A Car That Is Produced in 2013 Is Not Sold

question 215

Multiple Choice

A car that is produced in 2013 is not sold until 2014.According to the definition of GDP,in which year's GDP should it be counted?

• A)2013
• B)2014
• C)Half of the sales price will count as part of 2013 GDP and half will count as part of 2014 GDP.
• D)The production cost will count as part of 2013 GDP while the sales price will count as part of 2014 GDP.

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Definitions:

Variable Cost

Overheads that move in sync with the volume of manufacturing or sales, covering labor and material costs.

Fixed Costs

Expenses that do not change with the level of production or sales in the short term, such as rent, salaries, and insurance.

Break-even Point

The production level or sales volume at which total costs equal total revenue, resulting in no profit or loss.

Sales Mix

The combination of different products or services that a company sells, significantly influencing overall profitability.