Define the following terms:
a. Human capital
b. Investment
c. Capital formation
d. Property rights
a. Human capital is the amount of skill embodied in the workforce. It is most commonly measured by the amount of education and training.
b. Investment is the flow of resources into the production of new capital. It is the labor, steel, and other inputs devoted to the construction of factories, warehouses, railroads, and other pieces of capital during some period of time.
c. Capital formation is synonymous with investment. It refers to the process of building up the capital stock.
d. Property rights are laws and/or conventions that assign owners the rights to use their property as they see fit (within the law)?for example, to sell the property and to reap the benefits (such as rents or dividends) while they own it.
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The "law of demand" states that, other things remaining the same, the quantity demanded of any good is
A) inversely related to its price. B) directly related to its price. C) positively related to its price. D) directly related to the supply of the good.
According to a new Keynesian theorist, a correctly anticipated increase in aggregate demand will
A) cause the price level to increase by a greater amount in the short run than what a new classical rational expectations theorist would predict. B) cause the price level to increase by a smaller amount in the short run than what a new classical rational expectations theorist would predict. C) cause the price level to increase by the same amount in the short run that a new classical rational expectations theorist would predict. D) leave the price level unchanged in the short run, but Real GDP will increase more than what a new classical theorist would predict. E) leave the price level unchanged in the short run, but Real GDP will increase less than what a new classical theorist would predict.
In the short run a manufacturing firm's production equipment is a sunk cost.
Answer the following statement true (T) or false (F)
Draw the supply curve for a good whose price elasticity of supply is equal to zero. Be sure to label both axes.
What will be an ideal response?