The Statement "The Rich Get Richer and the Poor Get

question 235

Multiple Choice

The statement "the rich get richer and the poor get poorer" is evident in the fact that

• A)the earnings gap between high-skill jobs and low-skill jobs has increased over the last several years.
• B)developing countries do not pay workers the value of their marginal product.
• C)developed economies export high-skill jobs to developing countries.
• D)All of the above are correct.

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Definitions:

Economic Profits

Profits exceeding the opportunity costs of all inputs, indicating a firm is not only covering its costs but earning more than the next best alternative use of its resources.

Product Demand Curve

A graphical representation showing the relationship between the price of a product and the quantity of the product demanded by consumers.

Long-Run Equilibrium

A state in which all factors of production and costs are variable, allowing firms to make adjustments and the economy to achieve a steady state of operations with no tendency for change.

Product Differentiation

The process of distinguishing a product or service from others, to make it more attractive to a particular target market.