Economic growth is equal to:
a. total factor productivity plus amounts of resources.
b. growth in total factor productivity plus growth in amounts of resources.
c. total factor productivity minus marginal factor productivity.
d. real GDP plus national output.
e. GNP plus GDP.
b
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The United States can produce both grain and oil more efficiently than Mexico can, but the United States can produce grain more efficiently than oil. Therefore, according to _______ , a basis for trade exists between the two countries.
A) free trade B) demand C) supply D) comparative advantage
Consider the following hypothetical scenarios:
Scenario A: You are about to purchase a pair of 7 for All Mankind jeans for $175 and a t-shirt for $45. The sales attendant at the store tells you that the pair of jeans you wish to buy is on sale for $160 at another store, located about a 20-minute drive away. Scenario B: You are about to purchase a pair of 7 for All Mankind jeans for $175 and a t-shirt for $45. The sales attendant at the store tells you that the t-shirt you wish to buy is on sale for $30 at another store, located about a 20-minute drive away. Based on standard economic theory, under which scenario would you make the 20-minute trip to the other store? A) Scenario A because the pair of jeans is a very expensive item and $15 saving is quite substantial B) Scenario B because a $15 saving amounts to a substantial discount (about 33 percent) C) in either scenario if I think a $15 savings is worth the 20-minute trip D) in none of these scenarios if I think the $15 saving is not worth the 20-minute trip E) C and D are correct answers.