Need help understanding and answering these questions Thanks

Need help understanding and answering these questions. Thanks

1. For an economy as a whole, income must equal expenditure because (a) the number of firms is equal to the number of households in an economy. (b) individuals can only spend what they earn each period. (c) every dollar of spending by some buyer is a dollar of income for some seller (d) every dollar of saving by some consumer is a dollar of spending by some other consumer 2. Suppose that an economy produces 20,000 units of good A which sells at $3 a unit and 0,000 units of good B which sells at $1 per unit. Production of good A contributes (a) 1/3 times as much to GDP as the production of good B (b) 3/2 times as much to GDP as the production of good B (c) 3 times as much to GDP as the production of good B (d) 2/3 times as much to GDP as production of good B 3. Joe and Jim purchase vegetables at a grocery store, but Jim also grows vegetables in his back yard. Regarding these two practices, which of the following statements is correct? (a) Only Joes grocery store purchases are included in GDP. (b) Only Joes and Jims grocery store purchases are included in GDP. (c) Joes and Jims grocery store purchases are included in GDP. The vegetables from Jims backyard garden are included at their market value. (d) Joes and Jims grocery store purchases are included in GDP. The vegetables from Jims backyard garden are included at their market value, if Jim provides this

Solution

Ans 1)

Individual always face budget constraints as they cannt spend more than what they earn

hence option B is correct asnwer

Ans 2)

Contrinbution by A 20000*2=60000 and Contribution by B 40000*1=40000

Hence Contribution of A is 1.5 times of that B

Hence option B is correct response

Ans 3)

Option D is correct response as if Jims provides the information about the veggies grown at backyard