Which of the following transactions would be included in the GDP of the United States?
A. McDonald's sells hamburgers in Russia.
B. Coca Cola produces soft drinks in England.
C. Honda produces cars in Ohio.
D. Ford Motor Company produces cars in Mexico.
Answer: C
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When the price of a good rises, the resulting change in quantity demanded due solely to the decline in your income's purchasing power is called the
a. Giffen-good phenomenon. b. law of demand. c. substitution effect. d. income effect.
Explain why charitable giving is Pareto superior move. Is there an economic explanation of why the supply of charity might be sub-optimal? Explain
What will be an ideal response?
The quantity theory of money assumes that the velocity of money:
A. is constant. B. will rise if the money supply rises and fall if the money supply falls. C. will rise if the money supply rises, but it will not change if the money supply falls. D. will fall if the money supply rises, and it will rise if the money supply falls.
Suppose that the price of a box of shotgun shells is $5. Morris's marginal cost of producing boxes of shotgun shells is $3.50 for the first box, Tommy's marginal cost of producing boxes of shotgun shells is $4 for the second box, Pat's marginal cost of producing boxes of shotgun shells is $5.50 for the third box, and Al's marginal cost of producing boxes of shotgun shells is $6 for the fourth box. In equilibrium, what is the producer surplus from producing boxes of shotgun shells?
A. $1.50 B. $2.50 C. $3.50 D. $4.00