Coal production is relatively more capital-intensive and W, The firm's demand for a resource and marginal revenue product. There are two goods, Coal and Wheat, produced with two factors of production, capital and labour. b. Use a production possibilities frontier to illustrate society's trade-off between two "goods" a clean environment and the quantity of industrial output. b. Production and Prices in Year 2 Product Quantity Price Quantity Price Note that consumption does n, Consider a Solow growth model with no population growth. Consider a simple economy that produces only cell phones. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Refer to the table. For example, in 2017, the mon. Gross Domestic Product (GDP) in which of the following ways? National income will Since cell phone output did not chang money the change in the money supply was reflected in changes 2017 to 2018 was Currently, each factory is producing 1,000 boxes of taffy at the same total cost. How many workers to hire, b. Fill in the missing values in the folowing table, Consider a simple economy that produces only cell phones. {eq}Inflation \ rate \ from \ 2011 \ - \ 2012 \ = \ \dfrac{7.56 \ - \ 7.20}{7.2} \ \times \ 100 According to the CAGE framework, which of the following is an example of a product most affected by economic distance? 9.5; 4.5; ____; ____; ____; Inflation-induced tax distortions For example, in 2010, the money supply was $200, the price of a cell phone was $7.50, and the economy produced 400 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. For example, in 2011, the money supply was $280, the price of a cell phone was $7.00, and the economy produced 600 cell phones. M=money supply, V=velocity, P=price level, Y=real output, k=1/V Which of t, Consider an economy described by the production function: Y = F(K,L) = K^0.4 L^0.6 a. Suppose the production function is q=L^{0.75}K^{0.25}. A. If the GDP deflator in 2012 has a value of 98.0, then. Use the national income accounting identities to calculate, __________ (66.00/3,780.00/69.00/3600.00). a. Household production and the underground economy. If the equilibrium quantity of airplanes demanded is 200, 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. Assuming no population growth or technological progress, find the steady-state capital stock per worker, output per worke, Consider a Solow economy that begins in steady state. Consider a simple economy that produces only pies. b. Draw the short run Phillips curve and relate it to our economy today. Question Velocity and the quantity equation Consider a simple economy that produces only cell phones. nominal GDP is larger than real GDP in years after the base year. The following table contains information on the economy's money supply, velocity of money, price level, and output. Finally, suppose consumer goods are subject to legal price con, An economy is described by the following equations : C=40+0.8(Y-T) I^p=70 G=120 NX=10 T=150 a) Find the short-run equilibrium GDP for this Economy b) Suppose the potential output for this Economy is $, Consider the information below for a simple economy. \\ If you were attempting to forecast the level of consumer spending by households, which measure of total production or total income might be most helpful in making your forecast? In the short run, K is fixed at K=10. In this economy, the equilibrium level of real GDP is: A market system (market economy) depends on the market to: a. find the most efficient way of using resources. B) the scale of operation at which economies of scale are exhausted. \hline \text { TOTALS } & 310 & 4,650 & 18,780 & & 29,760 \\ \\ Show the effect this will have on national income, unemployment, inflation, and interest rates with the help of an ADAS diagram, assumi, An economy has a recessionary gap. They have a total of 850 crates of oranges. The following table shows the prices and quantities of the goods over a three-year period. Under a perpetual inventory system, acquisition of merchandise for resale is debited to: The event requires a year-end adjusting entry. The following table contains information on the economy's money supply, velocity of money, price level, and output. A) What is the value of beef produced in our econom, Consider a firm with short-run production function Q = K + L. Right now, the firm has 10 units of K, w = 3, and r = 10. Question: 5. Find the Marginal Product of Labor (MP_L). Make sure to label both axis and include a dot on the curve that represents our state of economy. Then the profit-maxi, A firm's production function is given by q = f(L, K) = LK + 2L^2 K - L^3. 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? ), An economy produces two goods, A and B; has two factors of production, K and L, and production of good A is capital-intensive, and the production of good B is labor-intensive. The inflation rate from (Enter your response as an integer.) For example, in 2017, the money supply was $200, the price of a pen was $5.00, and the economy produced 400 pens. Consider a simple economy that produces only cell phones. What do you suppose determines the sh, Suppose we have a two good economy that produces beef and soy. GDP only counts final goods and services and not intermediate goods. What he can't spend, he converts into a more stable foreign currency for a steep fee. If the wage rate is $15 and the firm has sunk costs of $1000 what is the firm's total cost fu, You estimate a short-run production function to be Q = 16L^{0.8} which gives a Marginal Product of Labor function MPL = 0.8*16L^{-0.2} = 12.8/L^{0.2}. Fill in the missing values in the follow selecting the answers closest to the values you calculate. 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. The market price of a product is above the average cost of production. Velocity \ of \ money \ (2011) \ = \ \dfrac{3,600}{240} Labor is employe, Assume a desert island economy in which labor is the only scarce resource and labor can be used to gather food (coconuts) or to build huts. 1. 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. The money supply is $3 trillion, the price level equals 2, the real GDP is $6 trillion in base-year dollars. The following table contains information on the economy's money supply, velocity of money, price level, and output. Received an $18,000 cash advance for a contract to provide services in the future. The labor costs $6 and pizza sells for $10. 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. (1) Describe the diff, The diagram below shows the aggregate labor market and aggregate production function for the country of Bonavista. Consider a simple economy that produces only cell phones. The increase in real GDP per capita between 1890 and today understates well-being because the value of leisure is not included in GDP. Select all that apply. 110x40 + 80x11 + 20x90, If nominal GDP is less than real GDP, then the price level must have fallen during the year Eskew, Inc., which closes its books on December 31, is authorized to issue $500,000 of 9%, 15-year bonds dated May 1, 2018, with interest payments on November 1 and May 1. 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? Get access to this video and our entire Q&A library, What Is Inflation Rate? Com, Consider the Small Open Economy Model. Discourage Labor can be used to produce only two commodities - X a necessity good (food), and Y, a luxury good (music and merriment) Su, Consider Live Happley Fields, a small player in the strawberry business whose production has no individual effect on wages and prices. Suppose an economy producers three goods: Apples, oranges, and bananas. Then, average total cost (ATC) is A) 25 cents per unit and average fixed cost (AFC) is 15 cents per unit. (a) Graph the short-run total product curve. Now suppose the Fed unexpectedly increases the growth rate of the money supply, causing the inflation rate to rise unexpectedly from 4% to 6% per year. Assume that the economy is initially at point Y in the graph. B. fully employing all economic resources. Right now, the firm has 10 units of K, w = 3, and r = 10. When the pric, Suppose an economy is characterized by the Solow model. b. spending and income. \hline \text { black, female } & 0 & 40 & 270 & & 330 \\ b) the size of its factories. The following table contains information on the economy's money supply, velocity of money, price level, and output. Consider a simple economy that produces two goods: pencils and muffins. Production Combin, Consider the following information describing an economy with demand-determined output. In 2011, the value of the GDP deflator is, Based on the table, in Year 2, the value of the GDP deflator is 1960/1680 x 100 =, A simple economy produces two goods, Corn Bread andVideo Games. From the following data, construct an expenditure schedule on a piece of graph paper. Derive the current-year-quantity price index. The following table contains information on the economy's money supply, velocity of money, price level, and output. The size of its factories, c. Which short-run average-total-cost curve to use, d. All of the above are correct, Suppose in the short run, a firm is able to adjust the amount of labor (L) while the amount of capital (K*) is fixed. Fill in the missing values in the following . These sweaters are made using a combination of labor and knitting machines. Pineapples 50,000,000 lbs. Figures are in billions of dollars. Take the following information as given for a small, imaginary economy: -When income is $10,000, consumption spending is $6,500. As an economist for the United Nations, you have been asked to report on the role of cottage industries in Pakistan. The following table shows two scenarios: a low-inflation scenario and a high-inflation scenario. Investment is equal to 400. Video Games 900 $30.00 Consider a simple economy that produces only pens. Textbooks 15 90 20 100, Real GDP in 2009 equals $6680. Suppose that John, April, and Tristan have two production plants for producing orange juice. . The following table contains information on the economy's money supply, velocity of money,. For example, in 2017, the money supply was $200, the price of a pen was $5.00, and the economy produced 400 pens. A slice of pizza costs $3. The consumer can borrow or save at the interest rate 10%. Points: 1 / 1 Close Explanation 4. b) Find the steady-state capital stock per worker, and con, Consider the following aggregate expenditure model of an economy: C = 50 + (8/9)Yd T = (1/4)Y I = 100 G = 150 X = 100 IM = (1/3)Y where C is consumption, Yd is disposable income, T is taxes, Y, i) Suppose the following information is given about an economy that is described by the Solow model with technological progress and with population growth: \delta = 0.11 g_A=0.02 g_N=0.03 Then the ste. All other trademarks and copyrights are the property of their respective owners. Round to 2 decimal places. Given the real interest rate of 4.5% per year, find the nominal interest rate on Gilberto's bonds, the after-tax nominal interest rate, and the after-tax real interest rate under each inflation scenario. 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. Consider a simple economy that produces only cell phones. c. costs and revenue. Suppose also that we produce 125 units of beef and 460 units of soy. Numerically. Find short-run equilibrium output. Suppose there is a single consumption good, x, and the consumer's utility fu, Which of the following are true of a barter economy? Velocity \ of \ money \ (2011) \ = \ 15 Wine 90 11 80 10 Further, assume that all of the cotton is used in the production of shirts. Would the difference between the real GDP per capita in 1890 and the real GDP per capita today understate or overstate the difference in the population's economic well-being? Show calculations. Further, assume that all of the cotton is used in the production of shirts. B. how firms respond to changes in interest rates. The value of leisure is not included in GDP. Also suppose the economy is operating at full employment. Suppose the base year is 2001. Suppose that the present equilibrium price level and level of real GDP are 100 and $215 and that data set A represents the relevant aggregate supply schedule, Refer to the information provided in the table below to answer the question that follow : Assume that this economy produces only two goods X and Y. The price of output is 'p,' the, Suppose a firm's short-run production function is given by Q = F(L) = 10L. Suppose the firm is operating in the short-run with K = 9. Below is a Production Possibilities Table of Consumer Goods (things that consumers buy to satisfy wants) and Capital Goods (things that businesses buy to make them more productive). For example, in 2012, the money supply was $360, the price of a cell phone was $4.50, and the economy produced 800 cell phones. a. The marginal product of oranges in plant 1 is MP1 = 1,000 - 01 and in-plant 2 is MP2 = 1,200 - 202. Do not include "all others" for parts fff and ggg. Use a production possibilities frontier to illustrate society's trade-off between two "goods" a clean environment and the quantity of industrial output. Although short-term interest rates have historically averaged less than long-term rates, the heavy use of short-term debt is considered to be an aggressive strategy because of the inherent risks associated with using short-term financing. Is it true that in a short-run production process, the marginal cost curve eventually slopes upward because firms have to pay workers a higher wage rate as they produce more output? Derive the base-year-quantity price index. Draw graphs to support your answer. Assume that this economy is currently at point "C". When GDP is computed using the base year prices, it is referred to as real GDP. Which of the following will describe the marginal product of labor (MP_L) for this production function? For example, in 2016, the money supply was $360, the price of a cell phone was $9.00, and the economy produced 800 cell phones. Personal income (PI) equals $11210 billion. {/eq}, GDP (2012) = Money supply * Velocity of money, {eq}Price \ of \ cell \ phones \ (2012) \ = \ \dfrac{GDP}{Cell \ phones} \\ Find a new equilibrium. Further, assume th, Suppose that the table below shows an economy's relationship between real output and the inputs needed to produce that output: Input Quantity Real GDP 300.00 $400 225.00 300 150.00 200 a. It can produce two goods, apples and bananas. Production and Prices in Year 1 (Base year) In the best case scenario, the Fed will: a Increase money supply to take the economy to point X. b Decrease money sup, Consider the following competitive economy: Capital Stock: K=150 Labor Supply: L=150 Production Function: Y = K .4 L .6 Consumption Function: C = 10 + 0.7 Y d Investment Function: I = 40 - 100r Government spending: G=30 Taxes: T=30 For this produ, The table below pertains to Wrexington, an economy in which the typical consumer's basket consists of 20 pounds of meat and 10 toys. Since cell phone output the change in the money supply was reflected money + 2017 to 2018 was. In 2015, the economy produced 70 flashlights and 40 fishing lures, and the prices of flashlights and fishing lures were $5 and $12, respectively. Since cell phone output did not change from 2011 to 2012 and the velocity of money __________ (increased/decreased/remained the same) , the change in the money supply was reflected __________ (partially/entirely) in changes in the price level. The following table contains information on the economy's money supply, velocity of money, price level, and output. - Definition & Formula. 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. Suppose a production function is q = K^(1/2)L^(1/3) and in the short run capital (K) is fixed at 100. If the consumer s money income is 20, the a) consumer can obtain a combination of 5 units of both C and D, b) price of C is 4 and the price of D is 2, c) price of C is 2 and the price of D is 4, d) pri, Assume a technological advance leads to lower production costs. The first event is recorded as an example. Incorrect: The largest component of gross domestic income is wages, which are about three times as large as profit. \\ The efficiency of ma3. Explain briefly why an economy that c. The table below provides information about an open economy with the public sector. E. If a company follows a policy of matching maturities, this means that it matches its use of short-term debt with its use of long-term debt. 1) If year 2 is the base year, the value for this economy's real GDP in year 3 is? Suppose the economy experiences a negative shock to the banking system. Draw the short run Phillips curve and relate it to our economy today. (less than), Consider the following simple economy that produces only three goods: Draw a production possibility curve (PPC). The following table contains information on the economy's money supply, velocity of money, price level, and output. Consider a simple economy that produces only pies. Use the key terms to complete the following sentence: A(n) ____________ is a check issued by a bank against its own funds. Createyouraccount. All of the above would push GNP above GDP. The short-run average variable cost is a. und, The production possibilities curve illustrates the basic principle that: a. the production of more of any one good will, in time, require smaller and smaller sacrifices of other goods. DPI = PI - Personal tax payments = 11210 - 1500 = 9710. Assume Government expenditure has increased by 10. We reviewed their content and use your feedback to keep the quality high. b. The total amount of money received in an economy by it, Use examples to distinguish between the resource market and the product market in the circular flow model. Assume Government cut income taxes by 10. Consider a simple economy that produces only cell phones. What is t, Both Kate and John own saltwater taffy factories. Suppose GDP in this country is $1,175 million. If the wage is $10 and the rental rate on capital is $20, the short run marginal cost is _____. (b) Graph the short-run marginal and average product curves. What is the short-run production function? Quantity of Money Price Level Quantity of Output Nominal GDP (Dollars) Velocity of Money (Dollars) (Cell phones) (Dollars) 2017 240 7.20 500 2018 252 500 Year 15 The money supply grew at a rate of fram 2017 to 2018. For example, in 2017, the money supply was $360, the price of a cell phone was $4.50, and the economy produced 800 cell phones. Disposable personal income will Assume an economy where the production function is F(K,L) = L2/3K1/3 if L is 125 and K is 1000. Year CPI 2010 98 2011 100 2012 106 2013 107 a. B. the economy is near full capacity. Suppose that in this economy, there is a pla, The market supply of labor is A) The sum of all jobs created in the economy B) Different for each individual based on training and education levels C) The total of all goods produced in the economy, Assume the economy can be described by the following set of equations: C/\bar{Y} = 0.4 +0.8\bar{Y}\\ I/\bar{Y} =0.3-2(R-\bar{r})\\, All of the following will cause a shift in the supply of smartphones EXCEPT A. an increase in the cost of producing smartphones. Disagree. Suppose that a simple economy produces only the following four goods and services: shoes, hamburgers, shirts, and cotton. Consider an economy that begins with an output equal to its natural level. remain the same C. maximizing the returns to factors of production. a, The production possibilities curve illustrates the basic principle which states that: A. the production of more of any one good will in time require smaller and smaller sacrifices of other goods. The following table contains information on the economy's money supply, velocity of money, price level, and output. Suppose you have the following disposable income and consumption data for an economy, as shown in the table below. You are dealing with the concept of - comparative advantage. Consider a simple economy that produces only cell phones. Indirect Business Taxes 40 . If the wage is $50/day, find the marginal cost of production. 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. Aggregate supply describes a relationship between? Fixed cost is FC = 500 (sunk cost). Consider a simple economy with two countries, the United States and India. Question: Consider a simple economy that produces only cell phones. If firms in this industry. RaceandSexwhite,malewhite,femaleblack,maleblack,femaleallothersTOTALS1142108010031015243,360580460404,650256413,6103,3801,06027018,780over64TOTALS22,0504,9301,67033029,760. What is the opportunity cost of apples? (Enter your response as an integer.) Derive the short run, Economic theory suggests that as plant size increases, the average cost of production should fall. What are consumer goods? The inflation rate from 2017 to 2018 was. Numerically. C. all things are produced at the lowest cost. The labor supply, Think about the short-run production of a small firm that makes sweaters. Use the information in the following table to calculate Nominal Gross Domestic Product (Nominal GDP) for 2015. How do you know? Yes. The economy experienced economic growth over time. Find the equilibrium real interest rate. Velocity and the quantity equation Consider a simple economy that produces only pens. Real GDP falls if output falls. If the marginal product of capital is 50 and the marginal product of labour is 50, then in the long run the firm should in order to minimize its costs of producing its output. The following table contains information on the economy's money supply, velocity of money, price level, and output. 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. As we read this unit, how does the circular flow model illustrate how our economy works? Find the marginal product of labor (MPL). If the wage is $10 and the rental rate on capital is $20, the short-run average cost is _____, Consider the following firm with the production functionQ = F(L) = 2L^\frac12 L = labor, Wage w=12. Real GDP = 137.5 x 1 + 1350 x 30 = 40637.5, Billions of dollars Nineteen percent of employers provide a one-day paid holiday with workers off Thanksgiving Day. The following table contains information on the economy's money supply, velocity of money, price level, and output. Consider two products, cloth and machines. Suppose half the capital stock is suddenly destroyed(leaving the labor force unchanged). A) What is the marginal product of labor function? A) financial services B) electricity C) mobile phones D) mass transportation, 3. Which of the following is NOT a shortcoming of GDP as a measure of well-being? Assume that K is fixed at 10 in the short run. Derive an equation for the (short run) average product of labor and for the short run marginal product of labor. The level of prices and the value of money, Money supply, money demand, and adjustment to monetary equilibrium, The classical dichotomy and the neutrality of money, Using money creation to pay for government spending, The Fisher effect and the cost of unexpected inflation.

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