Kate's factory has low fixed costs and high variable costs. NNP = GNP - Depreciation = 13300-1400 = 11900 Corporate earnings 1,250 C. a decrea. Calculate the GDP of this economy by the product and the expenditure approach, assuming that all values ar, Which of the following would show an efficient economy? Consider the following closed-economy IS-LM model: Consumption function Investment function Government purchases and taxes Money demand function Money supply Price level : C = 800 + 0.80 (Y - T) : I, Suppose that some CPI data for a particular economy is shown in the following table. Experts are tested by Chegg as specialists in their subject area. The realization of these economies of scale, however, is far, Consider a simple economy that produces two goods: pens and oranges. For example, in 2011, t, a. . The first event is recorded as an example. Question: Consider a simple economy that produces only cell phones. a. C. maximizing the returns to factors of production. Take the following information as given for a small, imaginary economy: -When income is $10,000, consumption spending is $6,500. You have 3 workers: worker A, B, and C. Worker A can produce 4 tables or 8 chairs in one day. 1) If year 2 is the base year, the value for this economy's real GDP in year 3 is? If the wage is $10 and the rental rate on capital is $20, the short run marginal cost is _____. Consider a simple economy that produces two goods: pencils and muffins. Product Quantity Price Per Unit What is the optimal labor demand in the short run? For example, is aluminum used to produce a new mountain bike included in GDP? Fill in the missing values. In the short run, a firm that produces and sells cell phones can adjust a) where to produce along its long-run average-total-cost curve. (Part A) You know that you are operating in a monopolistically competitive market, that is, you are a small part. (a). \\ a. Complete the second row of the table by filling in the expected and actual real interest rates on car loans immediately after the increase in the money supply (MS). how the actual output will deviate from potential output. Fill in the missing values in the following . Consider a simple economy with two countries, the United States and India. B. the economy is near full capacity. Assume a December 31 closing date. What is the marginal pro. Find the equilibrium real interest rate. Explain briefly why an economy that c. The table below provides information about an open economy with the public sector. Velocity and the quantity equation Consider a simple economy that produces only pies. Draw a production possibility curve (PPC). Com, Consider the Small Open Economy Model. selecting the answers closest to the values you calculate. Resources in an economy are not fully utilized. Ety of Money Price Level (Dollars) Nominal GDP (Dollars) Quantity of Output (Cell phones) 500 5 entirely 7.20 15 from 2017 to 2018. Find what is the short-run total cost function C (C as a fu, A small open economy trades food and clothing on world markets at prices PTF and PTC. C. each additional unit is cheaper to produc, When economies of scope are strong, a. large-scale, single-product firms will be able to reach a minimum efficient scale (MES) more quickly. The following table contains information on the economy's money supply, velocity of money, price level, and output. The economy has two sectors-cloth and food. For example, in 2011, the money s, Suppose Home has 300 units of labor. Agree. Consider a simple economy that produces only croquettes. Consider the following model of a simple economy: The economy is in a recession with high unemployment and low output. What is the cost of one more beer? D. all of the above, Consider the following short run production function. = 11860 - 1250 + 600 = 11210 GDP deflator = Nominal GDP / Real GDP 100. Velocity \ of \ money \ (2011) \ = \ 15 Velocity and the quantity equation Consider a simple economy that produces only cell phones. Then use the income-expenditure(45 line) diagram to determine the equilibrium level of GDP. \hline \text { white, male } & 210 & 3,360 & 13,610 & & 22,050 \\ Think about the following news item. Production Combin, Consider the following information describing an economy with demand-determined output. Many U.S. citizens currently work in foreign countries while few foreign citizens currently work in the U.S. The table gives the number of suicides estimated in the U.S. for a recent year by age, race (black or white), and sex. The marginal product of oranges in one plant is MP^1=1000-O_1, Which of the following could be evidence of a market failure? Economy A has a high average rate of time preference relative to economy B?s low average rate of time preference. This tends to ______ saving, thereby ______ the quantity of investment in the economy and ______ the economy's long-run growth rate. For example, in 2011, the money supply was $240, the price of a cell phone was $7.20, and the economy produced 500 cell phones. These sweaters are made using a combination of labor and knitting machines. We are interested in possible relationships between age, race, and sex. B. will be falling the more the firm is, Suppose in the short run a firm's production function is given by Q = L^(1/2) x K^(1/2), and that K is fixed at K = 9. The following table contains information on the economy's money supply, velocity of money, price level, and output. The following table contains information on the economy's output, money supply, the velocity of money, and price level. If the equilibrium quantity of airplanes demanded is 400, can this economy take full advantage, The table below shows how the average cost of production for airplanes at a certain factory changes as the number of airplanes built at that factory increases. 4. You may assume all households in the economy ate the same bundle/are the same. Since cell phone output did not chang money the change in the money supply was reflected in changes 2017 to 2018 was Suppose you have the following disposable income and consumption data for an economy, as shown in the table below. 9.5; 4.5; ____; ____; ____; Inflation-induced tax distortions If the wage rate is $4 and the price of capital is $6, then in order to minimize costs, the firm should use: a. more labor and less capital. Discuss with 2 diagrams: (The aid of aggregate output market diagram and money mar, Suppose the information in the following table is for a simple economy that produces only the following four goods: shoes, hamburger, shirts, and cotton. Assume that K is fixed at 10 in the short run. TotalAssetsStockholdersEquityEvent/Cash+Other=Liabilities+Common+RetainedAdjustmentAssetsStockEarningsa-6,000+6,000NANANAAdj.NA-4,500NANA-4,500. The following table contains information on the economy's money supply, velocity of money, price level, and output. People save 20% of their income, so their savings rate s = 0.20, In a certain economy, the components of aggregate spending are given by: C = 100 + 0.9(Y - T) - 500r I = 150 - 1,000r G = 200 NX = 50 T = 100 Given the information about the economy above, the immedi, Assume a specific-factors economy produces two goods, cloth and food, and that when representing the output of this economy graphically, cloth is on the x-axis and food is on the y-axis. Disposable personal income (DPI)equals $9710 billion. |Q| 0 |20 |60| 110 |170| 240| 290| 330| 355| 370| 380 |L |0| 1| 2| 3 |4 |5 |6| 7 |8 |9 |10 Suppose short run fixed costs are $200 and the wage, Suppose that a firm's production function is given by q = 20E^{0.50}. According to the CAGE framework, which of the following is an example of a product most affected by economic distance? A. diseconomies of scale; expanding B. economies of scale; contracting C. diseconomies of scale, Suppose a firm's production function is given by Q= L^1/2 * K^1/2.The marginal product of labor and the marginal product of capital is given by: MPL= K^1/2 /2L^1/2 and MPk= L^1/2/2K^ 1/2. In Home a worker can produce 3 apples or 5 bananas. If the equilibrium quantity of airplanes demanded is 100, can this economy take full advantage, Based on the Ricardo model, there is gain from trade because A. all things are produced by the most productive workers. copyright 2003-2023 Homework.Study.com. d. The adjustment to fair value on December 31, 2018, assuming that Eskew, Inc., elected to use the fair value option. Now consider the long-run impact of the change in money growth and inflation. Investment is equal to 400. For example, in 2010, the money supply was $320, the price of a cell phone was $8.00, and the economy produced 600 cell phones. However, when examining the operation of large health and medical facilities, the opposite is often t, Suppose you are hired to manage a small manufacturing facility that produces Widgets. L stands for number of workers. DPI = PI - Personal tax payments = 11210 - 1500 = 9710. If the wage is $50/day, find the marginal cost of production. For. Use the IS-LM-model to explain what happens to national income. All rights reserved. (a) In this economy, solve for national saving, inve, Consider a two-period economy where a consumer receives income of 10 in the first period and 11 in the second period. Numerically. Suppose that the economy consists of two types of firms: type A firms which produce output using a technology Qa Min 1 3K,L and type B firms which produce output using a technology Qb Min12K,L. Question: Consider a simple economy that produces only cell phones. Capital goods last an average of 50 years ( O, When economies of scale exist, firms with a large volume of production will have lower costs than firms with smaller volumes of production. The increase in real GDP per capita between 1890 and today understates well-being because the value of leisure is not included in GDP. \end{array} 2) If year 1 is the base year, the valu. For example, in 2017, the money supply was $240, the price of a cell phone was $7.20, and the economy produced soo cell phones Fill in the missing values in the following table, selecting the answers closest to the values you calculate. Year Pencils Muffins Price Quantity Price Quantity (Dollars per pencil) (Number of pencils) (Dollars per muffin) (Number of muffins) 2018 1 120 1 195 2019 2 130 4 195 2020 4 130 4 145 . Find a new equilibrium. On that date, the bond traded at a price of 99 (99% of par value) in the bond market. What is the opportunity cost of apples? 2009 Q x 2000 P = Value There is no government or foreign trade. The marginal propensity to consume for this economy is: a. As we read this unit, how does the circular flow model illustrate how our economy works? You'll get a detailed solution from a subject matter expert that helps you learn core concepts. What is the best. All of the above would push GNP above GDP. Corn Bread 137.50 $1.50 All other trademarks and copyrights are the property of their respective owners. Then, average total cost (ATC) is A) 25 cents per unit and average fixed cost (AFC) is 15 cents per unit. You are dealing with the concept of - comparative advantage. Looking at GDP data from the United States from 2001 to the present, what would be true of the relationship between nominal GDP and real GDP? The following table contains information on the economy's money supply, velocity of money, price level, and output. Product Market C = Ca + 0.7(Y - T) ; Ca = 1,000 - 10r ; T = 100 + 0.15Y ; Ip = 3,500 - 20r ; G = 3,000 NX = 2,000 - 0.4Y Money M. Quantecon is a country in which the theory of money operates. The soda, pizza and cheese companies employ labor and land to produce their products. The pizza company also buys $. \hspace{7pt}\text{Event/} \hspace{20pt} \text{Cash} \hspace{5pt}+ \hspace{10pt} \text{Other} \hspace{5pt} = \hspace{10pt} \text{Liabilities} \hspace{5pt} + \hspace{10pt}\text{Common} \hspace{5pt} + \hspace{5pt} \hspace{5pt} \text{Retained}\\ Real GDP falls if output falls. - equity. Suppose half the capital stock is suddenly destroyed(leaving the labor force unchanged). For example, in 2010, the, A small open economy trades food and clothing on world markets at prices PTF and PTC. | Year |Pens |Pens|Oranges |Oranges |. \\ Given this information, we know that a. saving per worker is less than depreciation per worker in period t. b. saving per worker, The table below contains information on Carrie's total utility TU and marginal utility MU from purchasing of pizza. What is the short-run production function? Show how to think about them using the IS curve: i.e. There are two goods, Coal and Wheat, produced with two factors of production, capital and labour. B. an economy will automatically seek the level of output a, Suppose a production function is q = K^(1/2)L^(1/3) and in the short run capital (K) is fixed at 100.
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