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Some years ago, the movie Avatar overtook Titanic as the highest grossing movie of all time. An article published by Forbes.

Some years ago, the movie Avatar overtook Titanic as the highest grossing movie of all time. An 

article published by Forbes.com at that time noted that "the average ticket price in 2008 (Avatar was 

released in 2009) was US$7.18, up 56% from the price in 1997 when Titanic was in theatres". The 

article says that a look at domestic grossed (box office receipts) adjusted for inflation shows a more 

realistic view of Avatar's performance. 

          1.        Why would adjusting for inflation show more realistic view of Avatar's performance 

                     at the box office? 

 

          2.        Which would be the appropriate measure of how well a movie performed at the box 

                     office: the dollar value of tickets or the number of tickets sold?  Hy don't the 

                     newspapers report the number of tickets sold rather than the dollar value of tickets 

                     sold?   

 

          3.        Would comparing the total number of tickets sold by all movies in 1939 with the 

                     total number of movies sold in 2015be a good way to measure how the relative 

                     importance of the movies in the economy has changed overtime?  Briefly explain. 

 

(b)       Does GDP measure what we want to measure? (8 marks) 

 

          1.        Why does the size of the country's GDP matter? How does it affect the quality of life 

                     of the country's people? 

 

          2.        Why is GDP an imperfect measure of economic wellbeing? 

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