A nation's standard of living, as measured by real GDP per person, increases:
A. only if the share of population employed increases.
B. if either average labor productivity and/or the share of population employed increase.
C. only if both average labor productivity and the share of population employed increase.
D. only if average labor productivity increases.
Answer: B
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Some critics of capitalism argue that
a. There is too much government intervention in the economy b. Involuntary trade generates no wealth c. If one person makes money, someone else must be losing it d. Voluntary trade ensures gains for both consumers and producers
A monopoly producer of a durable good:
a. can earn even greater profits than a producer of a non-durable. b. must consider competition from its own output decisions. c. will have higher marginal costs than most other monopolies. d. will not set marginal revenue equal to marginal cost.
Which of the following is the best definition of money?
a. anything generally accepted as a payment for goods or repayment of debt b. anything that is a liability of the federal government c. anything that is a liability of a commercial bank d. coins and currency in the hands of the public
The net change in quantity demanded of a good following a price change
a. is equivalent to the substitution effect b. is equivalent to the income effect c. must decrease as marginal utility rises d. is negative only when the income effect is negative e. reflects both the substitution and income effects