Question

Susan switches from going to Speedy Lube for an oil change to changing the oil in her car herself. Which of the following is correct? The value of changing the oil is
a. included in GDP whether Susan pays Speedy Lube to change it or changes it herself.
b. included in GDP if Susan pays Speedy Lube to change it but not if she changes it herself.
c. included in GDP if Susan changes it herself, but not if she pays Speedy Lube to change it.
d. not included in GDP whether Susan pays Speedy lube to change it or she changes it herself.

Answer 1

Answer:

The correct answer is option b.

Explanation:

Changing oil is a service. Susan used to go to Speedy lube for changing the oil. She used to pay them in return for their service. This payment was included in GDP. But Susan switches from going to Speedy Lube for an oil change to changing the oil in her car herself.

When Susan is changing oil herself this will not be included in the GDP as she is doing it for herself and no one is paying her for it.