Suppose that population grows by 2 percent annually. For the standard of living to rise, which of the following must occur?
a. Nominal GDP must grow by more than 2 percent.
b. Real GDP must grow by more than 2 percent.
c. Real GDP per capita must grow by more than 2 percent.
d. Consumption spending must grow by more than 2 percent.
e. Private investment spending must grow by more than 2 percent.
B
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As extraction of a nonrenewable resource increases, the supply curve shifts up because:
a. more substitutes become available. b. competition among the existing suppliers intensifies. c. the marginal cost of extracting any given amount increases. d. the resource finds alternative usage. e. the resource becomes less productive.
With economies of scale, a firm can continue to lower its cost per unit by increasing output
a. without limit b. up to the minimum efficient scale c. until the firm is meeting market demand single-handedly d. to some point between the minimum efficient scale and the market demand curve e. halfway to the minimum efficient scale
Any policy change that results in a Pareto-superior allocation
A) will increase welfare under certain conditions. B) must increase welfare. C) will leave welfare unchanged. D) will have an unpredictable effect on welfare.
If Ben values good X more than good Y, and Catherine values good Y more than good X, a firm can increase its profits by
A) charging the same price for both goods. B) bundling the goods. C) selling the goods in a competitive market. D) charging one price per good.