What Will Happen to the Annual Rate of Growth of Per

question 105

Multiple Choice

What will happen to the annual rate of growth of per capita real GDP if real GDP grows at a constant rate of 4 percent and the annual rate of population growth goes from 3 percent to 3.5 percent?

• A) The annual rate of growth of per capita real GDP will increase from 7 percent to 7.5 percent.
• B) The annual rate of growth of per capita real GDP will increase from -1 percent to -0.5 percent.
• C) The annual rate of growth of per capita real GDP will remain unchanged.
• D) The annual rate of growth of per capita real GDP will decrease from 1 percent to 0.5 percent.

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Definitions:

Competitive Firm

A company that operates in a market where it must take the prevailing market price as given because the firm's individual sales do not significantly affect the market price.

Total Revenue

The total income generated by a firm from selling its goods or services, calculated as the price per unit times the number of units sold.

Output Units

Refers to the quantity of goods or services produced within a given time frame.

Average Total Cost

The per-unit production cost, calculated by dividing the overall production cost by the number of units produced.