GDP will tend to overstate the productive capacity of a country when
a. economic bads like pollution are produced and then must be cleaned up.
b. there is a sizable underground economy.
c. nonmarket production represents a large portion of the economy.
d. working conditions improve, allowing jobs to be completed safer and faster.
A
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Which of the following will lead to a higher interest rate on a loan?
A) lower inflation B) lower opportunity cost C) increased perceived risk of default D) reduced likelihood of borrower not paying the loan
Suppose that at the current level of output, price = $100, MC = $100, AVC = $80, and ATC = $90. Which of the following is TRUE?
A) The firm should decrease output. B) The firm should shut down. C) The firm should increase output. D) The firm should maintain the current level of output.
Refer to the above diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves. In this market the indicated shift in supply may have been caused by:
A. this product becoming less fashionable. B. an increase in the wages paid to workers producing this good. C. an increase in consumer incomes. D. the development of more efficient machinery for producing this good.
Moving up a straight-line demand curve, the absolute price elasticity of demand
A) decreases. B) remains constant. C) increases. D) varies in uncertain ways.