Consider three inputs of production: labour, physical capital and natural resources, and an economy with decreasing returns to scale. If you increase all three inputs x times then the total gross domestic product (GDP) in the economy will increase exactly x times, but GDP per capita will decrease
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Consider three inputs of production: labour, physical capital and natural resources, and an economy with decreasing returns to scale. If you increase all three inputs x times then the total
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- Using the production function Real GDP = T (L, K), define the term production function and describe what each of the variables (T, L, and K) represents. When graphed with Real GDP on the vertical axis and labor on the horizontal axis, which variable(s) can shift the production function and which variable(s) can cause a movement along the production function?Suppose you are given the aggregate production function for an economy and the amount of available technology increases for this economy. If labor and capital constant are held constant, increase in technology will causes labor productivity to decrease. True FalseIn macroeconomics, the connection from inputs to outputs for the entire economy is called _______________. Question options: a) physical capital b) a production function c) human capital d) an aggregate production function
- Indicate whether the following statement is TRUE or FALSE and explain your answer: ‘Consider threeinputs of production: labour, physical capital and natural resources, and an economy with decreasingreturns to scale. If you increase all three inputs x times then the total gross domestic product (GDP) inthe economy will increase exactly x times, but GDP per capita will decrease.’The determinants of productivity Consider a simple economy whose only industry is fishing. In this industry, productivity—the amount of goods and services a worker can produce per hour—is measured by the number of fish one fisherman catches per hour. In the following table, match each example to the productivity determinant it represents. Examples Human Capital per Worker Natural Resources per Worker Physical Capital per Worker Technological Knowledge The fertile waters in which the fish feed and breed An advanced mapping system that determines the likelihood of finding fish schools in different depths and locations The skills workers develop through training before working on and piloting boats The boats in the fishing fleet“An economy which does not have a strong manufacturing infrastructure cannot continue to make required investment on itself. An economy that grows only by service sector means that it is built on sand.” Sony Member and CEO Akia Morito 1992. Do you agree with Akia Morito’s idea?
- Which of the following statement is true ? (a).Final goods are produced in the same year as capital goods are produced in different year. (b). Capital goods are produced one year and final good are produced over a period of more than one year . (c). Intermediate goods are type of capital goods . (d). Capital goods are not final goods because they are used up in the same period in which they are produced.In economic terminology, the inputs used to make goods and services are referred to as A. intangibles . B. factors of production. C. real output . D. durables and nondurables.The following graph shows a variety of possible production functions (PFs) in an imaginary economy, assuming constant levels of human capital and technology. Because human capital and technology remain unchanged, each of these production functions represents a different level of the capital stock. Fill in the table with the curve that corresponds to each of the capital stock levels described. Levels of Capital Stock This corresponds to which curve? (PF1, PF2, PF3) Highest Middle Lowest Fill in the blank: The slope of the line connecting the origin to point B is __________ (options: flatter, steeper) than the slope of the line connecting the origin to point A, because the slope of such a line is equivalent to ___________ (options: productivity, the marginal physical product of labor, marginal cost).
- Holding all factors of production constant except for labor, what happens in an economy when real GDP output increases? The unemployment rate falls and in employment rate increases. The level of technology increases as the economy expands. The level of capital increases as the economy expands. All of the answers are correct.An increase in the amount of physical capital per worker _________, while technological progress ________. Group of answer choices A) shifts up the aggregate production function; moves the economy along the aggregate production function B) moves the economy along the aggregate production function; shifts up the aggregate production function C) makes the aggregate production function steeper; changes the slope of the aggregate production function D) makes the aggregate production function steeper; makes the aggregate production function flatterGoods and Services are exchanged and used As Final Consumption For Investment As Inputs in the production of other goods and services All of the above