What is one way to measure technological progress?
(A) Any increases in labor minus increases in capital.
(B) Total growth plus increases in capital and labor.
(C) Total growth minus increases in capital and labor.
(D) Any increases in capital minus increases in labor.
Ans: (C) Total growth minus increases in capital and labor.
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Suppose that the country of Pacifica sold its cars in Atlantica for less than it costs to produce the cars. Pacifica could be accused of
A) avoiding import quotas. B) increasing its gains from trade. C) dumping. D) engaging in learning-by-doing.
On a vacation to China, you find yourself eating every meal at the local Burger King rather than buying a meal from one of the street vendors. Your traveling companion claims that you are irrational, since you never eat Burger King hamburgers when you are home, and Burger King's hamburgers cost more than the meals prepared and sold by China's street vendors. An economist would most likely explain
your behavior by suggesting that a. your behavior is rational, but your friend's behavior is clearly irrational. b. you are clearly irrational, but your friend's behavior is rational. c. the Burger King brand name suggests consistent quality. d. the advertising by Burger King in China is more persuasive than the advertising by Burger King in your home town.