Over a business cycle, the quantities of capital, human capital, and entrepreneurial talent
A) change gradually and do not fluctuate much.
B) cycle alongside real GDP.
C) are completely unpredictable and cannot be forecast.
D) cycle more than real GDP.
E) are constant and do not change.
A
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Scott is a manager at a pool cleaning business. He has hired 10 workers to clean pools for him and is considering what type of payment scheme he should set up for his workers. He can pay each of his workers $10 per hour to clean pools, or he can pay his
workers $20 for each pool a worker cleans. (It takes 2 hours, on average, for an employee to clean a pool thoroughly.) If Scott wants to maximize the number of pools his workers clean in one day, which payment scheme should he use? Explain. What will be an ideal response?