One could argue that GDP is not a good measure of the standard of living in a nation because it ________.
A. excludes payments for pollution control equipment
B. does not account for the size of the population
C. does not account for the cost of police protection
D. includes the cost of health insurance
Answer: B
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Piece rates are practical when
A) individual output can be easily measured. B) the quantity of the work is of much less importance than quality. C) both employees and employers engage in opportunistic behavior. D) All of the above.
The motivating force behind an increase in supply in a long-run adjustment to equilibrium is
a. lower prices. b. economic profits that are present in the short run. c. higher profit expectations among owners of firms in the industry, triggered by increased prices. d. normal profits witnessed by individuals outside the industry that trigger entry. e. the decreases in average cost that can be obtained through economies of scale.
When there are positive externalities associated with the consumption of a good, we can expect the market:
A. demand curve to lie above the social demand curve. B. demand curve to lie below the social demand curve. C. supply curve to lie above the social supply curve. D. supply curve to lie below the social supply curve.
Noncash gifts:
A. increase the utility of recipients by introducing them to products they have not consumed before. B. reduce recipient utility relative to a cash gift because noncash gifts often fail to match recipient preferences. C. entail as much utility as do cash gifts. D. increase the utility of recipients because many people are uncertain of their own preferences.