In a Small European Country,it Is Estimated That Changing the Level

question 8

Multiple Choice

In a small European country,it is estimated that changing the level of capital from $8 million to $10 million will increase real GDP from $2 million to $3 million.If the number of hours worked in the labor force does not change,what does this information tell you about the slope of the per-worker production function in this range?

• A)The slope is -2.
• B)The slope is 1/2.
• C)The slope is 2.
• D)The slope is 4.

---

Definitions:

Hindsight Bias

The tendency to believe, after learning an outcome, that one would have predicted it or known it was inevitable, often referred to as the "I-knew-it-all-along" effect.

Predictable Events

Occurrences or actions that can be anticipated or expected based on existing knowledge, patterns, or trends.

Intuition Correctness

The degree to which an individual's intuitive judgments or gut feelings align with accurate or effective decisions.

Psychological Theories

Frameworks or models used to understand, predict, and manage human behavior and mental processes.