Technological Progress Allows Workers to Produce More

question 28

Multiple Choice

Technological progress allows workers to produce more:

• A) because it increases the amount of physical capital available.
• B) because it increases the amount of human capital available.
• C) even when the amount of physical capital and human capital do not change.
• D) only if the amount of physical capital grows at the same rate.

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Definitions:

Heuristics

The brain’s low-energy mental shortcuts for making decisions. They are “fast and frugal” and work well in most situations but in other situations result in systematic errors.

Behavioral Economics

An area of economic research that examines how psychological, cognitive, emotional, cultural, and social factors affect the economic decisions of individuals and institutions.

Neoclassical Economics

An approach to economics focusing on the determination of goods, outputs, and income distributions in markets through supply and demand.

Behavioral Economics

A field of economics that studies how psychological, cognitive, emotional, cultural, and social factors affect economic decisions.