Which of the Following Transactions Adds to U

question 176

Multiple Choice

Which of the following transactions adds to U.S.GDP for 2006?

• A)In 2006, Marvin Windows manufactures 20 windows that will eventually be installed in an office building in Minneapolis.The windows remain in Marvin's inventory at the end of 2006.
• B)An Irish marketing consultant works in Boston during the summer of 2006 and earns $30,000 during that time.
• C)When John and Jennifer were both single, they lived in separate apartments and each paid $750 in rent.John and Jennifer got married in 2006 and they bought a house that, according to reliable estimates, could be rented for $1,600 per month.
• D)All of the above transactions adds to GDP for 2006.

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Definitions:

MR = MC Rule

A principle in economics where the optimal level of output is reached when marginal revenue equals marginal cost.

Price Taker

An individual or company that must accept prevailing prices in the market of its products or services, lacking the market power to influence prices on its own.

Break Even

The point at which total cost and total revenue are equal, resulting in no net loss or gain.

Minimum Output

refers to the lowest level of production that a company can sustain over the long term.