Author Question: If the price of chocolate chip cookies falls, then A) the supply curve of chocolate chip cookies ... (Read 578 times)

jerry coleman · **on:** Jun 29, 2018

If the price of chocolate chip cookies falls, then

A) the supply curve of chocolate chip cookies shifts rightward.
B) the supply curve of chocolate chip cookies shifts leftward.
C) there is a movement downward along the supply curve of chocolate chip cookies.
D) there is a movement upward along the supply curve of chocolate chip cookies.

Question 2

Define labor productivity. Discuss the relationship between labor productivity, human capital growth, and technology change.

What will be an ideal response?

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

Answer to Question 1

C

Answer to Question 2

Labor productivity is real GDP per hour of labor, so it equals (real GDP) (aggregate hours). The expansion of human capital and the discovery of new technology are two factors that increase labor productivity. Increasing human capital increases labor productivity because workers' skills and knowledge increase, which allows them to produce more goods and services without boosting aggregate hours. Similarly, the discovery and use of new technologies allows workers to produce more goods and services without increasing aggregate hours.