Real GDP is more accurate than nominal GDP in making comparisons of output over time because
A. Real GDP is not affected by changes in productivity or the size of the labor force.
B. Nominal GDP is the hypothetical output that would be produced at full employment.
C. Nominal GDP may change simply because of price changes over time.
D. Real GDP is not affected by output changes.
Answer: C
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You went to a craft show and paid an exorbitant price for an embroidered shawl that the seller said was hand-embroidered and had been imported from India
Several months later, you find a similar shawl in another showroom at a much lower price and found out that the one you bought was not an imported one. This is an example of ________ in the market for embroidered shawls. A) asymmetric information B) positive externalities C) negative externalities D) the free-rider problem
If a firm with a 20 percent market share merges with a firm with 5 percent of the market, by how much will the Herfindahl index change? The other firms have 40 percent, 15 percent, 10 percent, and 10 percent shares
a. It rises by 100. b. It rises by 200. c. It falls by 100. d. It falls by 200. e. It rises by 25.
If the quantity demanded of a good is Q when the price for the good is P, the price elasticity of demand for that good at that point is:
A. (Q/P) × (1/slope) B. Q × P × (1/slope) C. (P/Q) × (slope) D. (P/Q) × (1/slope)
Luke is a retailer who has limited display space that he must use to optimal effect. As he designs his cola display, he keeps in mind that a new tax is about to be added to cola products. If his store reflects the overall market, how should this knowledge influence his display?
a. He should make the display larger because more cola will be sold. b. He should leave his display the same size because the same amount of cola will be sold. c. He should make the display smaller because less cola will be sold. d. He should remove the display because cola can no longer be sold.