We do not add up the value of all intermediate goods produced in 2000 and record them as part of 2000 GDP
Indicate whether the statement is true or false
T
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A good that takes up a very large percentage of the consumer's budget will tend to have
a. an elastic demand. b. a perfectly elastic demand. c. an inelastic demand. d. an upward-sloping demand curve. e. very many substitutes.
The business activities of Firm A confer positive externalities on Firm B, and the business activities of Firm B confer positive externalities on Firm A. If the two firms merged, then
a. their respective markets would move closer to the social optimum. b. their respective markets would move further away from the social optimum. c. total surplus in their respective markets would decrease. d. the merger would serve as an example of a misguided public policy toward externalities.
Jacinda quit her job as a blackjack dealer where she made $42,000 per year to start her own florist business. Her business expenses are $14,000 per year on rent, $21,000 per year on supplies, and $9,000 per year on part time help. As for her personal expenses, her apartment costs her $12,000 per year and her personal bills are an extra $6,000 per year. What is Jacinda's opportunity cost of running the business?
A. $104,000 B. $86,000 C. $62,000 D. $44,000
A useful economic model
A. deals only with possibilities that actually occurred. B. makes only realistic assumptions. C. may make some unrealistic assumptions in order to simplify a complex reality. D. will avoid conclusions that have public policy implications, because economists do not make value judgments.