When a low-income nation improves its institutions, so that growth results, one reason the growth may be more rapid than would result from a similar improvement in a developed nation that brings the same amount of added capital per worker to each nation, is that
a. adding capital has constant returns to scale, rather than diminishing returns, in each nation.
b. with diminishing returns to scale, and with richer nations starting with more capital per unit labor, the added capital produces smaller increments to production in the higher-income nations.
c. wage rates are lower in the low-income nation, and lower-income workers are more productive.
d. capital is always more productive in lower-income nations.
B
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Economic growth is determined by forces outside the control of the market system.
Answer the following statement(s) true (T) or false (F)
During the mid-2000s, the average price of a used car fell by nearly $500 and the quantity sold nation-wide decreased by several thousands each year. This set of results is a contradiction of the law of demand
Indicate whether the statement is true or false
The overall drop in stock prices that began in 1929 and continued through 1932 was due to:
A. the exuberant confidence in the rising value of the stock market in general. B. a panicked massive sale of stocks which caused the stock prices to plummet. C. the decline in profitability of companies. D. dropping stock prices causing a rational sale of certain stocks.
To sell more units, a monopolist must
A. lower price. B. merely produce more units. C. advertise more. D. raise product quality.