Suppose that Apple computer buys computer components for $10,000 and uses them to make ipods that they sell to Best Buy for $30,000 . Best Buy sells these ipods for $32,000 . As a result, GDP has risen by:
a. $22,000
b. $2,000
c. $20,000
d. $32,000
D
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Until 2007, the price of sport utility vehicles (SUVs) rose and each year more were purchased. This experience suggests that
A) there must have been technological advances in the way SUVs are produced. B) the "law of demand" does not hold true in this market. C) there must have movement leftward along the supply curve for SUVs. D) there must have been a rightward shift of the demand curve for SUVs.
The production function is concave in capital because
A) the contribution to production of each additional unit of capital decreases. B) the marginal product of capital is increasing. C) the marginal product of labor is decreasing. D) the cost of loans increases with their quantity.
Government purchases, under the expenditure approach to GDP accounting, do not include: a. state government purchases of plumbing services. b. Social Security benefit payments to retirees
c. the salaries of military officers. d. federal government purchases of computers.
The demand curve for a monopolistic competitor slopes downward because
A. demand drops to zero after a slight price increase. B. there are close but not perfect substitutes for the product. C. customers have no loyalty to the product. D. the product is undifferentiated.