Using the rule of 70, a sustained 3 percent per year real GDP growth rate will
A) last for 70 years.
B) double the current level of real GDP in about 23 years.
C) double the current level of real GDP in about 210 years.
D) double the current level of real GDP in about 70 years.
E) double the current level of real GDP in about 40 years.
B
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If a monopolistically competitive firm is producing 450 units of output and at this output level, the price is $15 and the average total cost is $12, the firm profit/loss is equal to ________.
A) -$1,525 B) $1,350 C) -$1,350 D) $1,525
Which statement best characterizes the second-best policy offered by a monopoly insurer when it can't observe the consumer's risk?
a. It is a single contract offering partial insurance at an intermediate price such that all types are served. b. It is a menu of contracts providing full insurance for the least risky types and partial insurance for higher risks. c. It is a menu of contracts providing full insurance for the riskiest type and partial insurance at lower prices for lower risks. d. The market breaks down since the monopolist cannot design contracts without observing each consumer's risk.
People would not choose to specialize because:
A. it can lead to more consumption than being self-sufficient. B. it can lead to consumption beyond the production possibilities frontier. C. it allows people to acquire goods at a lower opportunity cost. D. production standards are harder to control if goods are imported from other countries.
Firms may react to a payroll tax by
A. hiring more labor. B. reducing their output. C. shifting to less capital intensive techniques. D. substituting labor for capital.