Author Question: In the figure above, if the quantity of yogurt produced increases from 2 gallons an hour to 3 ... (Read 64 times)

mia · **on:** Jun 29, 2018

In the figure above, if the quantity of yogurt produced increases from 2 gallons an hour to 3 gallons an hour, the opportunity cost of a gallon of yogurt in terms of ice cream is

A) half a gallon.
B) 1 gallon.
C) 3 gallons.
D) 4 gallons.

Question 2

What are the basic arguments of the classical growth theory?

What will be an ideal response?

mistyjohnson · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

B

Answer to Question 2

The classical growth theory originated during the late 18th century. Although proposed by many leading economists of the time, it has most often associated with Malthus. The classical theory states that economic growth will be temporary. The reason why the growth is temporary is because any economic growth will lead to a population explosion. The growth in population increases labor hours, which lead to a reduction in capital per labor hour. Productivity declines until real GDP per person falls to the subsistence level where life is just sustained. At this point, economic growth ceases.