Investment in both physical and human capital tends to enhance economic growth because it generally
a. increases consumption during the current period.
b. makes it possible for individuals to produce more goods and services per hour worked.
c. encourages firms to expand output by employing more low productivity workers.
d. encourages workers to unionize and thereby fight for higher wages.
B
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The difference between the cost of raw materials and the price of the final good is known as
a. value added. b. capital consumption allowance. c. a transfer payment. d. net national product.
Assume a two-country, two-commodity, and two-input model. Let the two countries in this model be the United States and the Rest of the World and the two goods being produced by each of the countries be steel and wheat. The two factors of production used in producing the goods in each country are capital and land. If the United States is capital-abundant and steel production is capital-intensive, the Heckscher-Ohlin model would predict that the United States would
A. export wheat and import steel. B. import both the goods from the Rest of the World. C. export both the goods to the Rest of the World. D. export steel and import wheat.
An economy in which output has decreased and prices have decreased would suggest a:
A. decrease in short-run aggregate supply. B. increase in aggregate demand. C. increase in short-run aggregate supply. D. decrease in aggregate demand.
The marginal cost curve passes through the ________ points of the ________ cost curve and the ________ cost curve
A) minimum; average total; average variable B) minimum; average total; average fixed C) maximum; total cost; total variable D) minimum; average variable; average fixed