GDP tends to underestimate the productive activity in the economy because it excludes the value of output from ________.
A. the consumption of fixed capital
B. intermediate goods
C. public transfer payments to households
D. the underground economy
Answer: D
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A radio manufacturer has two plants -- one in Taiwan and one in California. At the current allocation of total output between the two plants, the last unit of output produced in the Taiwan plant added $8 to total cost, while the last unit of output produced in the California plant added $6 to total cost. If the firm switches one unit of output from the California to the Taiwan plant, then
A. profit will decrease $2. B. profit will increase $6. C. profit will decrease $6. D. profit will increase $14.
Which of the following statements is not true?
A. Price elasticity of demand for basic foods is low. B. When price elasticity of demand is very high, we say there is brand loyalty. C. The availability and price of substitutes affect the elasticity of demand for a good or service. D. When goods have very low prices, the elasticity of demand is usually quite low.
Alcoa had a monopoly in the U.S. aluminum market from the late nineteenth century until the end of World War II. Which barrier to entry was the source of Alcoa's monopoly power?
A. ownership of a vital resource B. government franchises and licenses C. patents and copyrights D. economies of scale
The largest expansions in transfer payments at the U.S. federal level have been in Social Seccurity and Medicare.
a. true b. false