A country has an aggregate production function of the form: Y = A x K1/3 x H2/3
Which of the following is likely to happen if the capital stock and the efficiency units of labor available to the country increases by 10% over a span of 5 years while the state of technology used in the country remains the same?
A) Output will increase by 5%. B) Output will double.
C) Output will increase by 10%. D) Output will increase by 1%.
C
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The purchase of a new house is included in
A) government purchases. B) investment expenditures. C) net exports. D) consumption expenditures.
Holding other factors constant, increasing the availability of disability benefits would likely
A) decrease cyclical unemployment and the natural rate of unemployment. B) increase structural unemployment and the natural rate of unemployment. C) increase frictional unemployment and the natural rate of unemployment. D) decrease the natural rate of unemployment.
An economic model
a. omits critical elements b. must be presented in mathematical terms c. simplifies reality in order to focus on its essential elements d. can never be proven wrong if its assumptions are realistic e. produces poor predictions if it includes an unrealistic assumption
Over the long run, monopolies can earn
A) economic profit. B) normal profit only. C) accounting profit only. D) no economic profit.