What is the base year for this particular set of CPI data? 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. 1. For example, in 2017, the money supply was $360, the price of a pie was $9.00, and the economy produced 800 pies. If the price per unit of the good is $1.9 and labor costs $10 per unit. Yes. A. (Assume that the change in fair value results from a change in market interest rates rather than a change in instrument-specific credit risk.). Discourage Make sure to label both axis and include a dot on the curve that represents our state of economy. 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? These sweaters are made using a combination of labor and knitting machines. \hline \text { white, male } & 210 & 3,360 & 13,610 & & 22,050 \\ Worker B can produce 10 tables or 10 chairs, and worker C can produce 8 tables or, Suppose you are thinking of starting a new business. What is the per-worker production function? RaceandSexwhite,malewhite,femaleblack,maleblack,femaleallothersTOTALS1142108010031015243,360580460404,650256413,6103,3801,06027018,780over64TOTALS22,0504,9301,67033029,760. Find a new equilibrium. \hline \text { white, female } & 80 & 580 & 3,380 & & 4,930 \\ Velocity and the quantity equation Consider a simple economy that . 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. You will need to give up your current job that pays you $20,000. The pizza company also buys $. The soda, pizza and cheese companies employ labor and land to produce their products. Will you buy a flat screen or 3D television? Response has to be original. (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. 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). Fill in the missing values in the following . 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. GDP = (50,000,000 * 1) + (10 * 10,000,000) = $150,000,000. remain the same a. d) All of the above are correct. The first event is recorded as an example. 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. A. (Enter your response as an integer.) Gross National Product (GNP) differs from U.S. The economy experienced economic growth over time. 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 . \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}\\ Which of the following st, Quantecon is a country in which the theory of money operates. In the short run, the firm has 16 units of capital. Corporate earnings 1,250 Suppose you have the following disposable income and consumption data for an economy, as shown in the table below. Assume the following equations summarize the structure of an economy. 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 following table contains information on the economy's money supply, velocity of money, price level, and output. The government places a modest minimum wage on this industry above the market clearing equilibrium wage. 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? Suppose that the table below shows an economy's relationship between real output and the inputs needed to produce that output: Consider the following data. 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. [Solved] Please can you help me out with this question. I would Inflation \ rate \ from \ 2011 \ - \ 2012 \ = \ \dfrac{0.36}{7.2} \ \times \ 100 The art dealer then sold all of the sculptures to art collectors for an average of $1,200 each. The following table contains information on the economy's money supply, velocity of money, price level, and output. 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. For example, in 2019, the money supply was $280, the price of a pie was $7.00, and the economy produced 600 pies. The company's production f. Suppose the production function for a firm is given by q = 5L0.5K0.25. Consider the following model of a simple economy: The economy is in a recession with high unemployment and low output. Transfer Payments 600 Consider a simple economy that produces two goods: apples and envelopes For this economy, A) Sh, Consider a small open economy whose relative prices are determined externally in the international market. Draw a graph of aggregate demand and aggregate supply to illustrate the current situation. 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. Consider a simple economy that produces only pies. The following table The Gross Domestic Product evaluates general production in the economy. (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? Suppose half the capital stock is suddenly destroyed(leaving the labor force unchanged). B. in the short run, the firm cannot add workers. 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. B. Personal Tax Payments 1,500, National income (NI) equals $11860 billion. 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. Wine 90 11 80 10 The economy is in long-run macroeconomic equilibrium. 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. Suppose that a simple economy produces only the following four goods and services: shoes, hamburgers, shirts, and cotton. 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. Image transcription text 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. The following table contains information on the economy's money supply, velocity of money, price level, and output. 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. Resources in an economy are not fully utilized. b.not change GDP, it changes the category under which the spending is counted. All other trademarks and copyrights are the property of their respective owners. Velocity and the quantity equation Consider a simple economy that produces only pens. The following table contains information on the economy's money supply, velocity of money, price level, and output. Kate's factory has low fixed costs and high variable costs. a) Determine the equations for MPL and APL. Assume an economy where the production function is F(K,L) = L2/3K1/3 if L is 125 and K is 1000. \hspace{70pt}\underline{\text{Total Assets}} \hspace{115pt} \underline{\text{Stockholders' Equity}}\\ 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? 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. b. Apple Inc. pays the designe, Suppose the following information describes a simple economy. \hspace{23pt}\text{a} \hspace{27pt} \text{-6,000} \hspace{22pt} \text{+6,000} \hspace{40pt} \text{NA} \hspace{55pt} \text{NA} \hspace{52pt} \text{NA}\\ Consider a simple economy that produces only cell phones. 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. You buy an iPad from the Apple Store. In the U.S., gross domestic product (GDP ) and gross national product (GNP) are close in value. Denim pants 80 $40 100 $50 Consider a simple economy that produces only cell phones. The firm has 10 units of capital in the short run. We are interested in possible relationships between age, race, and sex. The country has a constant technology, population and capital stock (in other words, real GDP is constant throughout). What do you suppose determines the sh, Suppose we have a two good economy that produces beef and soy. Money \ supply \ grew \ = \ 0.05 \ or \ 5\% The consumer can borrow or save at the interest rate 10%. Assume that there are two sectors, manufacturing and farming. Derive the base-year-quantity price index. C. Whe, Suppose that a firm has a production function given by: q= 10 L^{0.4}K^{0.6}. The following table contains information on the economy's money supply, velocity of money, price level, and output. The market wage for whites is $15, and the market wage for blacks is $10, Consider the following Economy: Only Coconuts are produced, using labor Year 1 Coconut Producer Total Revenue $20 Wages $5 Taxes $1.5 Interest on Loan $0.5 (a) What is the Coconut Producer contributio, Suppose you are hired to manage a small manufacturing facility that produces Widgets. 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. N GDP = 137.5 x 1.5 + 1350 x 60 = 81206.25 A) What is the marginal product of labor function? 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. How. The following table contains information on the economy's output, money supply, the velocity of money, and price level. The following table contains information on the economy's money supply, velocity of money, price level, and output. Real GDP falls if output falls. Suppose that a simple society has an economy with only one resource, labor. a) The GDP of this country would be $ million. \hline \text { black, male } & 10 & 460 & 1,060 & & 1,670 \\ This country produces both goods (clothing with capital and labor; food with land and labor) and imports food. A Bureau of National Affairs survey found that 79% of employers provide their workers with a two-day paid Thanksgiving holiday with workers off both Thursday and Friday (USA Today, November 12, 2009). Note that consumption does n, Consider a Solow growth model with no population growth. This will. Consider two products, cloth and machines. Inflation refers to the increase in the price of the goods and services in an economy during a year. Consider a simple economy that produces only cell phones. \text{Adjustment} \hspace{54pt} \text{Assets} \hspace{105pt} \text{Stock} \hspace{36pt} \text{Earnings}\\ The following table shows the prices and quantities of the goods over a three-year period. Consider two products, cloth and machines. Velocity and the quantity equation Consider a simple economy that produces only pens. Assume that the aggregate production function has the form Y = K^(1/3) L^(2/3). Learn the definition of gross domestic product (GDP) and review types and examples. b. spending and income. 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. Question: Velocity and the quantity equation Consider a simple economy that produces only cell phones. For example, in 2018, the money supply was $320, the price of a pie was $8.00, and the economy produced 600 pies. 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. Use a solow diagram to explain how the economy behaves ov. For example, in 2012, the money supply was $280, the price of a pen was $7.00, and the economy produced 600 pens. \\ The following table contains information on the economy's money supply, velocity of money, price level, and output. - opportunity costs. What benefits do cottage industries provide to local populations? c. costs and revenue. Fill in the missing values in the following table. 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. - the fallacy of composition. 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. b. determine how large the budget deficit should be. Production and Prices in Year 1 (Base year) The government cuts public spending. Right now, the firm has 10 units of K, w = 3, and r = 10. You will pay $10,000 for labor costs and $12,000 for capital costs. "Corporate profits are much too high: Most corporations make profits equal to 50 percent of the price of the products they sell.". c. decide how much government regulation there should be. "If real GDP stayed the same while nominal GDP declined between 2008 and 2009, then the GDP deflator must also have declined.". This is an example of the ___________ of inflation. The velocity of money remained the same at 15. Money \ supply \ grew \ = \ \dfrac{12}{240} \ \times \ 100 The money supply grew at a rate of from 2014 to 2015. The realization of these economies of scale, however, is far, Consider a simple economy that produces two goods: pens and oranges. In 1890, the typical American worked 60 hours per week. What is the cost of one more beer? Find short-run equilibrium output. The efficiency of ma3. The government taxes nominal interest income at a rate of 10%. \\ a. Indirect Business Taxes 40 Use a production possibilities frontier to illustrate society's trade-off between two "goods" a clean environment and the quantity of industrial output. The transaction costs of exchanges are lower in a barter economy than in a money economy. The economy has two sectors-cloth and food. Question Velocity and the quantity equation Consider a simple economy For example, in 2010, the, A small open economy trades food and clothing on world markets at prices PTF and PTC. Suppose you are deciding whether to spend your tax rebate check on AirPods or save the money for a new smart phone. What is the best. a. Show this change on the PPC above (make sure to label the change clearly). In the short run, the firm has 16 units of capital. 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. 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. Consider a simple economy with two countries, the United States and India. The value of the multiplier for this economy is 4. Refer to the table. 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. 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, is aluminum used to produce a new mountain bike included in GDP? Suppose the base year is 2001. 3. 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. Personal income will 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. Solved 5. Velocity and the quantity equation Consider a - Chegg a) What is the price level and money supply? (Solved) - Consider a simple economy that produces only cell phones The price of output is 'p,' the, Suppose a firm's short-run production function is given by Q = F(L) = 10L. C. all things are produced at the lowest cost. If nominal GDP declined between 2008 and 2009, then the the GDP deflator must also have declined. Consider a simple economy that produces only pies. 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. Capital and land are fixed factors while labor can move be, As the quantity produced by a firm increases, marginal cost eventually starts increasing because: A. of diminishing, or decreasing, marginal product of labor. On that date, the bond traded at a price of 99 (99% of par value) in the bond market. Draw a graph of the money market to illustrate the effect of the Fed purchases government, Consider the following information describing a closed economy with no government and where aggregate output is demand determined 1. the equilibrium condition is Y = C + I 2. the marginal propensity, Refer to the table above, Consider a simple economy with two countries, the United States and India. The contract required a one-year commitment starting September 1. For example, in 2017, the money supply was $200, the price of a pen was $5.00, and the economy produced 400 pens. \\ B. fully employing all economic resources. The following table contains information on the economy's money supply, velocity of money, price level, and output. If firms in this industry. 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. Find the probability that a randomly selected individual was a white male. An artist buys scrap metal from a local steel mill as a raw material for her sculptures. 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. In 2015, the economy produces 1,000 tonnes of apples, 2,000 tonnes of oranges, and 3,000 tonnes of bananas. 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. The money supply is $3 trillion, the price level equals 2, the real GDP is $6 trillion in base-year dollars. 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. 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? 9.5; 4.5; ____; ____; ____; Inflation-induced tax distortions Fill in the missing values in the follow selecting the answers closest to the values you calculate. B) the scale of operation at which economies of scale are exhausted. The following table contains information on the economy's money supply, velocity of money, price level, and output. Alexander Holmes, Barbara Illowsky, Susan Dean, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman. Assume the following production possibilities data are for a small country off the coast of South America. (1) Describe the diff, The diagram below shows the aggregate labor market and aggregate production function for the country of Bonavista. GDP Example Problems Flashcards | Quizlet Round to 2 decimal places. Velocity and the quantity equation Consider a simple economy that produces only pens. If the GDP deflator in 2012 has a value of 98.0, then. The following table shows the prices and quantities of the goods over a three-year period. What do you suppose determines the, Suppose the marginal product of labor is 10 and the marginal product of capital is 8. The inflation rate from 2011 to 2012 was __________ (5%/2.44%/1.44%/105). Table: Inflation Rate (%); Real Interest Rate (%); Nominal Interest Rate (%); After-Tax Nominal Interest Rate (%); After-Tax Real Interest Rate (%) 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. Price \ of \ cell \ phones \ (2012) \ = \ \dfrac{3,780}{500} Year CPI 2010 98 2011 100 2012 106 2013 107 a. Assume that K is fixed at 10 in the short run. In the short run, the firm has signed a lease to r, Maya papaya runs a profit maximizing firm in which she uses capital (k) and labor (l) to make her pies. Decreasing a) what is the per-worker production function? 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. GNP $13,300 d. spending and output. Find the Marginal Product of Labor (MP_L). The increase in real GDP per capita between 1890 and today understates well-being because the value of leisure is not included in GDP. b. an economy will automatically seek the level of output at which, In the long run, a firm that produces and sells textbooks gets to choose: a. Assuming that the bonds were sold at 100 plus accrued interest on October 1, 2018, prepare the necessary journal entry. b. more capital and less la, Suppose the total cost of production in the short run is $500,000 when 2,000,000 units are produced.