Consider an economy over the years 2008 and 2009. The output in the economy has remained constant over the two years but the prices of all goods and services have halved. In such a situation,
A) the real GDP of the economy stays the same over the two years.
B) the nominal GDP of the economy remains the same over the two years.
C) the real GDP of the economy increases over the two years.
D) the nominal GDP of the economy increases over the two years.
A
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The general form of the per-person production function used in Chapter 10 is
A) (Y/N) = A - f(N/K). B) (Y/N) = A + f(N/K). C) (Y/N) = A/f(K/N). D) (Y/N) = Af(K/N).
Investment in safety at the firm level poses a prisoners' dilemma because
A) if each firm plays its dominant strategy, joint profits are maximized. B) if each firm plays its dominant strategy, joint profits are not maximized. C) neither firm has a dominant strategy. D) the Nash equilibrium is not achieved.
Which of the following would increase the supply of laptop computers?
a. Higher wage rates for the workers that produce laptop computers. b. A technological improvement that lowers the cost of producing laptop computers. c. An increase in the price of computer chips used to produce laptop computers. d. All of these.
In the absence of taxes, Carlos would prefer to purchase a large fishing boat with a 75 hp motor. The government has recently decided to place a tax on boats with 75 hp motors or higher. If Carlos decides to purchase a smaller boat with a 50 hp motor as a result of the tax, which of the following statements is correct?
a. Other people who choose to purchase large boats will incur the cost of the deadweight loss of the tax. b. There are no deadweight losses as long as some people still choose to purchase large boats. c. In order to determine the size of the deadweight loss, we must add the revenues from the tax to the loss in Carlos's consumer surplus. d. Carlos is worse off, and his loss of welfare is part of the deadweight loss of the tax.