Figure 11-2 -Refer to Figure 11-2.Assuming No Technological Change,if the United States

question 125

Multiple Choice

Figure 11-2
-Refer to Figure 11-2.Assuming no technological change,if the United States increases capital per hour worked by $40,000 every year between 2010 and 2014,we would expect to see

• A)real GDP per hour worked will increase by the same increment each year between 2010 and 2014.
• B)real GDP per hour worked will be lower in 2014 than it was in 2010.
• C)the per-worker production function will get flatter over time.
• D)the per-worker production function will shift up every year there is increase in capital per hour worked.

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Definitions:

Contestable Markets

Markets where the threat of potential entry by competitors influences the behavior and pricing of existing firms.

Perfectly Competitive

A market structure characterized by a large number of small firms, homogenous products, perfect information, and free entry and exit, leading to price taking behavior.

Five Forces Model

A framework developed by Michael Porter to analyze the level of competition within an industry and business strategy development, which includes the threat of new entrants, the threat of substitutes, the bargaining power of buyers, the bargaining power of suppliers, and competitive rivalry.

Product Differentiation

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