ECON 1002 Lecture Notes - Lecture 4: Production Function, Capital Formation, Sewing Machine

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rubyllama377

27 Mar 2018

School

Department

Economics

Course

ECON 1002

Professor

Christina Kelton

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Document Summary

No product is always final or always intermediate. A good or a service may be intermediate for one purchaser and final for another purchaser. When purchased by a household, it is a final product, and when purchased by a restaurant, it is an intermediate product. The services of a self-employed mechanic when purchased by a household, is a final product but when purchased by a factory it is an intermediate product. A cycle when purchased by an individual is a final product but when purchased by a cycle dealer it is an intermediate product. The essential point to be noted is that no good or service is final or intermediate in itself. It all depends on whether it is purchased for own use or for resale. Note: end- use of the goods is the principal basis of classifying the goods into intermediate and final goods. O to differentiate between final or intermediary we check the end use of the good.

Related Questions

Which of the following is included in U.S. GDP?

i) the rental value of homes owned by U.S. citizens.

ii) the production of Suburban SUVs by GM in its plant in Mexico.

iii) Tickets sold by U2 for concerts held in the United States.

A) ii only.

B) ii and iii.

C) i, ii and iii.

D) i and iii.

E) i only.

Which of the following is NOT directly included in Canadian GDP?

A) The purchase of tickets to a Kanye West concert in Montreal.

B) The sale of tickets to the Vancouver Oympics to U.S. citizens.

C) Gasoline purchased by a tour bus operator in Quebec.

D) Bus tickets sold to tourists for a tour bus ride in Montreal.

E) All of the items would be included in Canadian GDP.

Which of the following is classified as a final good or service?

i. tires bought by GM to put on new Tahoes

ii. mustard bought by Subway to put on its sub sandwiches

iii. your purchase of online access to the Wall Street Journal

A) i and ii.

B) i, ii and iii.

C) iii only.

D) ii and iii.

E) ii only.

Which of the following correctly describes a final good?

i) A final good is bought by its final consumer.

ii) A final good can be used by a firm as a component of another good or service.

iii) Investment goods cannot be a final good.

A) i only.

B) i and ii.

C) i, ii and iii.

D) i and iii.

E) ii and iii.

A restaurant buys fish to offer as a daily menu special. The purchase of the fish by the restaurant is

A) a consumption expenditure.

B) an investment.

C) an intermediate good.

D) an example of government expenditures on goods and services.

E) part of net exports if the fish was caught beyond the U.S. border.

Which of the following is classified as an intermediate good?

i) the purchase of a Big Mac by a college student

ii) McDonald's purchase of pickles

iii) a McDonald's restaurant owner's interest payment for the loan on her building.

A) ii only.

B) ii and iii.

C) i only.

D) i and iii..

E) i, ii and iii.

Which of the following would NOT be directly included in the U.S. GDP in 2010?

A) the market value of restaurant meals sold in 2010

B) the market value of the jet fuel bought by Delta to use for its flights in 2010

C) the value of the automobiles produced in 2010 at the Toyota plant located in Georgetown, KY

D) legal services provided to first time home buyers during 2010

E) the purchase of a new home in Atlanta, Georgia in 2010

goldmuskrat784

Increasing returns to scale exist when doubling all inputs less than doubles output.

True
False

Because patents provide strong incentives to develop new technologies, they tend to help to increase economic growth.

True
False

Which of the following is an example of a final good or service?

A iPod purchased by a impoverished Economics instructor so he can listen to his favorite song, "How Broke I Am".

Vegetables purchased by a local restaurant to make soup.

Iron ore purchased by U.S. Steel Corp. to make steel for Ford.

the lumber produced by Boise Cascade and sold to a builder of new homes.

Which of the following is not part of National Income?

	A.	Employee compensation.
	B.	Interest.
	C.	Rent.
	D.	All are components of National Income

51. Gross national product equals:
A) the aggregate output of the citizens & businesses of aneconomy in a 1-year period.
B) the aggregate final output of the citizens & businesses ofan economy in a 1-year period.
C) the total market value of all goods & services produced inan economy in a 1-year period.
D) the total market value of all final goods & servicesproduced in an economy in a 1-year period.

52. Which of the following is not included in GNP but is includedin GDP?
A) The value of a Portuguese company's production in the UnitedStates.
B) The income of a U.S. citizen working in Portugal.
C) The value of a U.S. company's production in Portugal.
D) The sales of a U.S. company to U.S. citizens.

53. To calculate GDP, multiply the __________ of each final goodand service produced in an economy in a year by its __________ andthen sum the result.
A) quantity; share in total output C) price, share in totaloutput
B) quantity; price D) price, quality

54. Counting both the value of the flour used to make a loaf ofbread and the value of the loaf of bread as part of GDP:
A) is necessary to accurately compute GDP.
B) is incorrect because bread is an intermediate product.
C) is incorrect because flour is an intermediate good.
D) is incorrect because flour is a final good.

55. Suppose the value of your home increases from $100,000 to$125,000. If you continue to live in your home, the increase in itsvalue:
A) adds nothing to GDP. C) increases GDP by $100,000.
B) increases GDP by $25,000. D) increases GDP by $125,000.

56. If a used car dealer buys a car for $6000 and resells it for$6500, how much has been added to GDP?
A) nothing. B) $500. C) $6000. D) $6500

57. Which of the following is not a part of this year's GDP?
A) The value of a product produced last year but sold thisyear.
B) The value of a haircut.
C) The value of a new car produced and purchased during theyear.
D) The value of new homes built this year, regardless of whetherthey are sold.

58. Which of the following would not increase this year'sGDP?
A) Home repairs performed by the owner.
B) A commission charged by your broker when you sold 100 shares ofBorden stock.
C) The sales of a corporation.
D) The value of a doctor's services to his or her patients.

59. The circular flow model shows:
A) the movement of expenditures and factor payments through theeconomy.
B) how national income is distributed to individuals.
C) how national income changes over time.
D) the movement of goods from one business to another.

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ECON 1002 Lecture Notes - Lecture 4: Production Function, Capital Formation, Sewing Machine

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