Suppose in 2018, you purchase a house built in 2003. Which of the following would be included in the gross domestic product for 2018?
A) the value of the house in 2018
B) the value of the house in 2003
C) the value of the house in 2018 minus depreciation
D) the value of the services of the real estate agent
Answer: D
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Suppose all individuals are identical, and their monthly demand for Internet access from a certain leading provider can be represented as p = 5 - (1/2)q where p is price in $ per hour and q is hours per month
The firm faces a constant marginal cost of $1. Potential consumer surplus equals A) $4. B) $8. C) $16. D) $32.
Which one of the following statements is most clearly inconsistent with the economic way of thinking?
a. "If you give a person a fish, you feed him for a day; if you teach him to fish, you feed him for life." b. "If the government provides a good free to citizens, then the opportunity cost of the good is zero." c. "If you derive the same satisfaction from a hamburger as a chicken sandwich, it makes sense to have the cheaper alternative for lunch." d. "When it is cheaper to have someone else mow your lawn than to mow it yourself, hiring someone to do the job is consistent with economizing behavior."
For the purposes of calculating GDP using the expenditure approach, which of the following is not included in the government purchases account?
A. The government's purchase of a computer B. The payroll of the federal government C. Government purchases of pencils D. Welfare payments to the poor
Suppose Erie Textiles can dispose of its waste "for free" by dumping it into a nearby river. While the firm benefits from dumping waste into the river, the waste reduces fish and bird reproduction. This causes damage to local fishermen and bird watchers. At a cost, Erie Textiles can filter out the toxins, in which case local fishermen and bird watchers will not suffer any damage. The relevant gains and losses (in thousands of dollars) for the three parties are listed below. WithFilterWithoutFilterGains to Erie$200$400Fisherman$180$50Bird Watchers$130$25If Erie Textiles does not install the filter, there will be a net social ________ of ________ (in thousands of dollars).
A. loss; $35 B. gain; $200 C. loss; $110 D. gain; $75