Classical growth theory predicts that increases in
A) competition increase economic growth.
B) real GDP per person are temporary and not sustainable.
C) resources permanently increase real GDP per person.
D) real GDP per person are permanent and sustainable.
E) resources permanently increase labor productivity.
B
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If the price of mozzarella cheese (an ingredient in pizzas) declines due to a major technological breakthrough in the dairy industry, there would be:
A) a decrease in the supply of pizza. B) an increase in the supply of pizza. C) an increase in the quantity of pizza supplied. D) no change in the supply of pizza.
The most important factor in determining the long-run profit potential in monopolistic competition is
A) free entry and exit. B) the elasticity of the market demand curve. C) the elasticity of the firm's demand curve. D) the reaction of rival firms to a change in price.