governing automobile emissions. D. it has a relative abundance in the natural resources needed to produce cars.
Suppose Country A, a labor-abundant country, produces only wheat and cloth. The following equations illustrate the prices and costs of wheat and cloth in the country. The numbers indicate the amounts of labor and land needed to produce a unit of wheat and cloth. 'W' is the wage rate and 'r' is the rental rate of land.Price of wheat = 1w + 2rPrice of cloth = 2w + 1rSuppose Country A engages in free trade and the price of cloth increases to $4 per unit. However, the price of wheat remains unchanged. Under such a situation, the Stolper-Samuelson theorem will predict that
A. the purchasing power of both the landowners and the laborers will increase. B. the purchasing power of the laborers will increase but that of the landowners will decline. C. the real income of both the landowners and the laborers will decline. D. the real income of the landowners will increase but that of the laborers will remain unchanged.