Explain why GDP was never intended to be a measure of social well being.
What will be an ideal response?
GDP is simply a measure of total production. It does not include many things which affect the quality of life. For example, it does not include an adjustment for changes in quality of products, underground economic activity, changes in leisure time, nonmarket transactions, or take into account desirable or undesirable social side-effects associated with production and consumption.
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Robinson Crusoe divides his time between catching fish and gathering fruit. Part of his production possibilities frontier is given in the above table. Mr. Crusoe, while lonesome, is efficient and always stays on his PPF. Mr
Crusoe is consuming 20 pounds of fish. Then he decides to slowly become a vegetarian and decrease his consumption of fish to 9 pounds. This decision means that Mr. Crusoe will A) incur an opportunity cost of 9 pounds of fruit. B) incur an opportunity cost of 99 pounds of fruit. C) be able to enjoy a gain of 9 pounds of fruit. D) incur an opportunity cost of 20 pounds of fish. E) incur an opportunity cost of 9 pounds of fish.
In New Keynesian macroeconomics, when marginal costs are too sticky to change in proportion to nominal aggregate demand, prices ________ and so menu costs ________ needed to explain business cycles
A) are also sticky, are B) are also sticky, are not C) are still perfectly flexible, are D) are still perfectly flexible, are not
The demand for an input used in a fixed proportions technology
A) is identical to the demand for the other inputs. B) is greater than the demand for the end product itself. C) lies below the demand for the end product itself. D) is the same as the demand for the end product itself.
"Marriage bars":
a. encouraged married women to participate in the labor force. b. became more widespread in the 1920s c. forced female employees to leave work when they married. d. Both a and b are correct. e. Both b and c are correct.