While studying with your friend, your friend states, Our leisure ...

[tsand2]

While studying with your friend, your friend states, Our leisure time increases GDP but lowers our economic welfare because it reduces the amount of goods and services we can consume. Is your friend's statement CORRECT?
 
  What will be an ideal response?

Question 2

An import quota specifies the
 
  A) price that can be charged for any imported good.
  B) amount of taxes that must be paid on any imported good.
  C) maximum amount of a good that may be imported during a specified period.
  D) minimum amount of a good that may be imported during a specified period.

[shailee]

Answer to Question 1

Your friend's assertion is incorrect on two counts. First, leisure time does not increase GDP. Indeed, by taking time away from production, leisure time decreases GDP. Second, leisure time increases our economic welfare. People enjoy their leisure time and therefore having more leisure time raises their economic welfare.

Answer to Question 2

C