An organic farm sells tomatoes for 50 cents each at the local farmers market. It only cost them (in the accounting measure) 5 cents to produce each tomato. What happens to GDP with the sale of each tomato?
A) It increases by 5 cents.
B) It increases by 45 cents.
C) It increases by 50 cents.
D) It increases by 55 cents.
E) It remains unchanged because organic farmers try not strive for profit.
C
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Use the following table to answer the next question. The money supply and investment are in billions.Money Supply (billions of dollars)Interest RateInvestment (billions of dollars)$507%$100606110705120804130903140Assume that the MPC is 0.9 and the reserve requirement is 0.2. If the Federal Reserve needs to decrease aggregate demand by $100 billion at each price level to move the economy back to full employment and the current interest rate is 4%, then the Federal Reserve should ________ bonds on the open market equal to ________.
A. sell, $2 billion B. sell, $4 billion C. buy, $2 billion D. buy, $4 billion
The relationship between disposable income and consumption expenditure is
A) positive. B) U-shaped. C) negative. D) nonexistent. E) not stable because it depends on whether the economy is in equilibrium or not.
Using the data in the above table, the labor force is ________ million
A) 215 B) 120 C) 125 D) 165
If a perfectly competitive market becomes a monopoly and the costs do not change, which of the following allocations of costs and benefits applies?
A) The producer benefits, but consumers and society are harmed. B) The producer and society are harmed, but consumers benefit. C) The producer and society benefit, but consumers are harmed. D) The producer is harmed, but consumers and society benefit.