One of the flaws of GDP is that it
A. includes only transactions that take place in formal businesses.
B. includes measures of changes of life associated with producing output.
C. includes measures of the underground economy.
D. ignores transactions that do not take place in organized markets.
Answer: D
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If real GDP remains unchanged, the population size is stationary, and people have more leisure time, then per capita real GDP will _____
a. overstate actual economic growth b. understate actual economic growth c. be the most accurate measure of actual economic growth d. show that actual economic growth was negative e. show that actual economic growth was positive
Two firms compete as a Stackelberg duopoly. The demand they face is P = 40 ? Q. The cost function for each firm is C(Q) = 4Q. The profits of the two firms are:
A. ?L = $81; ?F = ?$40.5. B. ?L = $162; ?F = $40.5. C. ?L = $162; ?F = $81. D. ?L = $81; ?F = $40.5.