Exam 17: Market Failure: Externalities, public Goods, and Asymmetric Information

When a production function is graphed with Real GDP on the vertical axis and labor on the horizontal axis,a rise in labor ________________________,and a rise in the technology coefficient __________________.

A useful rule of thumb called the "Rule of 70" states that if something grows at a constant rate of Z percent per year,it doubles in size approximately every __________ years.

In the production function Real GDP = T (L,K),the T stands for tax coefficient.

In the production function,the variable K represents human capital.

An economy growing at a steady rate of 2.6 percent per year doubles in size approximately every __________ years.

List and describe four factors that can contribute to economic growth.

Production Function Real GDP = T (L,K),such that Real GDP = T(L + K) Assume that the technology coefficient is equal to 0.40. -Refer to Exhibit 17-1.If this production function is graphed with Real GDP on the vertical axis and labor on the horizontal axis,the resulting graph would be

_______________________ specifies the relation between technology and the factor inputs to output.

Neoclassical growth theory treats technology as an _________________ variable,and new growth theory treats technology as an ______________.

According to new growth theory,discovering and implementing new __________ is what causes economic growth.

A production function specifies the relation between ____________ and the ___________ to ____________________.

Compare a property rights system in which people are allowed to keep one-third of the monetary rewards of their labor with a system in which they keep two-thirds.We should expect more entrepreneurship under the __________ system and faster real economic growth under the __________ system.

Suppose the population of a country rises significantly.If the country's Real GDP remains constant,the result is _________________ economic growth.

If an economy can increase its steady annual growth rate from 1 percent to 1.5 percent,this reduces the time it takes for the economy to double in size by approximately __________ years.

New growth theory holds that technology is __________ and that the more resources that go to develop technology,the __________ technology that is produced.

Property rights are a tangible factor in producing economic growth.

Higher income taxes cause a ____________shift of the labor supply curve,which then produces__________ Real GDP.

-Refer to Exhibit 17-3 Assume that the starting point on the production function is point A.After an increase in the quantity of labor,there would be a ______________________ which would shift the LRAS curve from LRAS₁ to _______________ resulting in _______________..

Economists Barro and McCleary's research regarding the impact of religious beliefs on economic growth noted that a belief in hell matters more to economic growth than the belief in heaven.

An economy doubles in size every 20 years if it maintains a steady annual growth rate of about __________ percent.