According to many economists, production that occurs in the underground economy
a. has no market value and therefore should not be included in GDP
b. is given too much weight by the Bureau of Economic Analysis, causing GDP to overstate true output
c. consists exclusively of illegal production activities such as drug selling and prostitution
d. is accurately accounted for by the Bureau of Economic Analysis in its measurement of GDP
e. is given insufficient weight by the Bureau of Economic Analysis, causing GDP statistics to understate true output
E
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A market has four individuals, each considering buying a grill for his backyard. Assume that grills come in only one size and model. Abe considers himself a grill-master, and finds a grill a necessity, so he is willing to pay $400 for a grill. Butch is a meat-lover, honing his grilling skills, and is willing to pay $350 for a grill. Collin just met the girl of his dreams, and she loves a good grilled steak, so in his effort to impress her he is willing to pay $320 for a grill. Daniel loves grilled shrimp and thinks it might be cheaper in the long run if he buys a grill instead of eating out every time he wants grilled shrimp, so he is willing to pay $200 for a grill.
Given the scenario described, if the market price of grills falls from $395 to $340, then we can say: A. Abe's consumer surplus increases from $5 to $60, and total consumer surplus increases from $5 to $70. B. Abe's consumer surplus decreases from $60 to $5, and total consumer surplus decreases from $70 to $5. C. Collin's consumer surplus increases from $0 to $20, and total consumer surplus increases from $5 to $70. D. Butch's consumer surplus decreases from $10 to $0, and total consumer surplus increases from $10 to $80.
Microeconomics examines the
A) total household expenditures. B) behavior of the economy as a whole. C) aggregate business spending. D) decision making undertaken by individual households.
Answer the following statement(s) true (T) or false (F)
1. Unwanted materials that pose a substantial threat to human health or the environment are referred to as municipal solid wastes. 2. Types of hazardous substances include heavy metals, acids, and solvents. 3. The most common type of damage linked to hazardous wastes is water and soil contamination. 4. According to the textbook application, Love Canal was originally contaminated by runoff from a military base. 5. The first federal legislation passed in the United States that dealt with waste control was the Resource Conservation and Recovery Act (RCRA) of 1976.
Suppliers recognize there is a shortage in the market for their product when they notice that
a. the quantity supplied exceeds the quantity demanded. b. the quantity demanded is falling. c. inventories are falling. d. production exceeds new orders for the product. e. government economists announce a shortage exists.