If a nation’s productivity grows by 3% rather than 1.5% over many years, what will be the difference in the nation’s standard of living? Explain.
What will be an ideal response?
The answer is based on the rule of 70. A 3% increase in labor productivity means that the standard of living in an economy will double in about 23 years (70/3). An increase in labor productivity that is 1% less, or 1.5%, means that it will take 47 years (70/1.5) for the standard of living to double.
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In the above figure, if the market is competitive and unregulated, then at the equilibrium amount of output the marginal social benefit is
A) less than the marginal cost to producers. B) greater than the marginal social cost. C) equal to the marginal cost to producers. D) equal to the marginal private benefit from consumption.
At a Nash equilibrium: a. each firm is said to be doing as well as it can, regardless of the actions of its competitor. b. each firm is said to be doing as well as it can, given the actions of its competitor
c. firms always choose strategies in order to maximize the social welfare. d. firms always choose strategies to avoid the worst possible outcome.