How does the phenomenon of diminishing returns to capital explain the catch-up effect?
When an economy initially has a small amount of capital, additions to capital substantially raise workers' productivity, making it possible for poor countries with little capital to "catch up" with richer countries.
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In the long run, a perfectly competitive industry is allocatively efficient because
a. the opportunity cost of resources needed to produce the last unit of output just equals the marginal value to consumers of the last unit b. it maximizes producer surplus c. consumer surplus could be larger if the price were lower d. production occurs at the lowest average total cost e. marginal costs are low
Refer to the below table. What would the wage rate be if all the workers could work in all three labor markets, and they get spread out evenly?
Suppose there are only three labor markets (A, B, and C) in the economy and each of these markets is purely competitive. The table below contains the demand (or marginal-revenue-product) schedule for labor in each of these three markets. Assume there are 24 million homogeneous workers in the economy and that one-half of these workers are male and one-half are female
A. $7.00 for females and $13.00 for males
B. $8.00 for females and $11.00 for males
C. $11.00 for females and $11.00 for males
D. $13.00 for females and $13.00 for males