A steel company sells some steel to a bicycle company for $150 . The bicycle company uses the steel to produce a bicycle, which it sells for $250 . Taken together, these two transactions contribute
a. $150 to GDP.
b. $250 to GDP.
c. between $250 and $400 to GDP, depending on the profit earned by the bicycle company when it sold the bicycle.
d. $400 to GDP.
b
You might also like to view...
A monopolist faces a demand curve given by P = 60 -2Q and has total costs given by TC = Q2. Its marginal revenue is MR = 60 - 4Q and its marginal cost is MC = 2Q. Now suppose that the country in which this monopolist is located decides to engage in international trade. The world price of the product produced by the monopolist is $10. What is the firm's profit-maximizing output level?
a. 5 b. 20 c. 30 d. 40
A Pigouvian tax is a tax designed to ________
A) induce consumers of a good to reduce the consumption of the good B) induce producers generating negative externalities to reduce production C) induce producers generating positive externalities to reduce production D) induce producers to stop the production of a good