Gross domestic product (GDP) is a poor measure of social well-being because:
a. the value of leisure time is included in GDP accounting. b. the revenue earned through exports is ignored
c. each dollar of government spending is valued at less than one-half of private spending.
d. consumer spending is more important than business spending and should be considered more valuable.
e. it values products at their market prices but ignores services produced.
a
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Suppose that the United States and Cuba decide to open up trade. If each country specializes in the good in which it has a comparative advantage, ________ will gain from that trade because ________
A) both countries; consumption possibilities in both Cuba and the United States will lie outside their PPFs. B) neither country; their consumption possibilities will not change. C) only the United States; consumption possibilities in Cuba will lie outside its PPF and U.S. consumption possibilities will not change. D) only Cuba; consumption possibilities in Cuba will lie outside its PPF and U.S. consumption possibilities will not change.
Why does equilibrium in the market for a traded good not occur where that country's quantity demanded equals quantity supplied?
a. Because equilibrium occurs where demand equals supply. b. Because markets are never in equilibrium. c. Because some of the good is imported or exported. d. Because there are several demand curves, and the market can't choose between them. e. All of the above are correct.
An oligopoly
a. has a concentration ratio of less than 50 percent. b. is a price taker. c. is a type of imperfectly competitive market. d. has many firms rather than just one firm or a few firms.
Suppose a perfectly competitive firm faces the following short-run cost and revenue conditions: ATC = $6.00; AVC = $4.00; MC = $3.50; MR = $3.50. The firm should
A) increase output. B) increase price. C) remain at the same position. D) shut down.