Suppose that an economy grows by 4 percent, total factor productivity grows by 3 percent, and the labor force increases by 6 percent. If labor and capital are the only inputs and labor contributes 40 percent to GDP, then the stock of capital must have _____
a. fallen by 5%
b. fallen by 3.33%
c. fallen by 2.33%
d. risen by 3%
e. risen by 1.8%
c
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An increase in the world relative demand for U.S. output causes
A) a short-run real depreciation of the dollar against the euro. B) a long-run real appreciation of the dollar against the euro. C) a long-run real depreciation of the dollar against the euro. D) a short-run real appreciation of the euro against the dollar. E) a long-run real appreciation of the euro against the dollar.
If a competitive firm's marginal costs always increase with output, then at the profit maximizing output level, producer surplus is
A) zero because marginal costs equal marginal revenue. B) zero because price equals marginal costs. C) positive because price exceeds average variable costs. D) positive because price exceeds average total costs. E) positive because revenues are increasing faster than variable costs.
Which of the following statements about Nash equilibrium is true?
a. Every finite game has more than one Nash equilibrium. b. A pair of dominant strategies in a price-fixing game is always a Nash equilibrium. c. A dominance solvable game does not have a Nash equilibrium. d. Games with an infinite number of strategies have multiple Nash equilibria.
Why would a bumper crop be bad news for farmers?
A. Their crop has an inelastic demand, and the resulting drop in price reduces their total revenue. B. Their crop has an elastic demand, and the resulting drop in price reduces their total revenue. C. Their crop has an inelastic demand, and the resulting drop in price raises their total revenue. D. Their crop has an elastic demand, and the resulting drop in price raises their total revenue.