An assumption of the neoclassical theory of growth is that
A) people receive only subsistence real GDP per person.
B) all technological advances are the result of chance.
C) the marginal product of all types of capital increases as more capital is accumulated.
D) knowledge has diminishing returns.
B
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Answer the following statement(s) true (T) or false (F)
1. In Average and Marginal Costs, the firm will reach peak production when the AFC curve reaches zero.
2. When a firm’s marginal product rises, its marginal cost rises in proportion.
3. When a firm’s marginal product is increasing, its average cost is decreasing.
4. In an appliance factory, the average cost of producing a refrigerator will be relatively high both when very few units are being produced and when production output is especially large.
5. Economists define the long run as anything more than one year in the future.
In the horizontal segment of the aggregate supply curve, when GDP:
A. increases, the price level rises. B. decreases, the price level falls. C. increases, the price level does not change. D. increases, the price level falls.