INTERMEDIATE MICROECONOMICS A
MODERN APPROACH 10TH EDITION
EXAMINATION TEST COMPLETE QUESTIONS
AND ANSWERS
◉ Nominal GDP.
Answer: production of goods and services
at current prices.
Σ(price per good x quantity of good)
◉ Real GDP.
Answer: production of goods and services at
constant prices. Σ(base year price per good x quantity of good)
◉ Higher GDP per person indicates.
Answer: a higher
standard of living.
◉ Factors that contribute to well-being that are not included in GDP.
Answer: The value of leisure
The value of the environment
, The value of home production
The effects of unequal income distribution
◉ The consumer price index (CPI).
Answer: measure of the overall cost of the goods and services in a
fixed basket bought by a typical consumer; used to monitor changes
in the cost of
living over time; used to correct for inflation for comparing cost of
living over time
(base year basket quantities x current year prices/base year basket
quantities x base year prices)x 100
◉ Inflation equation.
Answer: 100% x (CPI2-CPI1)/CPI1
◉ Factors that contribute to cost of living that are not taken into
account in the CPI.
Answer: Substitution bias
Introduction of new goods
Unmeasured quality change
◉ Interest.
Answer: represents a payment in the future
MODERN APPROACH 10TH EDITION
EXAMINATION TEST COMPLETE QUESTIONS
AND ANSWERS
◉ Nominal GDP.
Answer: production of goods and services
at current prices.
Σ(price per good x quantity of good)
◉ Real GDP.
Answer: production of goods and services at
constant prices. Σ(base year price per good x quantity of good)
◉ Higher GDP per person indicates.
Answer: a higher
standard of living.
◉ Factors that contribute to well-being that are not included in GDP.
Answer: The value of leisure
The value of the environment
, The value of home production
The effects of unequal income distribution
◉ The consumer price index (CPI).
Answer: measure of the overall cost of the goods and services in a
fixed basket bought by a typical consumer; used to monitor changes
in the cost of
living over time; used to correct for inflation for comparing cost of
living over time
(base year basket quantities x current year prices/base year basket
quantities x base year prices)x 100
◉ Inflation equation.
Answer: 100% x (CPI2-CPI1)/CPI1
◉ Factors that contribute to cost of living that are not taken into
account in the CPI.
Answer: Substitution bias
Introduction of new goods
Unmeasured quality change
◉ Interest.
Answer: represents a payment in the future
