Assume that an economy experiences both positive population growth and technological progress. Once the economy has achieved balanced growth, we know that the output per effective worker ratio (Y/NA) is
A) growing at a rate of 0.
B) growing at a rate of gA + gN.
C) growing at a rate of gN.
D) growing at a rate of gA.
E) none of the above
A
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The typical movement of the aggregate supply curve resulting from an increase in productivity is that it
a. shifts inward and becomes flatter. b. shifts inward. c. shifts outward. d. becomes flatter. e. becomes steeper.
Owen and Simon both like playing with balls and cars. Suppose B represents the number of balls, and C represents the number of cars. If Owen's utility function can be given by U(B, C) = 10B + 5C, and Simon's utility function can be given by U(B, C) = 6B + 6C, which of the following trades would benefit Simon but not Owen?
A. Owen gives Simon 3 cars in exchange for 2 balls B. Owen gives Simon 2 cars in exchange for 3 balls C. Owen gives Simon 3 balls in exchange for 2 cars D. Owen gives Simon 2 balls in exchange for 3 cars