What kinds of economic activities are excluded from GDP? If GDP misses these things, then why do we use it?
What will be an ideal response?
GDP ignores underground activities, household production, externalities such as pollution, and income distribution. Economists still use it because it is highly correlated with all other measures of the quality of life, and as such serves as a useful summary statistic.
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A business organization that employs resources to produce goods and services for profit is
A) economic rent. B) a firm. C) inside information. D) the opportunity cost of capital.
Which of the following statements about the Coase theorem is true?
a. Underlying the results of the Coase theorem is the idea that private parties can bargain without cost over the allocation of resources. b. The Coase theorem asserts that private solutions to externalities invariably lead to inefficient allocations of resources. c. The Coase theorem applies to negative externalities, but not to positive externalities. d. All of the above are correct.
Cyclical unemployment
A. occurs even when an economy is producing at a point on its production possibilities frontier. B. occurs only during a recession. C. tend to occur when an economy experiences inflation. D. is a part of an economy's natural rate of unemployment.
Explain: “Whenever a number which is less than the previous average of a total is added to that total, the average will necessarily fall. Conversely, whenever a number which is greater than the previous average of a total is added to that total, the
average will necessarily rise.” How does this help explain the relationship between the various short-run cost curves? Between the various productivity curves? Please provide the best answer for the statement.