If South Korea's Steady-State GDP Per Worker Is Higher Than

question 111

Multiple Choice

If South Korea's steady-state GDP per worker is higher than that of the Philippines, you might conclude that:

• A) the investment rate in South Korea is higher than in the Philippines
• B) South Korea is less productive than the Philippines
• C) the depreciation rate in South Korea is higher than in the Philippines
• D) South Korea has a larger population
• E) None of these answers are correct.

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Definitions:

Economic Rent

Income derived from the possession of a unique resource, exceeding that which is needed to keep the resource in its current employment.

Economic Profit

The profit from producing goods and services while considering both explicit and implicit costs, including opportunity costs.

Producer Surplus

The gap between the price that sellers are prepared to accept for a product and the real price it sells for in the market.

Total Variable Costs

The total of all costs that vary with the level of production or output.