When We Use PPP We Can Make Valid International Comparisons

question 38

Multiple Choice

When we use PPP we can make valid international comparisons of real GDP because we

• A)use data provided by the IMF.
• B)calculate the value of goods and services produced in two countries using the same quantities.
• C)use the price data provided by the two countries but not the quantities.
• D)calculate the value of goods and services produced in two countries using the same prices.
• E)use official government data.

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Definitions:

Average Total Cost

The total cost of production divided by the total quantity produced, indicating the cost per unit of output.

Marginal Cost

A measure of the expense associated with manufacturing an additional item of a particular good.

Total Variable Cost

The sum of all variable costs (costs that change with the level of output) associated with producing a specific amount of a good or service.

Product Price

The amount of money required to purchase a good or service.