The owner of an oil well in Texas sells 500 barrels of oil to a refinery in Canada for $1,000. This transaction
A. decreases Gross Domestic Product (GDP) because oil reserves have fallen by 500 barrels.
B. has no effect on Gross Domestic Product (GDP) because this is the sale of an intermediate product.
C. has no effect on Gross Domestic Product (GDP) because the refinery is in Canada.
D. will increase Gross Domestic Product (GDP) by $1,000.
Answer: B
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A per unit subsidy increases both consumer and producer surplus, but results in a deadweight loss
Indicate whether the statement is true or false
:Employed full-time:4,200Employed part-time: 700Not employed and looking for work: 300Not employed and not looking for work: 200
Given the data in Table 12.1, if the workers who are "not employed and not looking for work" were counted as not employed and in the labor force, the unemployment rate of Metropolis would be approximately:
A. 4 percent. B. 7 percent. C. 9 percent. D. 10 percent.
Perfectly competitive markets are efficient because
A) they always reach equilibrium. B) firms in the market are price takers. C) the cost to society for producing the goods is exactly equal to the value that society places on the good. D) the long run equilibrium assures that the prices of resources will not increase.
Answer the following questions true (T) or false (F)
1. "The distribution of income should be determined by the government" is an example of a positive economic statement. 2. Policies based on positive economic ideas tend to decrease economic efficiency and reduce equity. 3. "A decrease in the price of digital cameras will decrease the demand for camera film." This statement is an example of a positive economic statement.