Some Economists Argued That the Productivity Slowdown of the Mid-1970s

question 46

Multiple Choice

Some economists argued that the productivity slowdown of the mid-1970s to the early 1990s was due to changes in oil prices that:

• A)increased production costs, causing firms to reorganise production to conserve energy, which reduced output per worker.
• B)decreased production costs, causing firms to reorganise production to conserve energy, which reduced output per worker.
• C)increased production costs, causing firms to reorganise production to conserve energy, which increased output per worker.
• D)decreased production costs, causing firms to increase production, which reduced output per worker.

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Definitions:

Benefits Principle

The idea that people should pay taxes based on the benefits they receive from government services

Taxes

Obligatory charges imposed by authorities on the earnings of employees and the profits of businesses, or applied to the price of various commodities, services, and financial activities.

Total Surplus

The sum of consumer surplus and producer surplus in a market, representing the total benefits to society.

Deadweight Loss

A loss of economic efficiency that can occur when the free market equilibrium for a good or a service is not achieved, often due to market failure, taxes, or subsidies.