An increase in the stock of human capital would
a. shift the production function upward, lowering productivity and raising living standards
b. shift the production function upward, raising productivity and living standards
c. cause the economy to move along a fixed production function, increasing both productivity and living standards
d. cause the economy to move along a fixed production function, reducing both productivity and living standards
e. shift the production function downward, reducing both productivity and living standards
B
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In a market-based economy, the government
A) allocates production. B) enforces property rights. C) encourages insurance risk. D) decides how much to produce.
A university offers a free shuttle service around campus. The opportunity cost of the shuttle service to the university is equal to: a. zero, since it is free to students who want to ride
b. the wages paid to the shuttle drivers. c. the wages paid to the shuttle drivers, plus the gasoline expenses. d. the highest valued alternative use of the resources devoted to the shuttle program.
Compared to other firms, firms that sell highly differentiated products likely incur significant costs associated with
a. advertising. b. the product-variety externality. c. intermediate materials. d. taxes and regulation.
Soon after he became the chairman of the Federal Reserve System in 1979, Paul Volcker embarked on a course
a. of accommodative monetary policy. b. of disinflation. c. that was designed to reduce the unemployment rate. d. that produced results that were clearly consistent with those predicted by rational-expectations theorists.