Final answer:
Raw materials are a product cost related to inventory. The cost of hospital stays, child care by a licensed day care center, new car sales, and the iron used in the manufacture of a refrigerator are included in GDP, while the rise in life expectancy, child care by a grandmother, used car sales, and the variety of cheese in supermarkets are not included in GDP.
Step-by-step explanation:
Among the options provided, the one that is a product cost related to inventory is c. Raw materials. Product costs are those costs that are incurred to create a product and include costs related to direct materials, direct labor, and manufacturing overhead. Raw materials are the basic substances that are transformed into products or components of a product during the manufacturing process and are therefore considered a product cost.
Now, to answer another part of the student's homework related to GDP (Gross Domestic Product), the following items are included in GDP:
- a. The cost of hospital stays - Includes transactions for healthcare services.
- c. Child care provided by a licensed day care center - Represents a service that is paid for, contributing to the economy.
- f. A new car sale - Represents the production of new goods, contributing to the economy.
- h. The iron that goes into the steel that goes into a refrigerator bought by a consumer - Accounts for the raw materials used in producing goods for consumption.
The following items are not included in GDP:
- b. The rise in life expectancy over time - A quality-of-life indicator, not a market transaction.
- d. Child care provided by a grandmother - Informal work that typically does not involve a monetary transaction.
- e. A used car sale - Only reflects the resale of goods, not the production of new goods.
- g. The greater variety of cheese available in supermarkets - While it indicates consumer choice, it does not represent a direct economic transaction.
GDP measures the market value of all final goods and services produced within a country in a given period and includes various components such as consumer spending, investment by businesses, government spending, and net exports. It does not include non-market transactions, resale of goods, or indicators of quality of life and variety.