What are the primary sources of economic growth? Why are our real incomes and living standards today so much higher than those of our great grandparents 50 or 100 years ago? Why is the income per person so much higher in some countries than others?
The major sources of economic growth are gains from trade, discovery of new products and better ways of doing things, and capital formation. Trade makes gains from division of labor and economies of scale possible. Discovery and development of improved technologies and products help people produce more and achieve higher income levels. Investment in physical Capital provides machines, tools, and structures that will make it possible to generate more output in the future. These three factors are the major reason why our output and income levels are so much higher than those of our great grandparents 50 or 100 years ago. They are also the reason why the income levels of some countries are so much higher than others.
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A barrier to entry
A) makes it illegal for firms to enter the industry. B) can be thought of as unrelated to monopoly. C) slows or even prevents entry into a market. D) usually takes the form of a cartel.
A loss in economic efficiency occurs when production of a good is above the equilibrium quantity
a. True b. False Indicate whether the statement is true or false
Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y2. C. P3 and Y1. D. P2 and Y3.
Which of the following is true?
A. A nation cannot have a comparative advantage in the production of every good. B. A nation cannot have an absolute advantage in the production of every good. C. A nation can have a comparative advantage in the production of every good, but not an absolute advantage. D. A nation can have a comparative advantage in the production of a good only if it also has an absolute advantage. E. A nation cannot have an absolute advantage in the production of a good unless it also has a comparative advantage.