Fred the farmer purchased five new tractors at $20,000 each. Fred sold his old tractors to other farmers for $50,000. The net increase in GDP of these transactions was
A) $50,000.
B) $100,000.
C) $125,000.
D) $150,000.
B
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Classical growth theory predicts that increases in real GDP per person will
A) last because people make choices in the pursuit of higher profits. B) not last because higher income encourages smaller families and a lower population growth rate. C) not last because higher income leads to a population explosion. D) last because higher growth leads to new technology. E) last only if the government directs firms to make more investments in capital and new technology.
Archibald's Tattoos is a perfectly competitive firm. The firm's costs are shown in the table above. If the market price of a tattoo is $12.50 what is the firm's economic profit?
A) zero B) $10 per hour C) -$10 per hour D) $20 per hour
Because of the income effect, a higher wage rate
A) shifts the supply of labor curve leftward. B) shifts the supply of labor curve rightward. C) leads to a decrease in quantity of labor supplied. D) leads to an increase in quantity of labor supplied.
How many dollars do you need to buy a Swedish Kronor (SEK) when the exchange rate is $1 = 6.429 SEK?
a. $0.016 b. $1.056 c. $0.649 d. $0.156 e. $1.56