Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 25, Problem 4MCQ
To determine
To find:
The option that correctly explains the effect of an increase in capital per hour of labor due to the increase in real
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Why does adding capital to a production function make the economy more productive? What are diminishing returns to capital? How does technology affect productivity and growth?
For a given level of technology, the level of labor productivity would increase in all of the following situations except when:
A. there is an increase in natural resources per worker
B. there is an increase in human capital per worker
C. there is an increase in physical capital per worker
D. there is an increase in labor
In the Cobb-Douglas production function, Y = K°L!-a, if a = 1/4, then
O labor's share of GDP is half.
O capital's share of GDP is one-fourth.
capital's share of GDP is three-fourths.
capital's share of GDP is four.
Chapter 25 Solutions
Foundations of Economics (8th Edition)
Ch. 25 - Prob. 1SPPACh. 25 - Prob. 2SPPACh. 25 - Prob. 3SPPACh. 25 - Prob. 4SPPACh. 25 - Prob. 5SPPACh. 25 - Prob. 6SPPACh. 25 - Prob. 7SPPACh. 25 - Prob. 8SPPACh. 25 - Prob. 9SPPACh. 25 - Prob. 10SPPA
Ch. 25 - Prob. 11SPPACh. 25 - Prob. 12SPPACh. 25 - Prob. 1IAPACh. 25 - Prob. 2IAPACh. 25 - Prob. 3IAPACh. 25 - Prob. 4IAPACh. 25 - Prob. 5IAPACh. 25 - Prob. 6IAPACh. 25 - Prob. 7IAPACh. 25 - Prob. 8IAPACh. 25 - Prob. 9IAPACh. 25 - Prob. 10IAPACh. 25 - Prob. 1MCQCh. 25 - Prob. 2MCQCh. 25 - Prob. 3MCQCh. 25 - Prob. 4MCQCh. 25 - Prob. 5MCQCh. 25 - Prob. 6MCQCh. 25 - Prob. 7MCQCh. 25 - Prob. 8MCQ
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- Consider the per-worker production function graph. If there is an increase in capital per hour worked, holding technology constant, then A. there is a movement from A to B. B. there is a movement from A to C. C. there is a movement from B to D. D. there is a movement from D to C. If there is an increase in technology, holding constant the quantity of capital per hour worked, then A. there is a movement from C to D. B. there is a movement from A to B. C. there is a movement from D to B. D. there is a movement from A to C. C Real GDP per hour worked (Y/L) 10- Y/L2 Y/L₁ Per-Worker Production Function C 3 B Per Worker Production Function 1 K/L₁ K/L₂ Capital per hour worked (K/L) 10arrow_forwardWhich of the following would not affect labor productivity, i.e. more output per unit of labor hour? Select one: a. When interest rates decrease and government spending increase. b. when labor is reallocated from less-efficient industries to more-efficient industries. c. when production is better organized and managed d. technological progress e. the health, training, education, and motivation of workers improve f. the quantity of capital goods available to workersarrow_forwardCountries X and Y have the same amount of labour and the same level of technology, but country X has less capital. Country X's labour productivity will be __________ Y's and its total factor productivity will be __________ Y's. higher than; lower than higher than; the same as the same as; lower lower than; lower than lower than; the same asarrow_forward
- 1. Over the period from B.C. 10,000 to A.D. 1, the world population is estimated to have increased from 4 million to 170 million, while the level of income per capita was constant over time. Assuming that the quantities of human and physical capital per worker did not change, and that the exponent on land in the production function is one-third, calculate the growth rate in productivity over this period. What was the annual growth rate of productivity, A?arrow_forwardFor each part below, determine whether the following actions will increase or decrease productivity, and name the component of productivity that each affects. a. The local government builds a new school. b. Teachers in the new school hold classes for young students. c. A manufacturer installs robots on its assembly line. d. A research team designs a more efficient system of irrigation. e. A soda company discovers a new source of underground water that can be used to make its products. f. A professor writes a new and improved economics textbook. g. A large number of people have less access to health care. h. A worker receives on-the-job training to be a mechanic. Impact on productivity (Click to selec (Click to selec (Click to selec (Click to selec (Click to selec (Click to selec (Click to selec (Click to selec ✓ Component of productivity (Click to select) Physical capital Technology Human capital Natural resources (Click to selec (Click to selec (Click to select) (Click to selec (Click…arrow_forwardWhy do Urban populations are capital accumulating whereas rural populations are capital consuming?arrow_forward
- ı need only c and d optionarrow_forwardIf capital per worker decreases, real GDP per hour of labour Answers: increases because the level of technology increases. decreases because the level of technology decreases. increases for a given level of technology. decreases for a given level of technology. none of the abovearrow_forwardAn increase in labor productivity means businesses will produce more output with the same amount of labor. Explainarrow_forward
- QUESTION 37 ROBOTS 60 50 40 30 20 10 0 a 10 b 20 C 30 40 50 BEFR 37. Assuming robots represents capital goods and beer consumer goods, and the growth path of country 1 is from point (a) to (b) to (c), while country 2 goes from points (d) to (e) to (f), what can you conclude about these countries? a) Country 1 has a higher savings rate b) Country 2 starts out with a higher standard of living c) Country 2 has a higher rate of growth d) Both (a) and (b) are correct e) None of the abovearrow_forwardWhich one is true? labor productivity will be higher when the capital stock is larger and the rate of change in labor productivity remains the same as capital stock goes up. labor productivity will be higher when the capital stock is larger and the rate of change in labor productivity increases as capital stock goes up. labor productivity will be lower when the capital stock is larger and the rate of change in labor productivity remains the same as capital stock goes up. labor productivity will be higher when the capital stock per worker is larger but the rate of change in labor productivity will eventually decrease as capital stock per worker goes up.arrow_forwardQuestion 5 Sort the items below according to whether they promote economic growth, inhibit economic growth, or have no effect on economic growth A. The use of competitive markets to allocate goods and services A. Promote economic growth A. The creation of a price floor on sugar B. inhibit economic growth A. Laws preventing industrial espionage C. No effect on economic growth Clear laws regarding the transfer of property A corrupt government The development of regulations that make creating a small business difficult A. B. B. B. A nation's central bank declares it will print money to pay for government expenditures. A Moving to another question will save this response. O D 2: hp 51°Farrow_forward
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