Economic growth shifts a society's production possibility frontier away from the origin.
Answer the following statement true (T) or false (F)
True
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Real GDP is not a perfect indicator of economic welfare because ________
A) it includes the underground economy B) it includes a direct measure of health and life expectancy C) it underestimates inflation D) economic welfare depends on many factors not measured or not measured accurately by real GDP
If the substitution effect of a lowered price is partly or fully offset by the income effect, we know that the good in question is a(n)
a. complementary good b. inferior good c. luxury good d. normal good e. substitute good
Dr. Benson is regarded as, by far, the best dentist in his part of the country, yet his income is not significantly higher than the average income for a dentist in his area. In contrast, Bo Johnson, the best baseball player in that region, earns five times the average salary of all baseball players. The most likely explanation is that
a. the widespread perception that Dr. Benson is a great dentist is, in fact, incorrect. b. the baseball players' union is more powerful than the professional association of dentists. c. Bo Johnson, unlike Dr. Benson, can provide his services to millions of people simultaneously. d. chance plays a role in determining people's incomes, resulting in earnings discrepancies that are hard to explain or justify.
If competitive industry Z is making substantial economic profit, output will:
A. fall in industry Z and firms will likely leave the market. B. fall in all industries except industry Z. C. expand in industry Z as more resources will move to that industry. D. expand in industry Z, but no new firms will enter the market.