Which of the following would most likely cause measured GDP to overstate the actual output produced in a year?
a. Increased production in the underground economy
b. A decline in the quality of goods and services produced
c. Increased production for home use (non-market production)
d. A decline in population
e. Increased purchases of market produced services
B
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A decrease in the demand for a product will cause output of that product to
a. increase and the demand for and prices of the resources used to produce the product to rise. b. decrease and both the demand for and prices of the resources used to produce the product to fall. c. decline; the demand for the resources used to produce the product will remain constant. d. increase; the price of resources used to produce the product will rise if their supply is elastic but fall if supply is inelastic.
Firms should hire additional units of a resource as long as the
a. marginal product of the resource exceeds the price of the resource multiplied by the quantity of output produced. b. marginal product of the resource is less than the price of the resource. c. price of the output produced is positive. d. marginal revenue product of the resource exceeds the cost of employing an additional unit of the resource.