If the Growth Rate of Employment Is Positive but Labor

question 196

Multiple Choice

If the growth rate of employment is positive but labor productivity remains unchanged, which of the following is likely to happen?

• A) The per-worker production function will rotate upward.
• B) Real GDP will decrease.
• C) Real GDP will remain constant.
• D) The per-worker production function will rotate downward.
• E) Real GDP will increase.

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Definitions:

Monopolistically Competitive

A market structure characterized by many sellers offering differentiated products, leading to competition based on product quality, brand, and price.

Zero Profits

A situation where a firm's total revenues exactly equal its total costs, typically in the long run in perfectly competitive markets.

Monopolistic Competition

A market structure characterized by many firms selling products that are similar but not identical, with few barriers to entry.

Price Exceeds Marginal Cost

A situation where the price of a good is higher than the marginal cost of producing it, often indicating imperfect competition.