How do they affect the environment and economy? 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. What is the marginal product of labor? Then, average total cost (ATC) is A) 25 cents per unit and average fixed cost (AFC) is 15 cents per unit. remain the same The firm pays a wage of $30 per units and pays a rental rate of capital $10 per unit. Image transcription text Question: Consider a simple economy that produces only cell phones. For example, in 2017, the money supply was $200, the price of a pen was $5.00, and the economy produced 400 pens. The equation of exchange Consider a simple economy that produces only Right now, the firm has 10 units of K, w = 3, and r = 10. Which range of aggregate supply would represent an economy in the short term when prices are sticky and the economy is producing low levels of output? - Definition & Formula. The unanticipated change in inflation arbitrarily benefits _______. 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. The bonds offer a real interest rate of 4.5% per year. How much L to use to maximize the marginal product of labor? With the steel she produced 10 authentic sculptures that she sold for $1,000 each to a local art dealer. REQUIRED Explain the effects on goods and money market separately and the interaction of these markets. What is t, Both Kate and John own saltwater taffy factories. 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. c. Assuming that this economy produces only the thr. The following table contains information on the economy's money supply, velocity of money, price level, and output. Agree. Real GDP = 137.5 x 1 + 1350 x 30 = 40637.5, Billions of dollars Inflation refers to the increase in the price of the goods and services in an economy during a year. If the wage is $10 and the rental rate on capital is $20, the short run marginal cost is _____. Velocity and the quantity equation Consider a simple economy that produces only pies. Suppose that John, April, and Tristan have two production plants for producing orange juice. Experts are tested by Chegg as specialists in their subject area. Assume it is currently in its initial steady state. Show how the event and its related adjusting entry affect the accounting equation. Velocity and the quantity equation Consider a simple economy that produces only cell phones. 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). With no changein aggregate demand, how does the economy return to full employment? nominal GDP is larger than real GDP in years after the base year. Will a hike in the gas tax, Refer to the budget line shown in the diagram. (Enter your response as an integer.) Question Velocity and the quantity equation Consider a simple economy "If a recession is so severe that the price level declines, then we know that both real GDP and nominal GDP must decline." The following table contains information on the economy's money supply, velocity of money, price level, and output. \hspace{70pt}\underline{\text{Total Assets}} \hspace{115pt} \underline{\text{Stockholders' Equity}}\\ Suppose that a simple economy produces only the following four goods and services: shoes, hamburgers, shirts, and cotton. a) what is the per-worker production function? The table below provides information about an open economy with a public sector. According to the CAGE framework, which of the following is an example of a product most affected by economic distance? Nominal GDP (Dollars) Year Velocity of Money Quantity of Money (Dollars) 200 202 Price Level Quantity of Output (Dollars) (Pens) 5.00 400 400 2017 2018 The money supply grew at a rate of from 2017 to 2018. Fill in the missing values in the following . \\ Price \ of \ cell \ phones \ (2012) \ = \ \dfrac{3,780}{500} Price \ of \ cell \ phones \ (2012) \ = \ \$7.56 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. Become a Study.com member to unlock this answer! Find the Marginal Product of Labor (MP_L). The labor costs $6 and pizza sells for $10. Indicate whether the following statement is correct or incorrect. Fixed cost is FC = 500 (sunk cost). Derive an equation for the (short run) average product of labor and for the short run marginal product of labor. \hline The art dealer then sold all of the sculptures to art collectors for an average of $1,200 each. explain why real domestic output and the price level are directly related. 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. Conversely, when calculated using current year prices it is called nominal GDP. Suppose there are two closed economies: Economy A and Economy B. \hline \text { white, male } & 210 & 3,360 & 13,610 & & 22,050 \\ Consider a simple economy that produces only pies. The following table b. (Round to the nearest 2 decimal places if necessary. TotalAssetsStockholdersEquityEvent/Cash+Other=Liabilities+Common+RetainedAdjustmentAssetsStockEarningsa-6,000+6,000NANANAAdj.NA-4,500NANA-4,500. 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. 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, Consider an economy that produces consumer goods and capital goods. {/eq}. 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? Consider an economy has the following information 1. 1. Instruction: E, The following table shows prices an quantities for two goods over three different time periods. Consider a simple economy that produces only pies. GDP Example Problems Flashcards | Quizlet Use the information in the following table to calculate Nominal Gross Domestic Product (Nominal GDP) for 2015. (1) Describe the diff, The diagram below shows the aggregate labor market and aggregate production function for the country of Bonavista. Suppose that Home has 100 workers, a marginal product of 4 making apples, and a marginal product of labor of 4 making shirts. 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. B. how firms respond to changes in interest rates. How many workers to hire, b. 3. 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. Suppose also that we produce 125 units of beef and 460 units of soy. \\ The following table contains information on the economy's money supply, velocity of money, price level, and output. 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. 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. A. Fill in the missing values in the following table, selecting the answers closest to the values you calculate. In a certain economy, when income is $100, consumer spending is $60. What are the equilibrium levels of: a. GDP? The country has a constant technology, population and capital stock (in other words, real GDP is constant throughout). 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. Consider a simple economy that produces only pies. selecting the answers closest to the values you calculate. Our experts can answer your tough homework and study questions. 2000 (Base Year) 2009 Suppose in the short run a firm's production function is given by Q = L1/2K1/2, and K is fixed at K = 36. B. In a simple economy (assume there are no taxes, thus Y is disposable income), the consumption function is: C=100+0.75Y. 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. 4. Velocity and the quantity equation Consider a simple economy Disposable personal income Consumption 0 100 100 120 200 140 300 160 a. 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. The increase in real GDP per capita between 1890 and today understates well-being because the value of leisure is not included in GDP. The following table shows the prices and quantities of the goods over a three-year period. Denim pants 80 $40 100 $50 If the price per unit of the good is $1.9 and labor costs $10 per unit. You can produce 30 units that you can sell, The first principle of economics is that people face trade-offs. Using Aggregate Demand and Aggregate Supply, explain the effect of a decrease in Lump Sum Taxes on the price level and GDP in the short run (i.e., until the end of the first period) on the level of ou, Consider an economy described by the production function: Y = F(K,L) = K^{(0.32)}L^{(0.68)}. Question: Velocity and the quantity equation Consider a simple economy that produces only cell phones. 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. \\ Agree. 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. In the short run, K is fixed at K=10. Consider a simple economy that produces only cell phones. {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 cost are $200 and the wage rate for labor is $50. Question: Consider a simple economy that produces only cell phones. Find the probability that a randomly selected individual was a white male. 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? Production from a U.S. firm that operates in Mexico. According to the Fisher effect, as expectations adjust to the new, higher inflation rate, the nominal interest rate will ______ to 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? Gross Domestic Product (GDP) in which of the following ways? In the short run, the firm has 16 units of capital. Fill in the missing values. Inflation \ rate \ from \ 2011 \ - \ 2012 \ = \ \dfrac{0.36}{7.2} \ \times \ 100 \text{Adjustment} \hspace{54pt} \text{Assets} \hspace{105pt} \text{Stock} \hspace{36pt} \text{Earnings}\\ People in this economy save 36 cents of each dollar of income they receive. The following table contains information on the economy's money supply, velocity of money, price level, and output.
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