If production remains the same and all prices double, then real GDP:
A. and nominal GDP are both constant.
B. is constant and nominal GDP is reduced by half.
C. is constant and nominal GDP doubles.
D. doubles and nominal GDP is constant.
Ans: C. is constant and nominal GDP doubles.
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Refer to Table 2-8. What is Wilma's opportunity cost of making a bench?
A) 1.3 statues B) 3 statues C) 1/3 of a statue D) 1/2 of a bench
Based on Table 3.1, trade between the United States and Mexico will occur as long as the relative price of shoes is between
A) three computers and one computer. B) three computers and two computers. C) one-half computer and one-third computer. D) six computers and three computers. E) None of the above.
Which of the following best illustrates moral hazard?
a. After a person obtains life insurance, she takes up skydiving. b. A person obtains insurance knowing he is in poor health. c. A person holds stock only in very risky corporations. d. A person holds stocks from only a few corporations.
When the social costs exceed the private costs, economists state that there is
A. an underproduction of output. B. a negative externality. C. a positive externality. D. a waste of resources in production.