Because of Diminishing Returns,an Economy Can Continue to Increase Real

question 58

Multiple Choice

Because of diminishing returns,an economy can continue to increase real GDP per hour worked only if

• A)there are decreases in human capital.
• B)the per-worker production function shifts downward.
• C)there continues to be decreases in capital per hour worked.
• D)there is technological change.

---

Definitions:

Market Failure

A situation in which the allocation of goods and services by a free market is not efficient, often leading to a net social welfare loss.

Externality

A consequence of an economic activity experienced by unrelated third parties; can be either positive or negative.

Resource Dependency

A theory in organizational studies that describes how external resources dictate the behaviors and strategies of organizations.

External Constituencies

Groups or individuals outside an organization that are affected by its decisions and actions, such as customers, suppliers, and the community.