When a firm produces and sells a refrigerator worth $1,000, its contribution to the gross domestic product (GDP) on the income side is measured by:
a. the price paid by the consumer
b. the investment made by the firm to manufacture the refrigerator.
c. the stock of inventories used by the firm to manufacture the refrigerator.
d. the cost of raw materials used by the firm to manufacture the refrigerator.
e. the sum of the wages, interest, and rent paid by the firm's owners and the profit of the firm.
e
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If new firms enter a perfectly competitive industry seeking economic profit and begin producing goods, which of the following will occur?
a. The market supply curve will shift leftward with movement along an unchanged demand curve. b. The market supply curve will shift rightward with movement along an unchanged demand curve. c. The market supply and demand curves will both shift to the left. d. The market supply and demand curves will both shift to the right. e. There will be movement down and to the right along a fixed supply curve.
Which of the following statements about quotas is correct?
a. They benefit domestic consumers through lower prices. b. They benefit domestic producers through higher prices. c. They raise world output. d. They cause outward shifts in the domestic and foreign production possibilities frontiers. e. They benefit domestic producers through increased competition that stimulates innovation.