Why is GDP not a good measure of aggregate welfare?
A. GDP includes the value of intermediate goods
B. trade between countries is not included in GDP
C. GDP does not include the value of production done in the home
D. the government calculates GDP
Answer: C. GDP does not include the value of production done in the home
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If the price of jelly increases 10 percent and the amount of peanut butter purchased decreases 20 percent, then the cross-price elasticity of these goods is:
A. 2. B. 5. C. - 2. D. 0.5.
The law of increasing costs states that
A. opportunity costs decrease as more of one good is produced. B. increasing resource prices are inevitable because of scarcity. C. opportunity costs increase as more of one good is produced. D. resources can be easily adapted to the production of any good