Homework Sheet Problem 1 Using the definition of GDP determine whether the following economic activities would be included (I) in GDP or excluded (E) the sale of a stock the sale of a home owned by Mr Jones the government builds a new office building the purchase of a crane by a construction company a factory that was built to replace one that was destroyed in an earthquake HOMEWORK Unit FOUR Optional Chapter 12 'The Design of the Tax System' Q5 What is the marginal tax rate on a lump sum tax How is this related to the efficiency of the tax Chapter 23 'The Measuring a Nation's Income' Q2 Which contributes more to GDPthe production of an economy car or the production of a luxury car Why PA10 The participation of women in the U S labor force has risen dramatically since 1970 How do you think this rise affected GDP Now imagine a measure of well being that includes time spent working in the home and taking leisure How would the change in this measure of well being compare to the change in GDP Can you think of other aspects of well being that are associated with the rise in women's labor force participation Would it be practical to construct a measure of well being that includes these aspects PA11 One day, Barry the Barber, Inc , collects $400 for haircuts Over this day, his equipment depreciates in value by $50 Of the remaining $350, Barry sends $30 to the government in sales taxes, takes home $220 in wages, and retains $100 in his business to add new equipment in the future From the $220 that Barry takes home, he pays $70 in income taxes Based on this information, compute Barry's contribution to the following measures of income Gross domestic product Net national product National income Personal income Disposable personal income

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Homework Sheet Problem 1: Using the definition of GDP determine whether the following economic activities would be included (I) in GDP or excluded (E). ____

Homework Sheet

Problem 1: Using the definition of GDP determine whether the following economic activities would be included (I) in GDP or excluded (E).

____ the sale of a stock

____ the sale of a home owned by Mr. Jones

____ the government builds a new office building

____ the purchase of a crane by a construction company

____ a factory that was built to replace one that was destroyed in an earthquake

HOMEWORK Unit FOUR - Optional

Chapter 12 'The Design of the Tax System'

Q5 What is the marginal tax rate on a lump-sum tax? How is this related to the efficiency of the tax?

Chapter 23 'The Measuring a Nation's Income'

Q2 Which contributes more to GDPthe production of an economy car or the production of a luxury car? Why?

PA10 The participation of women in the U.S. labor force has risen dramatically since 1970.

How do you think this rise affected GDP?
Now imagine a measure of well-being that includes time spent working in the home and taking leisure. How would the change in this measure of well-being compare to the change in GDP?
Can you think of other aspects of well-being that are associated with the rise in women's labor-force participation? Would it be practical to construct a measure of well-being that includes these aspects?

PA11 One day, Barry the Barber, Inc., collects $400 for haircuts. Over this day, his equipment depreciates in value by $50. Of the remaining $350, Barry sends $30 to the government in sales taxes, takes home $220 in wages, and retains $100 in his business to add new equipment in the future. From the $220 that Barry takes home, he pays $70 in income taxes. Based on this information, compute Barry's contribution to the following measures of income.