On payday, he immediately goes out and buys all the goods he will need over the next two weeks in order to prevent the money in his wallet from losing value. This tends to ______ saving, thereby ______ the quantity of investment in the economy and ______ the economy's long-run growth rate. |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}. B. fully employing all economic resources. The economy has two sectors-cloth and food. Suppose GDP in this country is $1,175 million. For this economy, A) Sh, Consider a small open economy whose relative prices are determined externally in the international market. For example, in 2019, the money supply was $360, the price of a pie was $9.00, and the economy produced 800 pies. There is no government or foreign trade. Instruction: E, The following table shows prices an quantities for two goods over three different time periods. What is the optimal labor demand in the short run? What is the marginal pro. Nominal GDP will be less than real GDP if the price level falls and is lower than the base year's prices. Show how to think about them using the IS curve: i.e. Is the purchase of a final good Suppose that a simple economy produces only the following four goods and services: shoes, hamburgers, shirts, and cotton. What is the per-worker production function? \hline \text { black, female } & 0 & 40 & 270 & & 330 \\ NI = NNP - Indirect Business taxes =11900 - 40 = 11860 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. Fill in the missing values in the following . a. The minimum cost, Consider a firm with short-run production function Q=K+L. You know that A) You are operating in a monopolistically competitive market, that is, you are a small part of a, Consider the following short run production function. Find the Marginal Product of Labor (MP_L). Become a Study.com member to unlock this answer! 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. Table: Inflation Rate (%); Real Interest Rate (%); Nominal Interest Rate (%); After-Tax Nominal Interest Rate (%); After-Tax Real Interest Rate (%) The following table contains information on the economy's money supply, velocity of money, price level, and output. Gross National Product (GNP) differs from U.S. Specifically, Related to Solved Problem Suppose the information in the following table is for a simple economy that produces only the following four goods: shoes, hamburgers, shirts, and cotton. 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. U.S. For example, in 2018, the money supply was $200, the price of a cell phone was $7.50, and the economy produced 400 cell phones. Question Velocity and the quantity equation Consider a simple economy that produces only cell phones. A) emplo, Suppose in the short run a firm's production function is given by Q = L^{1/2}K^{1/2}, and that K is fixed at K = 36. This firm operates in the short run where capital (K) is fixed at a quantity of 16. RaceandSex11415242564over64TOTALSwhite,male2103,36013,61022,050white,female805803,3804,930black,male104601,0601,670black,female040270330allothersTOTALS3104,65018,78029,760\begin{array}{|l|l|l|l|l|l|} Fill in the missing values in the. What is the marginal product of labor? 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. Consider a simple economy that produces only pies. B. Since pen output did not change from 2017 to 2018 and the velocity of money the change in the money supply was reflected v in changes in the price level. On that date, the bond traded at a price of 99 (99% of par value) in the bond market. For. Inflation refers to the increase in the price of the goods and services in an economy during a year. 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. 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. - equity. B. the economy is near full capacity. Each inhabitant can gather 25 coconuts in one day or bu, An economy produces three goods, soda, cheese, and pizzas, each by a separate firm. ?1.) Get access to this video and our entire Q&A library, What Is Inflation Rate? b) Suppose that velocity increases to 11 and economy's output of goods and services, Consider an economy describe by the following equations: Y = C + I + G + NX Y = 8,000 G = 2,500 T = 2,000 C = 500 + 2/3(Y - T) I = 900 - 50r NX = 1,500 - 250e r = r* = 8 a.In this economy, so. NNP = GNP - Depreciation = 13300-1400 = 11900 A) What is the marginal product of labor function? Capital and land are fixed factors while labor can move, Consider Australia as a small open economy. For example, in 2012, the money supply was $360, the price of a cell phone. 110x40 + 80x11 + 20x90, If nominal GDP is less than real GDP, then the price level must have fallen during the year Suppose the base year is 2001. Carrie's marginal utility per dollar from increasing cons. Consider an economy has the following information 1. Suppose the firm is operating in the short-run with K = 9. Suppose that Home has 100 workers, a marginal product of 4 making apples, and a marginal product of labor of 4 making shirts. Suppose there are two closed economies: Economy A and Economy B. Even if GDP included these types of production, why would it still be an imperfect measure of economic well-being? a. Household production and the underground economy. 4. \hline Consider an economy that begins with an output equal to its natural level. Personal income will c. Suppose that government expenditures fall by 500, The table below contains data for a hypothetical closed economy that uses the dollar as its currency. Determinants of aggregate suppDeterminants of aggregate supply The following graph shows a decrease in aggregate supply (AS) in a hypothetical economy where the currency is the dollar. 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. (a) Use the AD-AS and IS-LM models to show the effects of the shock on the AD, AS, IS, and LM curves. Is the value of intermediate goods and services produced during the year included in Gross Domestic Product (GDP)? Now consider the long-run impact of the change in money growth and inflation. 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. M=money supply, V=velocity, P=price level, Y=real output, k=1/V If in year, The determinants of aggregate supply: are consumption, investment, government, and net export spending. 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. Draw a graph of aggregate demand and aggregate supply to illustrate the current situation. The contract required a one-year commitment starting September 1. Velocity and the quantity equation Consider a simple economy that produces only pens. a) Illustrate and explain what happens to the Economy over time and in the long-run if it ex, Using the data below, find the next set of question: a. India is producing 100 clot, Consider an economy with the following data: C(Y-T) = 135 - 0.7(Y-T), I = 210-10r, G is the level of government purchases, T=120, Ms=900 and the price level is P, L(Y,r) = 0.8Y-16r and future expected inflation is zero. _______ per year. The following table contains information on the economy's output, money supply, the velocity of money, and price level. All rights reserved. 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. Suppose that a simple economy produces only the following four goods and services: shoes, hamburgers, shirts, and cotton. Consider a simple economy that produces only pies. 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 money supply, velocity of money, price level, and output. From this information, if income is $101, what is consumer spending? (Assume that the change in fair value results from a change in market interest rates rather than a change in instrument-specific credit risk.). The market price of a product is above the average cost of production. b) the size of its factories. In the long run, capital and labor are both varia, The "minimum efficient scale" of operation in an industry is defined as: A) the smallest plant size that can be operated by firms in the industry. Suppose the production function is q=L^{0.75}K^{0.25}. The following table contains information on the economy's money supply, velocity of money, price level, and output. If the wage is $50/day, find the marginal cost of production. What will happen to the values of national income, personal income, and disposable personal income? They have a total of 2000 crates of oranges. Today, the typical American works fewer than 40 hours per week. Find the marginal product of labor (MPL). Suppose that John, April, and Tristan have two production plants for producing orange juice. Use a solow diagram to explain how the economy behaves ov. The production function is: f(K,L) = K^1/3 L^1/3. The country has a constant technology, population and capital stock (in other words, real GDP is constant throughout). 2000 (Base Year) 2009 Fill in the missing values in the folowing table, Consider a simple economy that produces only cell phones. 2009 Q x 2000 P = Value 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. Draw the short run Phillips curve and relate it to our economy today. If the price of Labor, w = $12 per unit of Labor, what is the firm's marginal cost of production when the firm is producing 48 units of ou, Consider an economy where the aggregate production function is y^1/2 = k^1/2 . Indirect Business Taxes 40 Make sure to label both axis and include a dot on the curve that represents our state of economy. B. more labor and less capita, Suppose a firm's production function is given by the equation Q = 12L^.5K^.5 . RaceandSexwhite,malewhite,femaleblack,maleblack,femaleallothersTOTALS1142108010031015243,360580460404,650256413,6103,3801,06027018,780over64TOTALS22,0504,9301,67033029,760. 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 . Consider a simple economy that produces two goods: pencils and muffins. Question: Consider a simple economy that produces only cell phones. 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. Find a new equilibrium. 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. (Enter your response as an integer.) In this economy, the level of income at which the consumer breaks even (cons. In the United States, the difference between GNP and GDP is _________ that of many other countries. Incorrect: The largest component of gross domestic income is wages, which are about three times as large as profit. Com, Consider the Small Open Economy Model. a. You have 3 workers: worker A, B, and C. Worker A can produce 4 tables or 8 chairs in one day. Assuming that the bonds were sold at 100 plus accrued interest on October 1, 2018, prepare the necessary journal entry. 2.0; 4.5; ____; ____; ____; Suppose you are deciding whether to spend your tax rebate check on AirPods or save the money for a new smart phone. "Whenever real GDP declines, nominal GDP must also decline." This means that if we reduce labor by one in oranges, we need one more unit of land, Suppose the production function is y = 2K^{0.5}L^{0.5} and in the short-run K is fixed at K = 16. Question: Consider a simple economy that produces only pens. Velocity and the quantity equation Consider a simple economy that produces only cell phones. Foreign has 100 workers, a marginal product of labor of 8 making apples a, Assume the marginal rate of substitution between land and labor is 2 in producing apples and 1 in producing oranges. The inflation rate from 2011 to 2012 was __________ (5%/2.44%/1.44%/105). a. output and prices. Consider a simple economy that produces only cell phones. Suppose you have the following disposable income and consumption data for an economy, as shown in the table below. explain the three dis, Suppose the following situation exists for an economy: Kt+1/N < Kt/N. You will pay $10,000 for labor costs and $12,000 for capital costs. GDP = (50,000,000 * 1) + (10 * 10,000,000) = $150,000,000. Use the information in the following table to calculate Nominal Gross Domestic Product (Nominal GDP) for 2015. c. decide how much government regulation there should be. The inflation rate from 2017 to 2018 was. The following table contains information on the economy's money supply, velocity of money, price level, and output. remain the same Further, assume that all of the cotton is used in the production of shirts. The following table contains information on the economy's money supply, velocity of money, price level, and output. Money \ supply \ grew \ = \ 0.05 \ or \ 5\% Select all that apply. Transfer Payments 600 nominal GDP is larger than real GDP in years after the base year. Show the math work a.) 4. Average living standards can be expected to be lower in a barter economy than in a, Consider a decrease in the supply of money that causes output to fall short of full employment as shown in the diagram to the right. The money supply is $3 trillion, the price level equals 2, the real GDP is $6 trillion in base-year dollars. Which of the following is NOT a shortcoming of GDP as a measure of well-being? Show more Business Economics Answer & Explanation Solved by verified expert The following table contains information on the economy's money supply, velocity of money, price level, and output. What do you suppose determines the sh, Suppose we have a two good economy that produces beef and soy. Explain briefly why an economy that c. The table below provides information about an open economy with the public sector. {eq}Inflation \ rate \ from \ 2011 \ - \ 2012 \ = \ \dfrac{7.56 \ - \ 7.20}{7.2} \ \times \ 100 Learn the definition of gross domestic product (GDP) and review types and examples. The following table contains information on the economy's money supply, velocity of money, price level, and output. With no changein aggregate demand, how does the economy return to full employment? For example, in 2017, the money supply was $360, the price of a pie was $9.00, and the economy produced 800 pies. Assume that this economy produces only two goods X and Y. The following table contains information on the economy's money supply, velocity of money, price level, and output. Suppose an economy producers three goods: Apples, oranges, and bananas. What is the cost of one more beer? Production and Prices in Year 1 (Base year) C. the relationship between the, Consider an economy described by the following equations: Y=C+I+G+NX; Y=5000; G=1000; T=1000; C=250+0.75*(Y-T); I= 1000-50r; NX= 500-500*e; r=r*=5. 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. Suppose an economy that is initially at full employment faces a substantial increase in factor cost of production. Assume that there are two sectors, manufacturing and farming. 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. Real GDP = 137.5 x 1 + 1350 x 30 = 40637.5, Billions of dollars D. all of the above, Consider the following short run production function. The equilibrium condition is Y = C+ I 2. Disposable personal income (DPI)equals $9710 billion. Wine 90 11 80 10 Fill in the missing values in the following table. The marginal propensity to, Consider the following simple economy that produces only three goods: Real GDP in 2009 equals 000 Base Year 2009 Product Quantity Price Quantity Price Denim pants 80 $40 100 $50 Wine 90 11 80 10 Textb. a. 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. B. \\ \\ decrease Select one: a. Decr. He is paid in cash twice per month. If Americans still worked 60-hour weeks, as they did in 1890. 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. See answer Advertisement topeadeniran2 C. maximizing the returns to factors of production. Gilberto receives a portion of his income from his holdings of interest-bearing U.S. government bonds. - opportunity costs. Live Happley's production schedule for strawberries is given in t, Assume an industry uses labor and capital in its production process. \hline \text { all others } & & & & & \\ Then, average total cost (ATC) is A) 25 cents per unit and average fixed cost (AFC) is 15 cents per unit. What is the best. If both output and prices are falling, then both real GDP and nominal GDP will fall. b. In 2016, the economy produced 85 f, Consider a firm with the production function, q=(K^1/2+L^1/2)^2. The company's production f. Suppose the production function for a firm is given by q = 5L0.5K0.25. a. not change GDP or the category under which the spending is counted. GDP only counts final goods and services and not intermediate goods. \hline \text { white, male } & 210 & 3,360 & 13,610 & & 22,050 \\ \\ Fill in the missing values in the The following table shows the relationship between output and number of workers in the short run. "Corporate profits are much too high: Most corporations make profits equal to 50 percent of the price of the products they sell.". The purchase of tires from Bridgestone tire company by an automobile manufacturer. The value of the multiplier for this economy is 4. If year 1 is the base year, the value for this econ, Suppose the economy produces only 2 goods: consumer goods and capital goods(K). Derive an equation for the (short run) average product of labor and for the short run marginal product of labor. These sweaters are made using a combination of labor and knitting machines. Velocity and the quantity equation Consider a simple economy that produces only pens. 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. The government places a modest minimum wage on this industry above the market clearing equilibrium wage. With the steel she produced 10 authentic sculptures that she sold for $1,000 each to a local art dealer. The total value added of the artist is $3000. Consider a simple economy with two countries, the United States and India. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Agree. \\ Fill in the missing values. Assume the following equations summarize the structure of an economy. b. spending and income. The unanticipated change in inflation arbitrarily benefits _______. B) $4 per unit, and average fixed cost (AFC) is, A firm has the production function q = 0.2LK + 5L^2K - 0.1L^3K. copyright 2003-2023 Homework.Study.com. b) Suppose five of the planes produced were now sold overseas rather than domestically. d. spending and output. Graph the short-run marginal and average product curves Graph the short-run total co, If an increase in production lowers your firm's short-run average total cost, your firm is likely experiencing blank and should consider blank output levels. a. Assume that the wage rate is $20. Will a hike in the gas tax, Refer to the budget line shown in the diagram. b. Numerically. 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? Define the term information technology. There are two goods, Coal and Wheat, produced with two factors of production, capital and labour. Which items involve a microeconomic issue and which involve a macroeconomic issue? Identifying costs of inflation Draw a production possibility curve (PPC). Calculate the amount for consumption. \\ The soda, pizza and cheese companies employ labor and land to produce their products. The market wage rate w=1 and price of capital r=4. National income will {/eq}. For example, in 2014, the money supply was $240, the price of a pen was $7.20, and the economy produced 500 pens. 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. Disagree. As we read this unit, how does the circular flow model illustrate how our economy works? Inflation \ rate \ from \ 2011 \ - \ 2012 \ = \ 5\% A. The government cuts public spending. The transaction costs of exchanges are lower in a barter economy than in a money economy. magnum research bfr 500 for sale,