Which of the following is a shortcoming of GDP?
a. GDP excludes changes in inventories.
b. GDP includes an estimate of illegal transactions.
c. GDP excludes nonmarket transactions.
d. GDP excludes business investment spending.
C
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Ingrid has been waiting for the show "Mamma Mia!" to come to town. When it finally does come, tickets cost $60. Ingrid's reservation price is $75. But when Ingrid tries to buy a ticket, they are sold out. Ingrid decides to try to buy a ticket from a scalper (a person who purchased extra tickets at the box office with the intent to resell them at a higher price). If Ingrid finds someone who is willing to sell her a ticket for $70, she should:
A. purchase the ticket even though doing reduce total economic surplus. B. not purchase the ticket because it is overpriced. C. not purchase the ticket because the cost to the scalper was only $60. D. purchase the ticket because doing so will make her $5 better off.
With a proportional tax
A) a poor household pays a larger percentage of its income in taxes than a rich one. B) a rich household pays a larger percentage of its income in taxes than a poor one. C) all households pay the same total amount of tax. D) all households pay the same percentage of their income as taxes.
Once either expansionary or contractionary fiscal policy has been undertaken,
A) aggregate demand will respond quickly and the problems in the economy will be corrected. B) aggregate demand will respond quickly in the short run but the economy will not improve in the long-run. C) a time lag exists between implementation and the results of the policy. D) taxes will need to be adjusted because of the recognition time lag.
Economists who favor bigness in firms point to which of the following to support their argument?
a. economies of scale b. perfect competition c. need for antitrust d. advantages of marginal cost pricing e. constant returns to scale