Answer the following statements true (T) or false (F)
1. Constant-dollar GDP can be converted into current-dollar GDP by multiplying the real GDP by the implicit price defoliators
2. The GDP does not include raw materials used up in the productive process.
3. The GDP makes no measurement of the deterioration of the natural environment.
4. National income is equivalent to total earnings in the form of wages, rent, interest, and profits.
5. Transfer payments are added to NI in the process of determining personal income.
1. TRUE
2. TRUE
3. TRUE
4. TRUE
5. TRUE
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When the price of a gallon of orange juice rises from $1.50 to $2.00, the number of gallons of apple juice demanded rises from 20,000 to 30,000 per year
Use the midpoint formula to calculate the cross-price elasticity between orange juice and apple juice. What does the sign imply about the relationship between these two goods?
If you want to know the present value of a future payment received in one year, what formula can you use?
A) Present value equals future payment divided by one plus the rate of interest. B) Present value equals future payment times the current market rate of interest. C) Present value equals future payments times one plus the rate of interest. D) Present value equals one plus the rate of interest in decimals divided by future payment.
Wal-Mart created a competitive advantage with its inventory system to reduce the ratio of cost of goods sold to sales, expecting:
a. to enjoy huge economic profits forever. b. that its rivals will never imitate their strategy and it will continue to enjoy positive economic profits. c. that its rivals will immediately do the same thing and it will end up earning zero profits. d. to enjoy economic profits for a few years before its rivals caught up. e. that it will at least be able to cover its fixed costs.
Figure 10-8
In the long run, the perfectly competitive firm in Figure 10-8 will leave the industry if the price falls below
a.
$10.
b.
$9.
c.
$5.
d.
$2.