Suppose a DVR is bought from China for $200 and sold in the US for $250. GDP will count this
A. as nothing.
B. as $200.
C. as $250.
D. as a net of $50 ($250 sale minus $200 import).
Answer: D
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Which of the following is not one of the assumptions of a perfectly competitive market?
A) Better information for producers than consumers. B) Homogeneous product. C) Free entry and exit. D) Large number of buyers and sellers.
If the total cost of production for 1000 widgets is $2000 and marginal cost is constant at $1, what is the average cost if 2000 widgets are produced?
A) $2 B) $1.50 C) $1 D) $0.50
Externalities can lead to inefficient economic outcomes because:
A) firms do not have to pay the full cost associated with using inputs that cause pollution. B) firms that produce public goods tend to be monopolies. C) Both A and B are correct. D) none of the above
Profit can be maximized only where marginal revenue equals
a. average cost. b. total cost. c. marginal cost. d. average cost.