Q1. Relate opportunity costs to why profits encourage entry into purely competitive industries and explain how losses encourage exit from purely competitive industries?

Q2. Consider the following data on U.S. GDP:

Year Nominal GDP GDP Deflator
( in billions) (BASE YEAR 1996)
2000 9,873 118
1999 9,269 113

a) Illustrate what was the growth rate of nominal GDP between 1999 & 2000(Note: The growth rate is the percentage change from one period to the next.)

b) Illustrate what was the growth rate of the GDP deflator between 1999 & 2000

c) Illustrate what was real GDP in 1999 measured in 1996 prices?