Real GDP Measures the

question 218

Multiple Choice

Real GDP measures the

• A) total profits earned by all businesses valued using prices from a single year.
• B) changes in the prices of output measured in dollars.
• C) general upward drift in prices.
• D) value of total production linked to prices of a single year.

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Definitions:

Marginal Cost Curve

A graphical representation showing the cost of producing one more unit of a good.

Economic Profit

The difference between a firm's total revenues and its total costs, including both explicit and implicit costs, representing a profit above the opportunity cost.

Explicit and Implicit Costs

Explicit costs are direct payments made to others in the course of running a business, like wages or rents, while implicit costs represent the opportunity costs of using resources owned by the business.

Marginal Costs

The cost of producing one additional unit of a good or service, reflecting the change in total cost that comes from a one unit increase in output.