Quiz_1-solutions econ 410

Quiz_1-solutions econ 410 - 2 The CPI is used to measure a...

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Solutions to Quiz 1 Spring 2011 01/25/11 1. Which of the following is correct: a. Rent you paid is not included in GDP because housework is not included. b. Housing services provided by a self-owned house are not included in GDP because there is no market for that. c. Housing services provided by a self-owned house are included in GDP despite there is no market for that. d. Both rents and housework are included in GDP. Answer: c Housing services mean shelter services – they are imputed to included in GDP; housework is cooking, taking care of children, etc. it is not included in GDP.
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Unformatted text preview: 2. The CPI is used to measure: a. Price changes at a given utility level. b. How much a good will cost in the future. c. The absolute size of the national debt. d. Your GPA. Answer: a 3. Suppose the production function is: Y=K α L β . Then: a. Marginal Product of Labor (MPL) = α K α-1 L β b. Marginal Product of Labor (MPL) = β K α-1 L β c. Marginal Product of Labor (MPL) = β K α L 1-β d. Marginal Product of Labor (MPL) = β K α L β-1 Answer: d...
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