Which of the following is counted in GDP? A) the value of ...

[drink]

Which of the following is counted in GDP?
 
  A) the value of do-it-yourself work
  B) the value of leisure
  C) the value of goods and services produced in the underground economy
  D) the cost of a speed boat purchased by drug smugglers

Question 2

Define marginal cost and calculate Brazil's marginal cost of producing a ton of food when the quantity produced is 2.5 tons per day.
 
  What will be an ideal response?

[zoeyesther]

Answer to Question 1

D

Answer to Question 2

The marginal cost of a good is the opportunity cost of producing one more unit of the good. When the quantity of food produced is 2.5 tons, the marginal cost of a ton of food is the opportunity cost of increasing the production of food from 2 tons per day to 3 tons per day. The production of ethanol falls from 54 barrels per day to 40 barrels per day, a decrease of 14 barrels per day. The opportunity cost of increasing food production is the decrease in ethanol product, so the opportunity cost of producing a ton of food when 2.5 tons of food per day are produced is 14 barrels of ethanol per day.

[drink]

Excellent

[tanna.moeller]

TYSM