If one added up the value of all intermediate goods that went into the production of real GDP, the total value of intermediate goods would be
A. Equal to the GDP.
B. Greater than the GDP.
C. Less than the GDP.
D. None of the choices are correct.
Answer: B
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Which of the following statements best describes an inferior good?
A) An inferior good is a good whose quantity supplied always exceeds the quantity demanded. B) An inferior good is a good whose demand decreases with an increase in consumers' income. C) An inferior good is a good that is sold at a subsidized price. D) An inferior good is a good that is rationed by the government.
The combined effect of a real wage increase is that
A) the income effect always dominates, leading to fewer hours worked at a higher wage. B) the substitution effect always dominates, leading to more hours worked at a higher wage. C) if the substitution effect outweighs the income effect, the labor supply curve slopes downward, but if the income effect outweighs the substitution effect, the labor supply curve slopes upward. D) if the substitution effect outweighs the income effect, the labor supply curve slopes upward, but if the income effect outweighs the substitution effect, the labor supply curve slopes downward.
At a price of $20, the marginal revenue of a monopolist is $12. If the marginal cost of production is $10, what should the monopolist do in order to maximize profits?
A. Increase its price. B. Decrease its price. C. Keep its price at the same level. D. There is not enough information to solve.
Refer to the information provided in Figure 20.1 below to answer the question(s) that follow.
Figure 20.1Refer to Figure 20.1. The opportunity cost of producing a bushel of alfalfa in Canada is
A. half as much as that in the United States. B. four times as much as that in the United States. C. the same as that in the United States. D. twice as much as that in the United States.