[Solved] What Is Meant by the Factor Output Effect

Suppose that the current price of oil is $60 a barrel and the interest rate is 3%.Further,suppose that the interest rate remains unchanged and no new discoveries of oil are made.If two years from now the economist for the National Petroleum company believes that the rate of oil extraction is exactly right,believes that the rate of oil extraction has been too rapid,what would be the likely price for a barrel of oil at that time? A)Above $63.60 a barrel B)$63.60 a barrel C)Below $63.60 a barrel D)Above $65 a barrel

Suppose that the current price of oil is $60 a barrel and the interest rate is 3%.Further,suppose that the interest rate remains unchanged and no new discoveries of oil are made.If two years from now the economist for the National Petroleum company believes that the rate of oil extraction is exactly right,believes that the rate of oil extraction has been too slow,what would be the likely price for a barrel of oil at that time? A)Above $63.60 a barrel B)$63.60 a barrel C)Below $63.60 a barrel D)Below $60 a barrel

Which of the following statements is correct? A)A machine is a capital good but money is not. B)Money is a capital good but a machine in a factory is not. C)Both a machine and money are capital goods. D)Neither machines nor money are capital goods.

All of the following,except one,is correct regarding the demand for capital goods.Which is the exception? A)It is greater if MRP_k is higher. B)It is greater if the rate of interest is lower. C)It is affected by technological change. D)It is equal to the demand for labour.

What is meant by the factor substitution effect? A)The phenomenon of replacing consumer goods with capital goods. B)The phenomenon of replacing capital goods with consumer goods. C)The phenomenon of replacing technology with capital goods. D)The phenomenon of replacing one factor with another as a result of technological change.

Who were the Luddites? A)The name of a group of workers who supported technological change. B)The name of a group of workers who favoured increased trade with North America. C)The name of a group of industrialists who were anti-free traders. D)The name of a group of workers who fought the introduction of machines.

What is the term for the effect of a rise in total output leading to an increase in the demand for labour? A)The crowding-out effect. B)The factor substitution effect. C)The real-balances effect. D)The factor output effect.

What is the engine of economic growth according to Joseph Schumpeter? A)The accumulation of capital goods. B)Technological change. C)The activity of the entrepreneur. D)Increased labour productivity.

All of the following except one are valid explanations for the existence of profits in a capitalistic economy.Which is the exception? A)The innovations of the entrepreneur. B)A growing,dynamic economy that creates periods of disequilibrium. C)The fact that the MRP_k is positive. D)The existence of oligopolies and monopolies that inhibit the natural tendency for profits to be competed away.

Which of the following statements best describes Schumpeter's view of profits? A)Profits occur only in an economy when full employment is achieved. B)Competition within a capitalist economy would tend to result in zero economic profit. C)The source of profits,whatever level they may be,is the result of entrepreneurial activity. D)Profits occur only when the economy is in a boom.