Sustained growth refers to a growth process: A) where growth in GDP per capita is attributed primarily to public sector firms and enterprises. B) where GDP per capita grows at a positive and steady rate for long periods of time. C) where growth in GDP per capita is translated into equal increase in welfare for […]
Date: September 2nd, 2020
According to the Keynesian model, the short-run aggregate supply (SRAS) curve is horizontal when A) prices react to an aggregate demand shock but real Gross Domestic Product (GDP) does not. B) there are no unemployed resources and wages do not change when prices change. C) there are unemployed resources and prices do not fall when […]
Date: September 2nd, 2020
The reason that the government offers inventors exclusive rights to their product for a period of time is to A) promote innovation. B) increase profits of certain companies. C) maximize consumer utility. D) reduce market concentration. ANSWER A
Date: September 2nd, 2020
The arithmetic value of (1 – MPC) equals A) MPS. B) APS. C) APC. D) NDP. ANSWER A
Date: September 2nd, 2020
When a market is in equilibrium, both buyers and sellers do not perceive a benefit from changing their behavior. Why? What will be an ideal response? ANSWER In most economic situations, an economic agent is not optimizing individually. His decision is influenced by the decisions taken by other economic agents. In equilibrium, each and […]
Date: September 2nd, 2020
Define marginal cost. Is it different from the concept of willingness to accept? What will be an ideal response? ANSWER Marginal cost in production refers to the extra cost incurred in producing an additional unit of a commodity. Willingness to accept is the lowest price that a firm is willing to receive to sell […]
Date: September 2nd, 2020
The implied growth rate for a country between 1960 and 2010 is 6%. This implies that: A) the country needed to grow at an average rate of 6% per year between 1960 and 2010 to reach the 2010 level of GDP starting with the 1960 level. B) the country needed to grow by at least […]
Date: September 2nd, 2020
Suppose the market for pizza slices is in equilibrium at a price of $1 per slice. What conditions are likely to be satisfied in the pizza slice market? What will be an ideal response? ANSWER The conditions that are satisfied when the market for pizza slices is in equilibrium are: a) The number of […]
Date: September 2nd, 2020
How are the following events likely to affect the market supply of rice in an economy? a) A fall in the wage rate of farm labor b) An increase in the productivity of farm capital due to better technology c) An increase in the use of agricultural land for non-agricultural purposes ANSWER a) A […]
Date: September 2nd, 2020
Economic growth occurs when there is A) lower taxes on individuals. B) growth in government spending. C) growth in technology that increases productivity. D) more environmental regulation. ANSWER C
Date: September 2nd, 2020
