Use the Following to Answer Questions

question 276

Multiple Choice

Use the following to answer questions :
Scenario: Productivity
The economy has grown by 4% per year over the past 30 years. During the same period the labor force has grown by 1% per year and the quantity of physical capital has grown by 5% per year. Each 1% increase in physical capital per worker is estimated to increase productivity by 0.4%. Assume that human capital has not changed during the past 30 years.
-(Scenario: Productivity) Look at the scenario Productivity. How much has technological progress contributed as a percentage of productivity growth?

• A)20%
• B)47%
• C)53%
• D)91%

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Definitions:

Downsloping

Characteristic of a demand curve, indicating that as the price decreases, the quantity demanded increases, assuming all other factors remain constant.

Pure Competition

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

Nonprice Competition

A strategy where businesses focus on improving product quality, promoting innovation, or providing exceptional service instead of lowering prices to compete.

Differentiated Products

Goods or services that are distinguished from similar products by quality, features, branding, or customer service, allowing them to compete apart from price alone.