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The island of Freedonia has two residents, Stan and Fran. In year one Freedonia produces goods worth $500, and consumption is divided evenly between Stan and Fran, so that each consumes $250 worth of goods. In year two, the real value of production rises to $600, but this time Fran receives $500 worth of goods and Stan receives only $100 worth of goods. What can we say about the GDP and collective welfare of Freedonia in year two relative to year one? GDP has risen and welfare has fallen Neither GDP nor welfare has risen GDP has stayed the same and welfare has ris GDP has risen but we cannot be sure what ha GDP has risen and welfare has stayed the sar Group of answer choices

The island of Freedonia has two residents, Stan and Fran. In year one Freedonia produces goods worth $500, and consumption is divided evenly between Stan and Fran, so that each consumes $250 worth of goods. In year two, the real value of production rises to $600, but this time Fran receives $500 worth of goods and Stan receives only $100 worth of goods. What can we say about the GDP and collective welfare of Freedonia in year two relative to year one? GDP has risen and welfare has fallen Neither GDP nor welfare has risen GDP has stayed the same and welfare has ris GDP has risen but we cannot be sure what ha GDP has risen and welfare has stayed the sar Group of answer choices

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The island of Freedonia has two residents, Stan and Fran. In year one Freedonia produces goods worth $500, and consumption is divided evenly between Stan and Fran, so that each consumes $250 worth of goods. In year two, the real value of production rises to $600, but this time Fran receives $500 worth of goods and Stan receives only $100 worth of goods. What can we say about the GDP and collective welfare of Freedonia in year two relative to year one? GDP has risen and welfare has fallen Neither GDP nor welfare has risen GDP has stayed the same and welfare has ris GDP has risen but we cannot be sure what ha GDP has risen and welfare has stayed the sar Group of answer choices
Transcribed Image Text:The island of Freedonia has two residents, Stan and Fran. In year one Freedonia produces goods worth $500, and consumption is divided evenly between Stan and Fran, so that each consumes $250 worth of goods. In year two, the real value of production rises to $600, but this time Fran receives $500 worth of goods and Stan receives only $100 worth of goods. What can we say about the GDP and collective welfare of Freedonia in year two relative to year one? GDP has risen and welfare has fallen Neither GDP nor welfare has risen GDP has stayed the same and welfare has ris GDP has risen but we cannot be sure what ha GDP has risen and welfare has stayed the sar Group of answer choices
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