A recent study at a liberal arts college concluded that demand elasticity is 0.91 for college courses. The administration is considering a tuition increase to help balance the budget. An economist might advise the school to:
a. decrease tuition in order to increase revenue by boosting enrollment
b. increase tuition in order to increase revenue.
c. leave tuition unchanged as a change in tuition is unlikely to enhance the school's budget by increasing revenue.
d. decrease tuition because demand for courses is elastic.
b
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If capital per hour of labor decreases, real GDP per hour of labor
A) decreases because the level of technology decreases. B) increases because the level of technology increases. C) increases for a given level of technology. D) decreases for a given level of technology.
Which of the following is an example of a measure of labor productivity?
A) Farm workers produce 30 bushels of wheat per worker per day. B) Autos get 30 gallons to the mile. C) The growth rate of per capita real GDP is 3.5 percent per year. D) Wages increase by 3.5 percent per year for 5 years.