Matteo prepares dinner for his family on Tuesdays and Fridays. Which of the following categories excluded from the GDP does this example belong to?
a. underground economy
b. nonmarket transactions
c. leisure
d. externalities
b. nonmarket transactions
You might also like to view...
Aggregate surplus:
A. equals consumers' total willingness to pay for a good less firms' total avoidable cost of production. B. equals consumers' total willingness to pay for a good plus firms' total avoidable cost of production. C. captures the total benefit created by the production and consumption of the good. D. captures the total cost created by the production and consumption of the good.
When externalities are present, market prices do not reflect all the social costs or benefits of the activity
a. True b. False
Suppose there is a decrease in both the demand for and supply of a good. What happens to equilibrium price and quantity?
A. Equilibrium quantity increases, but the effect on equilibrium price is ambiguous. B. Equilibrium quantity decreases, but the effect on equilibrium price is ambiguous. C. Equilibrium price increases, but the effect on equilibrium quantity is ambiguous. D. Equilibrium price decreases, but the effect on equilibrium quantity is ambiguous.
Which of the following is true when a potato farmer keeps some of the farm's potatoes for personal use:
A. The potatoes must be reported in the gross domestic product. B. The farmer is engaging in an illegal activity. C. The farmer is not producing salable goods. D. The potatoes are not counted in the gross domestic product.