Economy

Correct answer: C

I is incorrect: Gross national income → GDP plus net primary income from abroad. Residence, rather than production location alone, determines this adjustment. II is correct: Disposable personal income → Income available after relevant personal taxes and transfers. It can be consumed or saved.

Correct answer: D

Its value is embodied in the final product.

Correct answer: A

I is incorrect: GDP deflator → Index comparing nominal GDP with real GDP. It reflects prices of domestically produced final output. II is correct: Per capita income → Income aggregate divided by population. It is an average and does not describe distribution by itself.

Correct answer: D

I is correct: Final good → Purchased for final use rather than further processing. Classification depends on use, not merely physical form. II is correct: Net domestic product → GDP minus consumption of fixed capital. Net measures deduct depreciation.

Correct answer: B

Saving is a flow measured over a period.

Correct answer: C

I is incorrect: Purchasing power parity → Currency comparison based on purchasing a common basket. It adjusts for differences in price levels. II is correct: Gross national income → GDP plus net primary income from abroad. Residence, rather than production location alone, determines this adjustment.

Correct answer: B

Classification depends on use, not merely physical form.

Correct answer: C

I is correct: GDP deflator → Index comparing nominal GDP with real GDP. It reflects prices of domestically produced final output. II is correct: Value added → Output value minus intermediate input value. Summing value added avoids double counting.

Correct answer: B

It can be consumed or saved.

Correct answer: D

I is incorrect: Per capita income → Income aggregate divided by population. It is an average and does not describe distribution by itself. II is correct: GDP calculated by the expenditure method → Consumption plus investment plus government purchases plus net exports. Imports are subtracted to avoid counting foreign production.

Correct answer: C

A stock differs from investment measured during a period.

Correct answer: B

I is correct: Final good → Purchased for final use rather than further processing. Classification depends on use, not merely physical form. II is correct: Value added → Output value minus intermediate input value. Summing value added avoids double counting.

Correct answer: A

I is incorrect: GDP deflator → Index comparing nominal GDP with real GDP. It reflects prices of domestically produced final output. II is correct: Gross national income → GDP plus net primary income from abroad. Residence, rather than production location alone, determines this adjustment.

Correct answer: B

It reflects prices of domestically produced final output.

Correct answer: C

I is incorrect: Final good → Purchased for final use rather than further processing. Classification depends on use, not merely physical form. II is correct: Saving → Income not consumed. Saving is a flow measured over a period.

Correct answer: B

I is incorrect: Gross national income → GDP plus net primary income from abroad. Residence, rather than production location alone, determines this adjustment. II is correct: Net domestic product → GDP minus consumption of fixed capital. Net measures deduct depreciation.

Correct answer: B

I is incorrect: Entrepreneurship → Organising resources and bearing business uncertainty. Entrepreneurs coordinate production decisions. II is incorrect: Diseconomies of scale → Long-run average cost rises as scale expands. Coordination difficulties can raise unit cost.

Correct answer: C

I is correct: Variable cost → Changes with production volume. Materials used generally rise with output. II is incorrect: Monopsony → A market with one buyer. Buyer concentration is the defining feature.

Correct answer: A

Brand or quality differences give limited pricing power.

Correct answer: D

I is incorrect: Economies of scale → Long-run average cost falls as scale expands. Specialisation and spreading some costs can lower unit cost. II is incorrect: Price discrimination → Different prices for similar units not explained by cost differences. The seller separates buyers or markets.

Correct answer: C

The result assumes other inputs are fixed.

Correct answer: A

I is incorrect: Entrepreneurship → Organising resources and bearing business uncertainty. Entrepreneurs coordinate production decisions. II is incorrect: Cartel → Agreement among producers to restrict competition. Members may coordinate output or prices.

Correct answer: D

Education and training can improve it.

Correct answer: B

I is correct: Perfect competition → Many price-taking sellers offering a homogeneous product. An individual firm has negligible influence on market price. II is incorrect: Average cost → Total cost per unit of output. It equals total cost divided by quantity.

Correct answer: C

Coordination difficulties can raise unit cost.