Assume there are no traveler's checks. The soda, pizza and cheese companies employ labor and land to produce their products. The firm pays a wage of $30 per units and pays a rental rate of capital $10 per unit. 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. For example, in 2016, the money supply was $400, the price of a cell phone was $5.00, and the economy produced 800 cell phones. Paul s Pizza Parlor bakes pizza pies according to the following production function: Q = 3L + 0.3L^2 - 5L^3. Velocity \ of \ money \ (2011) \ = \ 15 The total value added of the artist is $3000. 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. Ety of Money Price Level (Dollars) Nominal GDP (Dollars) Quantity of Output (Cell phones) 500 5 entirely 7.20 15 from 2017 to 2018. 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? 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. For example, in 2011, the money s, Suppose Home has 300 units of labor. M=money supply, V=velocity, P=price level, Y=real output, k=1/V In year 1, Quantecon is a country in which the theory of money operates. c. decide how much government regulation there should be. 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. a) The GDP of this country would be $ million. 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. If the product made by the labor sells at a price of P=$8 per unit, then the Marginal Revenue Product of, If the economy is producing a combination of goods inside its production possibilities frontier, then a. workers are on vacation b. a significant number of workers have little education c. some resources are being wasted d. technology must improve before, Suppose the marginal product of labor is 12 and the marginal product of capital is 24. You will need to give up your current job that pays you $20,000. How. B. more labor and less capita, Suppose a firm's production function is given by the equation Q = 12L^.5K^.5 . Wine 90 11 80 10 Suppose an economy producers three goods: Apples, oranges, and bananas. Under a perpetual inventory system, acquisition of merchandise for resale is debited to: The event requires a year-end adjusting entry. Money \ supply \ grew \ = \ 0.05 \ or \ 5\% Experts are tested by Chegg as specialists in their subject area. There are three productive factors. 110x40 + 80x11 + 20x90, If nominal GDP is less than real GDP, then the price level must have fallen during the year The consumer can borrow or save at the interest rate 10%. From the following data, construct an expenditure schedule on a piece of graph paper. Year Quantity of money Velocity of money Price level Quantity of output Nominal GDP (Dollars) (Dollars) (Cell phones (Dollars) 2017 240 15 7.20 500 3,600 , Consider a simple economy that produces only cell phones. b. spending and income. All of the above would push GNP above GDP. Personal income (PI) equals $11210 billion. L stands for number of workers. \text{Adjustment} \hspace{54pt} \text{Assets} \hspace{105pt} \text{Stock} \hspace{36pt} \text{Earnings}\\ b) the size of its factories. Household production and the underground economy. B) $4 per unit, and average fixed cost (AFC) is, A firm has the production function q = 0.2LK + 5L^2K - 0.1L^3K. 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. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Corn Bread 137.50 $1.50 Gilberto receives a portion of his income from his holdings of interest-bearing U.S. government bonds. \hline \text { all others } & & & & & \\ Inflation \ rate \ from \ 2011 \ - \ 2012 \ = \ \dfrac{0.36}{7.2} \ \times \ 100 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? 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. a. We are interested in possible relationships between age, race, and sex. Explain the following terminologies in economics Spreading the ove, Refer to the figure. 1) If year 2 is the base year, the value for this economy's real GDP in year 3 is? Fill in the missing values in the Question: 5. The government taxes nominal interest income at a rate of 10%. 4. C. attempts to increase the output of the economy wil, If an economy is being "productively efficient," then that means the economy is A. producing the products most wanted by society. The price of output is 'p,' the, Suppose a firm's short-run production function is given by Q = F(L) = 10L. 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. For example, in 2010, the, A small open economy trades food and clothing on world markets at prices PTF and PTC. The following table contains information on the economy's money supply, velocity of money, price level, and output. In the short run, the firm has 16 units of capital. On that date, the bond traded at a price of 99 (99% of par value) in the bond market. Assume that this economy produces only two goods X and Y. Use the e. Consider a simple economy that produces only pies. Suppose that a simple society has an economy with only one resource, labor. \hline \text { black, male } & 10 & 460 & 1,060 & & 1,670 \\ B. in the short run, the firm cannot add workers. Discourage Select all that apply. The following table contains information on the economy's money supply, velocity of money, price level, and output. Agree. |Year|Price of Meat|Price of a Toy |2004|$3 per pound|$2 |2005|$1 per pound|$7 |2006|$4 per pound|$5 Refer to table. Personal Tax Payments 1,500, National income (NI) equals $11860 billion. (a) Use the AD-AS and IS-LM models to show the effects of the shock on the AD, AS, IS, and LM curves. C. a decrea. 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}. The production function is: f(K,L) = K^1/3 L^1/3. Learn about the inflation rate. Right now, the firm has 10 units of K, w = 3, and r = 10. Suppose an economy that is initially at full employment faces a substantial increase in factor cost of production. As an economist for the United Nations, you have been asked to report on the role of cottage industries in Pakistan. For example, in 2019, the money supply was $240, the price of a cell phone was $7.20, and the economy produced 500 cell phones. 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. A) What is the marginal product of labor function? Which of the following is NOT a shortcoming of GDP as a measure of well-being? Textbooks 15 90 20 100, Real GDP in 2009 equals $6680. 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. 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. From this information, if income is $101, what is consumer spending? If the wage rate is $5 and the price of capital is $2, then in order to minimize costs the firm should use: A. more capital and less labor. The money supply grew at a rate of from 2014 to 2015. List 3 factors that can change the economy's potential output. Wages=3, Rental rates=6, Price of product = $10 a) In the short run, capital is fixed at 5. 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. . Year Velocity of Money (Cell phones) (D 1.44% (Dollars) 7.20 500 2017 2.44% 2018 15 500 5% The money supply 105% rate of from 2017 to 2018. 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. c. In the absence, Suppose a firm with a production function given by Q=4K^0.25L^0.75 produces 100 units of output. \\ 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. How do you know? B. The transaction costs of exchanges are lower in a barter economy than in a money economy. 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. \\ a. Today, the typical American works fewer than 40 hours per week. The following table contains information on the economy's money supply, velocity of money, price level, and output. This is an example of the ___________ of inflation. The equilibrium condition is Y = C+ I 2. Consider a simple economy that produces only cell phones. All rights reserved. Disagree. The following table contains information on the economy's money supply, velocity of money, price level, and output. a. Become a Study.com member to unlock this answer! Nineteen percent of employers provide a one-day paid holiday with workers off Thanksgiving Day. Now consider the long-run impact of the change in money growth and inflation. 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. The art dealer then sold all of the sculptures to art collectors for an average of $1,200 each. Investment is equal to 400. The increase in real GDP per capita between 1890 and today understates well-being because the value of leisure is not included in GDP. Figures are in billions of dollars. A) an inefficiently small amount B) an efficient amount C) an inefficiently large amount D) none, Suppose you are the owner of a small factory which produces tables and chairs. In the U.S., gross domestic product (GDP ) and gross national product (GNP) are close in value. How do they affect the environment and economy? Consider the following simple model of an economy: C = 1,000 + .85(Yd) I = 780 - 800r G = 1,000 T = -50 + 0.09(Y) IM = 100 + 0.1(Y) EX = 100 + 0.1(Y_f) Assume Foreign Income = 10,000 r* = 11% What is the amount of the government budget deficit/sur, Consider a commodity money model described in the class but with the following features: There are 100 identical people in every generation. (a) Graph the short-run total product curve. remain the same a. uses the least costly amount of resources available b. has a small number of people who do not work c. resources are used to make the most goods and services possible d. none of the above, Assume that an economy's production function is Y = 1000L^1/2, so that when the marginal product of capital is equated to the real wage the labor demand curve is L = 250, 000 (P/W)^2. The money supply is $3 trillion, the price level equals 2, the real GDP is $6 trillion in base-year dollars. 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). The labor supply, Think about the short-run production of a small firm that makes sweaters. Table: Inflation Rate (%); Real Interest Rate (%); Nominal Interest Rate (%); After-Tax Nominal Interest Rate (%); After-Tax Real Interest Rate (%) Suppose the real domestic output in an economy is 20 units, the quantity of inputs is 4, and the price of each input is $4. The following table contains information on the economy's money supply, velocity of money, price level, and output. | Year |Pens |Pens|Oranges |Oranges |. An artist buys scrap metal from a local steel mill as a raw material for her sculptures. C) the smallest number of firms that co, Suppose the production function for a firm is given by: q=4L^{0.5}K^{0.25}. B. the economy is near full capacity. Suppose you have the following disposable income and consumption data for an economy, as shown in the table below. Alexander Holmes, Barbara Illowsky, Susan Dean, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman. Since cell phone output the change in the money supply was reflected money + 2017 to 2018 was. Select one: a. Decr. Experts are tested by Chegg as specialists in their subject area. Assume that K is fixed at 10 in the short run. The efficiency of ma3. Also suppose the economy is operating at full employment. Consider a simple economy that produces only cell phones. Our experts can answer your tough homework and study questions. Denim Value+Wine Value + Textbook Value= RGDP John's factory has high fixed costs and low variable costs. A. Discover the causes of inflation and how to calculate it. A slice of pizza costs $3. selecting the answers closest to the values you calculate. Velocity and the quantity equation Consider a simple economy that produces only cell phones. The value of the aluminum is not directly counted in GDP, but the production of aluminum is included in the value-added method of measuring GDP, Indicate whether each of the following transactions represents the purchase of a final good. B. Consider a simple economy that produces only croquettes. 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. You may assume all households in the economy ate the same bundle/are the same. Suppose the economy is operating at full-employment and all capital goods are subject to legal price ceilings set below equilibrium, Suppose that capital costs $10 per unit and labour costs $4 per unit. The following table contains information on the economy's money supply, velocity of money, price level, and output. Disposable personal income Consumption 0 100 100 120 200 140 300 160 a. a. not change GDP or the category under which the spending is counted. Consider a simple economy that produces only cell phones. Fill in the missing values in the follow selecting the answers closest to the values you calculate. A. Understand how to use the inflation rate formula through examples. Find a new equilibrium. Use the information in the following table to calculate Nominal Gross Domestic Product (Nominal GDP) for 2015. Disposable personal income will Currency: $1,000 Checking Account Balances: $2,000 Savings Account Balances: $5,000 Small-Denomination T. Define Economy and list all inputs and outputs need 100 words at least. Identifying costs of inflation How much L to use to maximize the marginal product of labor? In the short-run, the level of capital is fixed. 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. (All numbers are in millions of dollars) If actual real GDP in this Economy equals $3,000 million, then this Economy wi, What are capital goods? B) For what values of labor does increasing marginal product exist? 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. The realization of these economies of scale, however, is far, Consider a simple economy that produces two goods: pens and oranges. For example, in 2018, the money supply was $320, the price of a pie was $8.00, and the economy produced 600 pies. Suppose that a simple economy produces only the following four goods and services: shoes, hamburgers, shirts, and cotton. 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. a) what is the per-worker production function? What is the best. In a simple economy (assume there are no taxes, thus Y is disposable income), the consumption function is: C=100+0.75Y. The following table shows two scenarios: a low-inflation scenario and a high-inflation scenario. For example, in 2012, the money supply was $280, the price of a pen was $7.00, and the economy produced 600 pens. Decrease Show calculations. 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. "Corporate profits are much too high: Most corporations make profits equal to 50 percent of the price of the products they sell.". For example, in 2019, the money supply was $360, the price of a pie was $9.00, and the economy produced 800 pies. a. \\ 1. {/eq}. In this economy, the level of income at which the consumer breaks even (cons. A break-even level of production. c. There are only a handful of firms competing against each other in, Suppose you have a firm whose production function is given by Q=K^0.3L^0.7. \hspace{70pt}\underline{\text{Total Assets}} \hspace{115pt} \underline{\text{Stockholders' Equity}}\\ We will let suicide victims be our population. The following table contains information on the economy's money supply, velocity of money, price level, and output. A. Find the equilibrium real interest rate. For example, in 2011, the money s; The equation of exchange Consider a simple economy that produces only cell phones. Last year, she purchased $7,000 worth of scrap metal. Question Velocity and the quantity equation Consider a simple economy that produces only cell phones. RaceandSex11415242564over64TOTALSwhite,male2103,36013,61022,050white,female805803,3804,930black,male104601,0601,670black,female040270330allothersTOTALS3104,65018,78029,760\begin{array}{|l|l|l|l|l|l|} . c) how many workers to hire. Find the probability that a randomly selected individual was a white male. 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. 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. The table gives the number of suicides estimated in the U.S. for a recent year by age, race (black or white), and sex. Suppose the firm is operating in the short-run with K = 9. a. output and prices. 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. decrease The nominal interest rate on the bonds adjusts automatically to account for the inflation rate. The money wage rate falls, real GDP increases, and the price level rises. Will you buy a flat screen or 3D television? Round to 2 decimal places. This firm operates in the short run where capital (K) is fixed at a quantity of 16. Find short-run equilibrium output. copyright 2003-2023 Homework.Study.com. Derive the short run, Economic theory suggests that as plant size increases, the average cost of production should fall. Fill in the missing values in the following table, selecting the answers closest to the values you calculate. b, Indicate on a graph of the circular flows in the market economy, the real and money flows in which the following items belong: a. 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. What is the cost of one more beer? Corn Bread 110 $1.00 Assume that the economy is initially at point Y in the graph. D. Net working capital is defined as current assets minus the sum of payables and accruals, and any decrease in the current ratio automatically indicates that net working capital has decreased. Show this change on the PPC above (make sure to label the change clearly). What he can't spend, he converts into a more stable foreign currency for a steep fee. Numerically. (Enter your response as an integer.) \\ The following table contains information on the economy's money supply, velocity of money, price level, and output. All other trademarks and copyrights are the property of their respective owners. This will. For example, in 2019, the money supply was $280, the price of a pie was $7.00, and the economy produced 600 pies. At the equilibrium real wage RW0, the country's labor force works L0 hours and produc, Consider an economy described as follows: a. Compute private saving, public saving, and national saving. Which of the following statements is CORRECT? \\ Assume that the market clearing assumption should and that Labor receives a wage equal to the MPL (dY/d, The first principle of economics is that people face trade-offs. Consider a simple economy that produces only pies. The following table shows the prices and quantities of the goods over a three-year period. The company's production f. Suppose the production function for a firm is given by q = 5L0.5K0.25. Under what circumstances would GNP be much larger than GDP? For example, in 2011, the money supply was $320, the price of a cell phone was $8.00, and the economy produced 600 cell phones. REQUIRED People in this economy save 36 cents of each dollar of income they receive. What is the short-run production function? Gross National Product (GNP) differs from U.S. Make sure to label both axis and include a dot on the curve that represents our state of economy. Velocity and the quantity equation Consider a simple economy that produces only pens. Decreasing, Chapter 30 Post-Class Assignment Part II: Mon, SS Persia, Greece, Rome multiple choice test, Statistical Techniques in Business and Economics, Douglas A. Lind, Samuel A. Wathen, William G. Marchal, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, David R. Anderson, Dennis J. Sweeney, James J Cochran, Jeffrey D. Camm, Thomas A. Williams, Unit 5: Civil War & Reconstruction Study Guide. The following table contains information on the economy's money supply, velocity of money, price level, and output. Velocity and the quantity equation Consider a simple economy that produces only cell phones. Economists tend to assume that a firm's production function is subject to increasing returns to scale, when the amount is small, and to decreasing returns to scale, when the output is large. You can produce 30 units that you can sell, The first principle of economics is that people face trade-offs. Capital and land are fixed factors while labor can move, Consider Australia as a small open economy. 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). Inflation \ rate \ from \ 2011 \ - \ 2012 \ = \ 5\% \hline \text { black, female } & 0 & 40 & 270 & & 330 \\ RaceandSexwhite,malewhite,femaleblack,maleblack,femaleallothersTOTALS1142108010031015243,360580460404,650256413,6103,3801,06027018,780over64TOTALS22,0504,9301,67033029,760. Quantity of Money Price Level (Dollars) Quantity of Output (Cell phones) Nominal (Dolla: Year Velocity of Money increased 2017 7.20 500 2018 decreased 15 500 remained the same The mo rate of from 2017 to 2018. Money \ supply \ grew \ = \ \dfrac{12}{240} \ \times \ 100 Fill in the missing values in the folowing table, Consider a simple economy that produces only cell phones. Define the term information technology. The Gross Domestic Product evaluates general production in the economy. What are consumer goods? Fill in the missing values in the following . Then use the income-expenditure(45 line) diagram to determine the equilibrium level of GDP. - the fallacy of composition. Product Quantity Price Quantity Price There are six equally productive individuals on the island. "Whenever real GDP declines, nominal GDP must also decline." Suppose the amount the federal government collects in personal income taxes increases, while the level of GDP remains the same. There are two goods, Coal and Wheat, produced with two factors of production, capital and labour. If nominal GDP declined between 2008 and 2009, then the the GDP deflator must also have declined. C. If a company follows a policy of matching maturities, this means that it matches its use of common stock with its use of long-term debt as opposed to short-term debt.
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