Suppose That an Increase in Capital Per Hour Worked from $15,000

question 231

Multiple Choice

Suppose that an increase in capital per hour worked from $15,000 to $20,000 increases real GDP per hour worked by $500.If capital per hour worked increases further to $25,000, by how much would you expect real GDP per hour worked to increase if there are diminishing returns?

• A)by less than $500
• B)by exactly $500
• C)by more than $500 but less than $5,000
• D)by more than $5,000 but less than $20,000
• E)by more than $20,000

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Definitions:

Finite Life

A term used to describe assets or investments that have a fixed period of utilization or return, after which they cease to produce value.

Amortised

The process of gradually writing off the initial cost of an asset over its useful life.

Internally Generated

Refers to assets or values created within a company through its own processes and activities, rather than acquired externally.

AASB 138

An Australian Accounting Standard Board rule that outlines the accounting requirements for intangible assets not covered by other specific standards.