Explain each of the following: (1 ) constant returns to scale; (2 ) decreasing returns to capital; and (3 ) decreasing returns to labor
What will be an ideal response?
All three of these things refer to characteristics of the production function. CRS means that if all inputs change by the same proportion, the level of output will change by the same proportion. Decreasing returns to capital and labor indicates that increases in either resource will cause output to increase but at a decreasing rate.
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A country's production possibilites increase because the available workers become more skilled at using a computer. This is an example of growth caused by:
a) global resources b) physical capital c) technology d) production opportunity
The movements of real GDP and inflation during the 1973-1975 recession can be best explained by a:
a. rightward shift of the aggregate demand curve. b. leftward shift of the aggregate demand curve. c. rightward shift of the aggregate supply curve. d. leftward shift of the aggregate supply curve.