A small economy increased its capital per hour worked (K/L) from $40,000 to $50,000. As a result, real GDP per worker (Y/L) grew from $20,000 to $25,000
If the economy increases its capital per hour worked by another $10,000 to $60,000, but there is no change in technology, by how much more and in what direction will output per worker change?
A) Output per worker will increase by less than $5,000.
B) Output per worker will increase by exactly $5,000.
C) Output per worker will fall by more than $5,000.
D) Output per worker will increase by more than $5,000.
A
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Which of the following examples would most likely result in high costs for workers?
a. Sports equipment production remains steady with just enough job applicants to meet demand. b. Computer job openings have an overflow of applicants with computer science degrees. c. An agricultural recession results in a widespread lay off of farm workers. d. A diamond mining boom causes skilled miners to be in short supply.
If a production possibilities frontier is a downward sloping straight line, it
A. shows that there are no trade-offs in the production process. B. shows that resources are not efficiently allocated C. shows that production on the frontier implies that it is not possible to produce more of anything without producing less of something else. D. shows that resources are unemployed.