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The terms equality and efficiency are similar in that they both refer to benefits to society. However they are different in that a. Equality refers to uniform distribution of those benefits and efficiency refers to maximizing benefits from scarce resources b. Equality refers to maximizing benefits from scarce resources and efficiency refers to uniform distribution of those benefits c.

Equality refers to everyone facing identical tradeoffs and efficiency refers to the opportunity cost of the benefits d. Equality refers to the opportunity cost of benefits and efficiency refers to everyone facing identical tradeoffs. Stan buys a 1966 Mustang for $2,000, planning to restore and sell the car. He goes on to spend $8,000 restoring the car. At this point he can sell the car for $9,000.

As an alternative, he can spend an additional $3,000 replacing the engine. With a new engine the car would sell for $12,000. Stan should a.

Complete the repairs and sell the car for $12,000. Sell the car now for $9, 000. Never try such an expensive project again. Be indifferent between (i) selling the car now and (ii) replacing the engine and then selling it. Economic models a. Are constructed to mirror reality as closely as possible, and in this respect economic models are no different from other scientific models.

Are constructed to mirror reality as closely as possible, and in this respect economic models are very different from other scientific models. Are simplifications of reality, and in this respect economic models are no different from other scientific models. Are simplifications of reality, and in this respect economic models are very different from other scientific models. Gross domestic product measures two things at once: a. The total spending of everyone in the economy and the total saving of everyone in the economy. The total income of everyone in the economy and the total expenditure on the economy's output of goods and services.

The value of the economy's output of goods and services for domestic citizens and the value of the economy's output of goods and services for the rest of the world. The total income of households in the economy and the total profit of firms in the economy. An American company operates a fast food restaurant in Romania. Which of the following statements is accurate? The value of the goods and services produced by the restaurant is included in both Romanian GDP and U.S. One-half of the value of the goods and services produced by the restaurant is included in Romanian GDP, and the other one-half of the value is included in U.S. The value of the goods and services produced by the restaurant is included in Romanian GDP, but not in U.S.

The value of the goods and services produced by the restaurant is included in U.S. GDP, but not in Romanian GDP. GDP $110 Income earned by citizens abroad $5 Income foreigners earn here $15 Losses from depreciation $4 Indirect business taxes $6 Business subsidies $2 Statistical discrepancy $0 Retained earnings $5 Corporate income taxes $6 Social insurance contributions $10 Interest paid to households by government $5 Transfer payments to households from government $15 Personal taxes $30 Nontax payments to government $5 Refer to Table 5-1. The market value of all final goods and services produced within Wrexington in 2006 is a.

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GDP $110 Income earned by citizens abroad $5 Income foreigners earn here $15 Losses from depreciation $4 Indirect business taxes $6 Business subsidies $2 Statistical discrepancy $0 Retained earnings $5 Corporate income taxes $6 Social insurance contributions $10 Interest paid to households by government $5 Transfer payments to households from government $15 Personal taxes $30 Nontax payments to government $5 Refer to Table 5-1. Gross national product for Wrexington in 2006 is a. Suppose an economy produces only cheese and fish. In 2008, 20 units of cheese are sold at $5 each and 8 units of fish are sold at $50 each. In 2007, the base year, the price of cheese was $10 per unit and the price of fish was $75 per unit.