3. Categories of expenditures
Paolo and Sharon Zambetti live in Swarthmore, PA. Their son, Van, is an artist living in New York City.
For each of the following transactions that occur in their lives, identify whether it is included in the
calculation of U
1. Refer to the above short-run data. The profit-maximizing output for this firm is:
A. above 440 units.
B. 440 units.
C. 320 units.
D. 100 units.
2. Refer to the above short-run data. Which of the following is correct?
A. This firm will
5. Real versus nominal GDP
Consider a simple economy that produces two goods: pens and envelopes. The following table shows
the prices and quantities for the goods over a three-year period.
Business Cost of Production
1. Suppose that a business incurred implicit costs of $200,000 and explicit costs of $1
million in a specific year. If the firm sold 4,000 units of its output at $300 per unit, its
accounting profits were:
A. $100,000 and its e