Why is it important to use real rather than nominal GDP figures when making comparisons of output across time periods?
a. The real GDP figures are a better measure of changes in the general level of prices.
b. The real figures will reflect changes in the quantity of output and not changes in the general level of prices.
c. The real figures will reflect changes in the general level of prices as well as changes in the quantity of output.
d. The real GDP figures adjust for changes in the level of employment.
B
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If Farmer Sam MacDonald can produce 200 pounds of cabbages and 0 pounds of potatoes or 0 pounds of cabbages and 100 pounds of potatoes and faces a linear possibilities curve for his farm, the opportunity cost of producing an additional pound of cabbage is ____
A) 1/2 B) 2 C) 100 D) 200
If there are short-run profits in a competitive industry, will firms enter or exit over the long run? At what point will the final equilibrium be achieved?
What will be an ideal response?