Explain what will happen in the market for pagers as the technology used to produce them improves at the same time that the price of cellular phones decreases
The technological improvement will increase the supply of pagers, leading to lower prices and a larger
quantity traded. Cell phones are good substitutes for pagers, so lower cell phone prices will decrease
demand for pagers, leading to lower prices and a smaller quantity traded. We can conclude that the price of
pagers will fall, but the quantity traded may increase, decrease, or stay the same, depending on the relative
size of the two changes.
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Which of the following is NOT part of the expenditure approach to measuring GDP?
A) gross private domestic investment B) net exports of goods and services C) net interest D) personal consumption expenditures
What must be given up to obtain an item is called
a. out-of-pocket cost. b. comparative worth. c. opportunity cost. d. absolute value.
A chain-weighted index:
A. is used to understate the rate of inflation. B. uses neighboring years' data to calculate changes in nominal GDP. C. calculates changes in prices by using an average of base years from neighboring years to obtain a more accurate measure of real GDP growth. D. is a useful tool for determining which fence to purchase.
Which of the following statements is correct?I.If other factors are held constant, the level of employment in the economy determines real Gross Domestic Product (GDP).II.According to classical economists, only voluntary unemployment exists in the long run.
A. I only B. II only C. Both I and II D. Neither I nor II