ECON 252 Final - Spring 2010

ECON 252 Final - Spring 2010 - 1 GDP is defined as a the...

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1. GDP is defined as a) the market value of all goods and services produced within a country in a given period of time. b) the market value of all goods and services produced by the citizens of a country, regardless of where they are living, in a given period of time. c) the market value of all final goods and services produced within a country in a given period of time. d) the market value of all final goods and services produced by the citizens of a country, regardless of where they are living, in a given period of time. 2. Suppose there are only two firms in an economy: Rolling Rawhide produces rawhide and sells it to Chewy Chomp, Inc., which uses the rawhide to produce and sell dog chews. With each $2 of rawhide that it buys from Rolling Rawhide, Chewy Chomp, Inc. produces a dog chew and sells it for $5. Neither firm had any inventory at the beginning of 2007. During that year, Rolling Rawhide produced enough rawhide for 1000 dog chews. Chewy Chomp, Inc. bought 75% of that rawhide for $1500 and promised to buy the remaining 25% for $500 in 2008. Chewy Chomp, Inc. produced 750 dog chews during 2007 and sold each one during that year for $5. What was the economy's GDP for 2007? 3. Anna, a U.S. citizen, works only in Germany. The value she adds to production in Germany is included 4. Compared to bonds, stocks offer the holder ______ risk and _______ expected return. 5. Ceteris paribus, an improvement in technology will lead to a _______ increase in labor productivity and a ______ increase in the rate of growth in real income. a) temporary; temporary c) temporary; permanent b) permanent; temporary d) permanent; permanent 6. In an imaginary economy, consumers buy only hot dogs and hamburgers. The fixed basket consists of 10 hot dogs and 6 hamburgers. A hot dog cost $3 in 2006 and $5.40 in 2007. A hamburger cost $5 in 2006 and $6 in 2007. Which of the following statements is correct? Econ 252 Final – BLUE Page 1 of 7 Spring 2010
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In the countries of Ricardoville and Smithland two goods are produced: Wine and Cheese. The hours of labor required to produce bottles of wine and pounds of cheese in these countries are shown in the table below: WINE (Hours/Bottle) CHEESE (Hours/Pound) Ricardoville 6 4 Smithland 4 3
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