In the steady-state diagram of the Solow model, an increase in saving per worker is shown by
A) shifting the saving-per-worker curve down, resulting in a lower steady-state capital—labor ratio.
B) shifting the saving-per-worker curve up, resulting in a higher steady-state-capital—labor ratio.
C) shifting the saving-per-worker curve up, resulting in a lower steady-state capital—labor ratio.
D) shifting the saving-per-worker curve down, resulting in a higher steady-state capital—labor ratio.
B
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According to Say's law, there cannot be overproduction of goods and services because:
A. planned aggregate expenditures sometimes fall short of total output. B. prices and wages are "sticky" or inflexible in the downward direction. C. demand creates its own supply. D. supply creates its own demand.
If an individual has a comparative advantage in the production of a good, then this individual has the
A. greatest desire for the good. B. lowest opportunity cost in the production of the good. C. highest opportunity cost in the production of the good. D. same opportunity cost in the production of the good.