A new technology is discovered that results in all new cars producing 50 percent less pollution. The technology costs nothing to produce and cars do not change in price
As a result of the technology, there is a reduction in the number of visits people make to the doctor to complain of breathing difficulties. Which of the following is true? A) Real GDP decreases as a result of fewer doctor services being provided.
B) Real GDP is not affected.
C) Nominal GDP increases to reflect the improvement in the health of the population.
D) Real GDP decreases to reflect the decrease in pollution.
E) Nominal GDP does not change and real GDP increases.
A
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When 5 units of labor are employed, total product is 9 units; when 6 units of labor are employed, total product is 11 units of output. If the price of output is $5 per unit, what is the marginal revenue product of the 6th unit of labor?
A) $10 B) $5 C) $15 D) $55
By far the largest category of goods and services in the CPI basket is
a. housing. b. transportation. c. education & communication. d. food & beverages.
Other things constant, the price elasticity of demand for a product will be smaller (more inelastic) if:
A. people spend a large share of their income on the product. B. people spend an insignificant share of their income on the product. C. the population in the market area is large. D. there are many good substitutes for the product.
The basic human tendency to overvalue recent experience when trying to predict the future is called:
A. the recency effect. B. tulip mania. C. the leverage effect. D. herd instinct.