Answer the question based on the following price and output data over a five-year period for an economy that produces only one good. Assume that year 2 is the base year.YearUnits of OutputPrice Per Unit18$22103315441855206In determining real GDP for year 1:
A. the price index number in year 1 is 95.
B. the price index number in year 1 will be greater than 100.
C. nominal GDP in years 1 and 2 should be deflated.
D. nominal GDP in year 1 should be inflated.
Answer: D
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What are marketable permits? Suppose there are two firms in an area, each emitting tons of sulfur. The government decides on a target level of 200 tons of sulfur, and gives each firm a permit to emit 100 tons of sulfur
Suppose Firm A is very efficient and can reduce pollution by 100 tons with an abatement cost of $500. Firm B has an older plant, so it will cost Firm B $1,000 to reduce emissions by 100 tons. What will occur with marketable permits?
The yardstick most often used to compare living standards across nations is
a. average production cost per unit b. sales revenue per month c. utility per capita d. GDP per person e. imports per year
Efficiency can correctly be defined as
A) producing outside the production possibilities boundary. B) maximizing opportunity cost. C) producing the most output with given technology and resources. D) providing for the immediate needs of the greatest proportion of the population.
Which of the following argued that the Great Depression was caused by monetary factors?
A) Friedman and Schwartz B) Hicks and Hansen C) Modigliani and Friedman D) Lucas and Sargent E) Tobin and Jorgenson