In computing GDP, market prices are used to value final goods and services because
a. market prices reflect the values of goods and services to the buyer.
b. market prices do not change much over time, so it is easy to make comparisons between years.
c. if market prices are out of line with how people value goods, the government sets price ceilings and price floors.
d. None of the above is correct; market prices are not used in computing GDP.
A
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Which of the following would increase labor productivity?
a. A decrease in the amount of capital per unit of labor b. A change in technology that improves the quality of capital c. A decrease in the unemployment rate d. An increase in the number of inexperienced workers entering the labor force e. A decrease in the quality of capital
Which of the following is false about quantity discounts?
a. Quantity discounts are a form of price discrimination which allow a seller to charge a higher price for the first unit than for later units. b. Quantity discounts allow price discriminating producers to extract additional consumer surplus from customers. c. Price discrimination, such as offering quantity discounts, can result in a greater output, and thus greater consumer surplus and producer surplus, by a monopolist than if price discrimination was not possible. d. Quantity discounts benefit those customers who would not buy any of a monopolist's product at the price that the monopolist would charge if it could not price discriminate.