Suppose an economy produces only cheese and fish. In 2010, 20 units of cheese are sold at $5 each and 8 units of fish are sold at $50 each. In 2009, the base year, the price of cheese was $10 per unit and the price of fish was $75 per unit. For 2010,
a. nominal GDP is $500, real GDP is $800, and the GDP deflator is 62.5.
b. nominal GDP is $500, real GDP is $800, and the GDP deflator is 160.
c. nominal GDP is $800, real GDP is $500, and the GDP deflator is 62.5.
d. nominal GDP is $800, real GDP is $500, and the GDP deflator is 160.
a
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The principal of optimization at the margin states that:
A) moving toward the optimal alternative makes the decision maker worse off, and moving away from it, makes the decision maker better off. B) an optimal alternative has the lowest indirect costs in comparison to other feasible alternatives. C) an optimal alternative has the highest net benefits in comparison to other feasible alternatives. D) moving toward the optimal alternative makes the decision maker better off, and moving away from it makes him worse off. Assume that there are five apartments located at different distances from an individual's place of work: very close, close, far, very far, and extremely far. The individual makes his choice by studying the change in costs as he moves farther from his place of work. She has to choose between renting one of the five apartments. The movement from apartment Very Close to Close has a marginal cost of -$60, a movement from apartment Close to Far has a marginal cost of -$40, a movement from apartment Far to Very Far has a marginal cost of -$10, and a movement from apartment Very Far to Extremely Far has a marginal cost of $20.
Explain the difference between a cooperative equilibrium and a noncooperative equilibrium in game theory
What will be an ideal response?
At his profit-maximizing level of output, a monopolist's average total cost curve is tangent to his demand curve. The monopolist
a. is earning a negative economic profit. b. may or may not be earning a negative economic profit. c. is earning zero economic profit. d. is earning a positive economic profit.
Inclusion of the Social Security Trust Fund in the overall budget calculation
a. reduces the reported size of the budget deficit because the Social Security system is currently running a surplus. b. increases the size of the reported budget deficit because the Social Security system is currently running a deficit. c. decreases the size of the reported budget deficit because the Social Security system is currently running a deficit. d. increases the size of the reported budget deficit because the Social Security system is currently running a surplus.