A ten percent increase in total factor productivity A will increase ________
A) the marginal product of capital (MPK) by ten percent
B) the marginal product of labor (MPL) by ten percent
C) output by ten percent
D) all of the above
E) none of the above
C
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Kevin is a student who is yet to join a university in California. In the evening, he takes music lessons. Kevin has to decide on an apartment to rent
The apartment should be at a suitable distance from two places: his university, and from his music classes. The commuting time from apartments in four different locations to both destinations are shown in the table below. Given that Kevin's opportunity cost of time is $10 per hour, find his optimum choice using: a) optimization in levels. b) optimization in differences. Apartment Commuting Time to University (hours per month) Commuting Time to Music Classes (hours per month) Rent ($ per month) 1 10 10 2,500 2 16 24 2,200 3 36 24 1,900 4 45 35 1,800
According to the factor price equalization theorem, if country B is labor abundant, then if country B initiates trade with country A
A) wages and rents should fall in A. B) rents and rents should rise in A. C) wages should rise and rents should fall in A. D) wages should fall and rents should rise in A.
Which of the following statements is positive?
A. Higher taxes are needed to support education. B. Large budget surpluses should be avoided. C. A tax cut that benefits high-income households is acceptable. D. Tax increases tend to discourage saving.
Which of the following is a main source of increasing returns in recent years?
A. More learning by doing B. The concentration of development costs C. The use of less specialized inputs as firms grow D. More resources devoted to agricultural production