As a measure of economic welfare, GDP underestimates a country's production of goods and services when there is an increase in
A) the production of military goods
B) the productions of antipollution devices
C) crime prevention services
D) household production
E) legal services
Ans: D) household production
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Explain why total utility is maximized when the marginal utility per dollar on all goods is equal
What will be an ideal response?
The process by which individuals limit their productive efforts to a particular activity instead of trying to produce directly everything that they need is known as
a. specialization. b. using absolute advantage. c. using exchange. d. scarcity.
Price elasticity of demand measures the
A) slope of the demand curve. B) sensitivity of quantity demanded to changes in the price of substitute goods. C) sensitivity of price to changes in the quantity demanded of substitute goods. D) sensitivity of quantity demanded to changes in price.
During the Great Depression in the United States between 1930 and 1933, banks' reserve/deposit ratio ________ and the amount of currency held by the public ________, while the money supply ________.
A. decreased; decreased; decreased B. increased; increased; decreased C. increased; increased; increased D. decreased; decreased; increased