Why is growth in GDP different from growth in a nation's standard of living? Is it possible for a nation's GDP to grow while its standard of living falls?
What will be an ideal response?
The standard of living is measured by real GDP per person, so growth in the standard of living equals growth in real GDP per person. The growth rate of real GDP per person equals the growth rate of real GDP minus the growth rate of the population. Hence it is indeed possible for a nation's GDP to grow, while its standard of living decreases. This outcome occurs whenever the population grows more rapidly than real GDP.
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A market's structure is described by
A) the number of firms in the market. B) the ease with which firms can enter and exit the market. C) the ability of firms to differentiate their product. D) All of the above.
If a local diner can sell 50 burgers per day at a price of $5 each, but must reduce the menu price to $4.95 to sell one more burger, what is the marginal revenue of the 51st burger?
A. $252.45. B. $2.45. C. -$0.05. D. $4.95.