Following Is Data for a Hypothetical Economy

question 114

Multiple Choice

Following is data for a hypothetical economy.The base year is 2002 (Price index = 100) .

-Refer to the above data.Real GDP in 2006 was approximately:

• A) $3,433 billion.
• B) $3,743 billion.
• C) $4,023 billion.
• D) $4,031 billion.

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Definitions:

Levels

Levels refer to the different positions or stages in a hierarchical structure or process, indicating varying degrees of magnitude, importance, or progress.

Efficient Scale

The level of production that minimizes long-term average total costs, resulting from economies of scale without incurring diseconomies of scale.

Marginal Cost

The supplementary cost attached to the output of an additional product or service unit.

Diminishing Marginal Product

The principle stating that as one inputs more of a factor of production while holding other inputs constant, the added output produced from each additional unit of the variable input eventually decreases.