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Microeconomics: Principles & Policy

14th Edition
William J. Baumol + 2 others
Publisher: Cengage Learning
ISBN: 9781337794992

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BuyFindarrow_forward

Microeconomics: Principles & Policy

14th Edition
William J. Baumol + 2 others
Publisher: Cengage Learning
ISBN: 9781337794992
Chapter 2, Problem 1DQ
Textbook Problem
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The U.S. has the biggest national economy on earth. Why has it remained bigger than other countries with much larger labor forces or those with higher per capita incomes?

To determine

To analyze:

The reason for the U.S. is considered the biggest economy.

Answer to Problem 1DQ

The reasonfor U.S. being the biggest economy is its unique combination of prosperity and population.

Explanation of Solution

The U.S. economy is the biggest economy in the world. The reason is its unique combination of prosperity and population. Switzerland is a richer country and India is a more populous country. No other country merges high population with high per capita income the way U.S. does. Though, China comes close to U.S. despite its high labor force of almost double the entire population of U.S. However, China's per capita income is far lower than the U.S. Hence, U.S. remains the "land of opportunity".

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