Excluding indirect business taxes and depreciation, Gross Domestic Income (GDI)
A. never equals GDP.
B. is the sum of all income paid to the factors of production.
C. would equal GDP if there was no depreciation.
D. cannot be computed.
Answer: B
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Use the figure below to answer the following question. The equilibrium point in the market is the point at which the S and D curves intersect.
Assuming equilibrium price P1, producer surplus is represented by areas
A. a + b. B. a + c. C. a + b + c + d. D. c + d.
All else equal, if the demand for capital decreases and the supply of capital does not change, the equilibrium real rental cost of capital will ________ and the equilibrium quantity of capital will ________
A) increase; increase B) decrease; not change C) decrease; decrease D) not change; decrease
In the classical model, high unemployment due to a change in aggregate demand
A) can persist for an indefinite period of time. B) will return to its normal level quickly as wages adjust. C) will persist if due to a supply shock but not if due to a demand shock. D) never exists because unemployment can never deviate from its normal level.
When there are economies of scope between two products which are separately produced by two firms, merging into a single firm can:
A. lead to a reduction in sales. B. accomplish a reduction in costs. C. lead to an increase in cost. D. accomplish an increase in sales.