If the Number of Worker-Hours in an Economy Is 100

question 7

Multiple Choice

If the number of worker-hours in an economy is 100 and its labour productivity is 5 units of output per worker-hour, the economy's real GDP:

• A)is $20.
• B)is $500.
• C)is $5000.
• D)cannot be calculated.

---

Definitions:

Cost-plus Pricing

A pricing strategy where a fixed percentage or specified amount is added to the production cost to determine the sell price of a product or service.

Return on Investment

A profitability metric calculated as the net gain from an investment relative to its initial cost, used to measure the efficiency or profitability of an investment.

Selling Price

The sum a purchaser spends to acquire a good or service from a vendor.

Absorption Costing

A cost accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.