Final answer:
A factory's electricity bill is an indirect cost, as it supports overall operations rather than being tied to the production of a specific product. In terms of GDP inclusion, hospital stays, child care by a licensed center, and new car sales are included; whereas the rise in life expectancy, unpaid child care by a grandmother, used car sales, and the variety of cheese in supermarkets are not.
Step-by-step explanation:
The question is asking to distinguish between a salesperson's salary and a factory's electricity bill in terms of direct and indirect costs. In this case, a salesperson's salary is usually considered a direct cost because it can be directly associated with the sales activity of a business. On the other hand, a factory's electricity bill is considered an indirect cost as it is not directly tied to the production of a specific product; rather, it supports the overall operation of the factory where various products may be produced.
Let's apply this understanding to GDP components. The Gross Domestic Product (GDP) measures a country's economic activity and includes all finished goods and services produced within a country in a given period. Here's a breakdown of the items mentioned in relation to GDP inclusion:
- The cost of hospital stays - Included in GDP as it is a service provided.
- The rise in life expectancy over time - Not included in GDP as it is a non-monetary measure of societal progress.
- Child care provided by a licensed day care center - Included in GDP as it is a paid service.
- Child care provided by a grandmother - Not included in GDP, as it is a non-market activity and often unpaid.
- A used car sale - Not included in GDP as it is not the production of a new good.
- A new car sale - Included in GDP as it represents the production of a new good within the country.
- The greater variety of cheese available in supermarkets - Not included directly; what matters is the production of cheese, not the variety.
- The iron that goes into the steel that goes into a refrigerator bought by a consumer - Included as part of the refrigerator's production, which is counted in GDP.