What would happen to measured GDP if more people started hiring workers to do house chores such as cooking and cleaning?
What will be an ideal response?
GDP is the value of the final goods and services that are produced in an economy over a specified time period. However, GDP, as measured, does not include the value of household production people do for themselves around their homes. Therefore if you wash your car at your home or apartment, the value of the car washing is not included in GDP. However if you hired someone to wash your car at your home or apartment, the value of the car washing would be included in GDP. Thus if more people started hiring workers to do household chores, measured GDP would increase.
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People in the city of Maurus have a flatter demand curve for television sets than people in the city of Sienna. It can be concluded that a producer of television sets can price discriminate by charging a higher price in Maurus than in Sienna
Indicate whether the statement is true or false
Suppose acre A is located at the market with zero transport costs of bringing its radishes to market. It costs acre B, located 20 miles away, $500 to transport its radishes to market. If demand for radishes is large enough so that both acres will be used to produce radishes,
a. the owner of acre A will earn zero location rent b. the owner of acre B will earn location rent of $500 c. the owners of acres A and B will earn combined location rents of $1,000 d. as long as one acre is located at the market, neither landowner of acre A nor B will earn location rent e. the owner of acre A will earn a location rent of $500