A New Technology Is Discovered Which Results in All New

question 239

Multiple Choice

A new technology is discovered which results in all new cars producing 50 percent less pollution.Which of the following is true?

• A)GDP will increase to reflect the fact that the air we breathe is cleaner.
• B)GDP will increase if there is an increase in the production cost and price of the car.
• C)GDP increases anytime pollution is reduced.
• D)GDP will decrease.
• E)Real GDP increases because the air is cleaner,but nominal GDP does not change since air is free.

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Definitions:

Total-Product Schedule

A table that shows the output of goods or services that a firm can produce with different combinations of input resources.

Constant Price

Prices adjusted for inflation to reflect the real value of goods and services over time.

Resource Employment

The utilization of various inputs like labor, capital, and raw materials in the production of goods and services.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a resource or input.