Bob's Barber Shop cut 3,000 heads of hair in 2016 and 3,100 in 2017. The price of a haircut was $7 in 2016 and $8 in 2017. If 2016 is the base year, what was Bob's contribution to real GDP in 2017?
A. $21,000
B. $24,800
C. $21,700
D. $24,000
Answer: C
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A. it creates a “license to pollute,” sure to be popular with environmentalists. B. it reduces uncertainty about the quantity of pollution that will be emitted. C. it is a direct control system and avoids the inefficiencies of a market. D. permits can be handed out on the basis of need to protect firms from high costs.
Average variable cost is defined as:
A. total variable cost divided by quantity. B. quantity divided by total variable cost. C. the change in total variable cost divided by the change in quantity. D. the change in quantity divided by the change in total variable cost.
Sovereign default refers to
A) default due to excessive money supply growth. B) default on private debt instruments. C) default on government debt instruments. D) bankruptcy of firms, resulting in equity losses.
Cost minimization suggests that two inputs should be employed to the point where
A. the marginal cost of each input is identical. B. the extra contribution to physical output of the inputs is identical. C. the marginal product per dollar spent on each input is identical. D. the marginal revenue product of each input is identical.