Answer the following statement(s) true (T) or false (F)
1. Falling real GDP per capita can bring on unemployment, bankruptcies, and many
other human hardships.
2. With nonmarket transactions, no money is exchanged.
3. The underground economy is excluded from the GDP because it goes unreported to
the government.
4. If people start taking more three-day weekends, GDP and people’ s economic well-
being will necessarily drop.
5. The GDP often reflects important changes in the improvements in the quality of
goods.
1. TRUE
2. TRUE
3. TRUE
4. FALSE
5. FALSE
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Sandy's current consumer surplus for candy is 20. Candy is a normal good for her. When her income increases and the price of candy remains unchanged, her consumer surplus will
A) increase. B) decrease. C) remain the same. D) Not enough information.
The markets for renewable and nonrenewable resources operate to ensure that:
a. the producers using these resources earn above-normal profits even in the long run. b. the current and future prices of such resources remain high. c. the cost of extraction of such resources increases with an increase in price. d. the current price of such resources should remain low but the future prices should increase to increase profitability of the producers. e. the current and future wants for these resources are satisfied in the least costly manner.