"When workers have a relatively small quantity of capital to use in producing goods and services, giving them an additional unit of capital increases their productivity by a relatively large amount.". This statement
a. is an assertion that production functions have the property of constant returns to scale.
b. is consistent with the view that capital is subject to diminishing returns.
c. is inconsistent with the view that it is easier for a country to grow fast if it starts out relatively poor.
d. All of the above are correct.
b
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Which of the following activities creates a negative externality?
A) cleaning up a public garden in your neighborhood B) graduating from college C) keeping an old refrigerator on your front porch D) using a pooper-scooper every time you walk your dog
Strategic complementarities may help explain business cycles because such complementarities may lead to
A) decreasing returns to scale. B) constant returns to scale. C) increasing returns to scale. D) a downward-sloping labor supply curve.