Which of the following will be included in the calculation of GDP when using how expenditures to calculate it?
A) Dividends paid by firms to shareholders
B) Wages paid to labor by firms
C) Services purchased by the government
D) Interest paid by households for loans
Answer: C) Services purchased by the government
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What will be an ideal response?
When the price of good A is $50, the quantity demanded of good A is 500 units. When the price of good A rises to $70, the quantity demanded of good A falls to 400 units. Using the midpoint method, the price elasticity of demand for good A is
a. 1.50, and an increase in price will result in an increase in total revenue for good A. b. 1.50, and an increase in price will result in a decrease in total revenue for good A. c. 0.67, and an increase in price will result in an increase in total revenue for good A. d. 0.67, and an increase in price will result in a decrease in total revenue for good A.
A firm is currently producing in the elastic portion of its demand curve. What course of action do you recommend for it assuming it wants to raise revenue?
A. Increase price, because if it increases price and demand is elastic, total revenue will increase. B. Reduce price, because if it reduces price and demand is elastic, total revenue will increase. C. Continue producing at the current output level, because it maximizes its total revenue by producing in the elastic portion of its demand curve. D. Continue selling at the same price, but increase the amount it produces.
Exports of U.S. rice to Japan tend to
A. help Japanese consumers and harm Japanese rice producers. B. help U.S. consumers and harm U.S. rice producers. C. help U.S. consumers and harm Japanese rice producers. D. harm U.S. consumers and help Japanese rice producers.