Question

11. which of the following is a characteristic of public good?

excludability

rivalry

nonexcludability

nonrivalry

both c and d

the national income and product accounts measure

GDP in terms of total spending on all goods and services

GDP in terms of total spending on final goods and services

GDP in terms of income received in the production of final goods and survives.

both b and c

none of the above

13, assume a manufacturer purchases $80 worth of dough, cheese and pepperoni to produce ten pizzas. the ten pizzas then sell for $125, the value added by the pizza manufacture is :

$125

$80

$205

$45

none of the above

14, which of the following adds to GDP?

coca cola produces soft drinks in Mexico

Honda produces accord's in Ohio

Mr, moneybags purchases an existing share of Apple stock

an American buys a bottle of French wine in Minneapolis

15.suppose the components of spending in the national income and product accounts are:

category components of GDP

consumer spending $10500

private investment spending $1500

exports $2200

imports $3500

government purchases $3000

GDP is equal to

A,$13700

B,$20700

C,10700

D,15700

E,17300

Answer 1

Question 11 :

Answer : Public good is a good which is non rivalrous and non excludable. Therefore, both c and d is the correct option.

Question 12 :

Answer : Measuring GDP includes value of all final goods and services, whether through product approach, income approach or expenditure approach.

Therefore, both b and c is the correct option.

Question 13 :

Answer : Value Added = Price of the commodity - Cost of production

Value added = $125 - $80 = $45

Question 14 :

Answer : Coca cola producing soft drinks in Mexico, will add to the GDP of Mexico

Honda producing Accord in Ohio will add to the GDP of Ohio

Purchase of existing share of Apple will not be included in GDP as products which are resold are not included in GDP.

Purchase of Wine will be included in GDP

Question 15 :

Answer : GDP = C + I + G + X - M

C = Consumption = $ 10500

I = Private Investment Spending = $ 1500

G = Government Spending = $ 3000

X = Exports = $2200

M = Imports = $ 3500

GDP = $10500 + $1500 +$3000 + $2200 - $3500 = $13700