Four possibilities have probabilities 0.4, 0.2, 0.2 and 0.2 and values $80, $30, $0, and -$80 respectively. The expected value is:

In Solow's exogenous growth model, the economy reaches a stable steady state because

A) the marginal return of capital is decreasing. B) capital is growing at a constant rate. C) the substitution effect is stronger than the income effect. D) conditional convergence holds.

The price elasticity of supply measures how:

A. easily labor and capital can be substituted for one another in the production process. B. responsive the quantity supplied of X is to changes in the price of X. C. responsive the quantity supplied of Y is to changes in the price of X. D. responsive quantity supplied is to a change in incomes.