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Author Question: When lumber from Brazilian forests is used by a U.S.-owned company to produce furniture in Canada, ... (Read 85 times)

Zulu123

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on: Jun 29, 2018
When lumber from Brazilian forests is used by a U.S.-owned company to produce furniture in Canada, the value of the furniture produced will be counted as a final good in
 
  A) Canada's GDP. B) U.S. GDP. C) Brazil's GNP. D) Brazil's GDP.

Question 2

Why is it more difficult for a firm to calculate the marginal revenue product of a player in the industry of professional sports versus that of a worker in a competitive manufacturing industry?
 
  What will be an ideal response?


carlsona147

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Reply #1 on: Jun 29, 2018
Answer to Question 1

A

Answer to Question 2

The owner of a professional sports team can only estimate how much value adding a particular player will have in terms of increased ticket sales and increased television revenue. However, even if the player is just as productive as always fans may lose interest and ticket sales can drop because the team is doing poorly or other factors independent of the player's productivity in the game. In a manufacturing industry it is usually easier to calculate the marginal productivity of a worker since it is something that is easily observed. Also, the price in a competitive manufacturing industry is likely to be more stable and thus the MRP as well.


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