consider a simple economy that produces only cell phones

The market price of a product is above the average cost of production. Which of the following will describe the marginal product of labor (MP_L) for this production function? Velocity and the quantity equation Consider a simple economy that produces only pies. Denim Value+Wine Value + Textbook Value= RGDP Wine 90 11 80 10 It can produce two goods, apples and bananas. Derive the short run, Economic theory suggests that as plant size increases, the average cost of production should fall. NNP = GNP - Depreciation = 13300-1400 = 11900 This country produces both goods (clothing with capital and labor; food with land and labor) and imports food. Currently U.S. is producing 150 cloth and 50 machines. See answer Advertisement topeadeniran2 Consider a simple economy that produces only cell phones. 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. 3. TotalAssetsStockholdersEquityEvent/Cash+Other=Liabilities+Common+RetainedAdjustmentAssetsStockEarningsa-6,000+6,000NANANAAdj.NA-4,500NANA-4,500\begin{array}{lrr} What are consumer goods? (Assume that the change in fair value results from a change in market interest rates rather than a change in instrument-specific credit risk.). All rights reserved. a. 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. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. 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}. The production function is: f(K,L) = K^1/3 L^1/3. The following table contains information on the economy's money supply, velocity of money, price level, and output. b. multiproduct firms will enjoy a cost advantage because they have the opportunity to divide their pool of worker, Consider three firms: firm A, a mining enterprise; firm B, a steelmaker; firm C, a car-maker. For example, in 2019, the money supply was $360, the price of a pie was $9.00, and the economy produced 800 pies. Compared with lower inflation rates, a higher inflation rate will ______ the after-tax real interest rate when the government taxes nominal interest income. Show calculations. 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? \\ Fixed cost is FC = 500 (sunk cost). 4. Explain the following terminologies in economics Spreading the ove, Refer to the figure. Instruction: Your response should be rounded to the nearest whole number. \\ (less than), Consider the following simple economy that produces only three goods: 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? \hspace{28pt} \text{NA} \hspace{29pt} \text{-4,500} \hspace{40pt} \text{NA} \hspace{55pt} \text{NA} \hspace{45pt} \text{-4,500}\\ Velocity \ of \ money \ (2011) \ = \ 15 (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? Velocity and the quantity equation Consider a simple economy that produces only pens. Find the marginal product of labor (MPL). N GDP = 137.5 x 1.5 + 1350 x 60 = 81206.25 Nineteen percent of employers provide a one-day paid holiday with workers off Thanksgiving Day. Paul s Pizza Parlor bakes pizza pies according to the following production function: Q = 3L + 0.3L^2 - 5L^3. Our experts can answer your tough homework and study questions. a. Get access to this video and our entire Q&A library, What Is Inflation Rate? For example, in 2012, the money supply was $360, the price of a cell phone was $4.50, and the economy produced 800 cell . Figures are in billions of dollars. Production from a U.S. firm that operates in Mexico. a) what is the per-worker production function? The following table contains information on the economy's money supply, velocity of money, price level, and output. B) For what values of labor does increasing marginal product exist? Find a new equilibrium. ?1.) Personal Tax Payments 1,500, National income (NI) equals $11860 billion. copyright 2003-2023 Homework.Study.com. 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. The bonds offer a real interest rate of 4.5% per year. All other trademarks and copyrights are the property of their respective owners. Assume the following production possibilities data are for a small country off the coast of South America. Draw graphs to support your answer. Explain briefly why an economy that c. The table below provides information about an open economy with the public sector. The following table contains information on the economy's money supply, velocity of money, price level, and output. Assume that the wage rate is $20. C. a decrea. \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}\\ Explain your graph. For example, in 2017, the money supply was $320, the price of a cell phone was $8.00, and the economy produced 600 cell phones. In a simple economy (assume there are no taxes, thus Y is disposable income), the consumption function is: C=100+0.75Y. Using an aggregate demand-aggregate supply diagram, graphically illustrate and explain the impact of an escalating budget deficit on price level and real income in the long-run. b) Solve for the short-run cost function (, When the costs of a good are paid for by nonconsumers, _______ of the good is produced. Inflation \ rate \ from \ 2011 \ - \ 2012 \ = \ 5\% 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. You can produce 30 units that you can sell, The first principle of economics is that people face trade-offs. 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. 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. Suppose that John, April, and Tristan have two production plants for producing orange juice. NI = NNP - Indirect Business taxes =11900 - 40 = 11860 The following table contains information on the economy's money supply, velocity of money, price level, and output. D. all of the above, Consider the following short run production function. What do you suppose determines the, Suppose the marginal product of labor is 10 and the marginal product of capital is 8. 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. 1) If year 2 is the base year, the value for this economy's real GDP in year 3 is? Show more Business Economics Answer & Explanation Solved by verified expert The country has a constant technology, population and capital stock (in other words, real GDP is constant throughout). Suppose the economy experiences a negative shock to the banking system. Discover the causes of inflation and how to calculate it. 2000 (Base Year) 2009 Find the equilibrium real interest rate. The following table contains information on the economy's money supply, velocity of money, price level, and output. 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. B. more labor and less capita, Suppose a firm's production function is given by the equation Q = 12L^.5K^.5 . Net working capital is defined as current assets minus the sum of payables and accruals, and any increase in the current ratio automatically indicates that net working capital has increased. "Whenever real GDP declines, nominal GDP must also decline." Discuss with 2 diagrams: (The aid of aggregate output market diagram and money mar, Suppose the information in the following table is for a simple economy that produces only the following four goods: shoes, hamburger, shirts, and cotton. GNP $13,300 a. Graph Home's PPF, with apples in the horizontal axis, b. \end{array} In 2015, the economy produced 70 flashlights and 40 fishing lures, and the prices of flashlights and fishing lures were $5 and $12, respectively. 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. Currently, each factory is producing 1,000 boxes of taffy at the same total cost. How do you know? Gross Domestic Product (GDP) in which of the following ways? If both output and prices are falling, then both real GDP and nominal GDP will fall. In the short run, K is fixed at K=10. 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. (Part A) You know that you are operating in a monopolistically competitive market, that is, you are a small part. {eq}Inflation \ rate \ from \ 2011 \ - \ 2012 \ = \ \dfrac{7.56 \ - \ 7.20}{7.2} \ \times \ 100 The contract required a one-year commitment starting September 1. If th, Suppose that this year's velocity is 10, nominal GDP (PY) is $50 billion, and real GDP (Y) IS $10 billion. . (Round to the nearest 2 decimal places if necessary. A. b.not change GDP, it changes the category under which the spending is counted. 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. 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. Consider two products, cloth and machines. 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). The following table contains information on the economy's money supply, velocity of money, price level, and output. Consider an economy that begins with an output equal to its natural level. . Suppose the amount the federal government collects in personal income taxes increases, while the level of GDP remains the same. The table below provides information about an open economy with a public sector. 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. Real GDP falls if output falls. Household production and the underground economy. Few foreign firms maintain facilities in the U.S. while many U.S. firms are currently operating abroad. 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. Image transcription text 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. 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. All of the above would push GNP above GDP. A) What is the marginal product of labor function? a. Use a production possibilities frontier to illustrate society's trade-off between two "goods" a clean environment and the quantity of industrial output. They have a total of 2000 crates of oranges. decrease Learn the definition of gross domestic product (GDP) and review types and examples. Which of the following is NOT a shortcoming of GDP as a measure of well-being? d. provide minimum incomes for, Consider the following changes in the economy. Experts are tested by Chegg as specialists in their subject area. Note that consumption does n, Consider a Solow growth model with no population growth. 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. Production and Prices in Year 1 (Base year) Numerically. Assume Government expenditure has increased by 10. Find the probability that a randomly selected individual was a white male. Think about the following news item. Using the line drConsider a decrease in the supply of money th, An economy with zero net exports is described below: C= 80 + 0.75 (Y - T) I^p= 100 G= 150 NX= 0 T= 180 The multiplier in this economy is 4. a. B. (a). Many U.S. citizens currently work in foreign countries while few foreign citizens currently work in the U.S. Consider a simple economy that produces only pies. Suppose that John, April, and Tristan have two production plants for producing orange juice. Understand how to use the inflation rate formula through examples. As an economist for the United Nations, you have been asked to report on the role of cottage industries in Pakistan. \hline \text { white, male } & 210 & 3,360 & 13,610 & & 22,050 \\ The table gives the number of suicides estimated in the U.S. for a recent year by age, race (black or white), and sex. You buy an iPad from the Apple Store. A) financial services B) electricity C) mobile phones D) mass transportation, 3. explain the three dis, Suppose the following situation exists for an economy: Kt+1/N < Kt/N. 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)}. The price of a unit of beef = $19 and the price of a unit of soy = $14. 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. 4. Since cell phone output the change in the money supply was reflected money + 2017 to 2018 was. We are interested in possible relationships between age, race, and sex. 2) If year 1 is the base year, the valu. Last year, she purchased $7,000 worth of scrap metal. Derive an equation for the (short run) average product of labor and for the short run marginal product of labor. Derive the base-year-quantity price index. Fill in the missing values in the following table. For example, in 2011, the money s, Suppose Home has 300 units of labor. \\ 2009 Q x 2000 P = Value Consider a simple economy that produces only cell phones. What is the level of productivity? What will happen to the values of national income, personal income, and disposable personal income? Consider a simple economy that produces only cell phones. Even if GDP included these types of production, why would it still be an imperfect measure of economic well-being? Which of the following st, Quantecon is a country in which the theory of money operates. Conversely, when calculated using current year prices it is called nominal GDP. Assume a December 31 closing date. The company's production f. Suppose the production function for a firm is given by q = 5L0.5K0.25. REQUIRED Show how to think about them using the IS curve: i.e. prices have decreased 2 percent between the base year and 2012. GDP only counts final goods and services and not intermediate goods. 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. Draw a production possibility curve (PPC). Ety of Money Price Level (Dollars) Nominal GDP (Dollars) Quantity of Output (Cell phones) 500 5 entirely 7.20 15 from 2017 to 2018. 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. Be su. The following table contains information on the economy's money supply, velocity of money, price level, and output. Transfer Payments 600 d. spending and output. B. Th, Consider the following model of a very simple economy: C=100+0.8Y+0.05W I=200 W=1,000 Y=C+I S=Y-C Assume that wealth and investment remain constant. The first event is recorded as an example. 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. The following table contains information on the economy's money supply, velocity of money, price level, 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. Now consider the long-run impact of the change in money growth and inflation. For. Fill in the missing values in the {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. Using this data, compute the value for savings at each level of disposable income. There are six equally productive individuals on the island. Aggregate supply describes a relationship between? = 11860 - 1250 + 600 = 11210 . In an economy with rising prices, compared to the base year. 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. \\ a. Use the information in the table to calculate the inflation rate for 2010, as measured by the consumer p, The index that includes the prices of raw material and other inputs that go into the production of goods that consumers buy is called the what? If nominal GDP declined between 2008 and 2009, then the the GDP deflator must also have declined. GDP is not adjusted for pollution and it does not account for unequal income distribution. Show this change on the PPC above (make sure to label the change clearly). They have a total of 850 crates of oranges. You will pay $10,000 for labor costs and $12,000 for capital costs. Suppose GDP in this country is $1,175 million. What is the marginal product of labor? (a) Use the AD-AS and IS-LM models to show the effects of the shock on the AD, AS, IS, and LM curves. Agree. Make sure to label both axis and include a dot on the curve that represents our state of economy. 1. The government cuts public spending. Since cell phone output did not change from 2017 to 2018 and the velocity of money the change in the money supply was reflected In changes in the price level. Assume Government cut income taxes by 10. A slice of pizza costs $3. Get access to this video and our entire Q&A library, Gross Domestic Product: Definition and Components. John's factory has high fixed costs and low variable costs. 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. GDP deflator = Nominal GDP / Real GDP 100. L stands for number of workers. 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. The following table contains information on the economy's money supply, velocity of money, price level, and output. remain the same Corn Bread 110 $1.00 For example, in 2010, the, A small open economy trades food and clothing on world markets at prices PTF and PTC. Draw the short run Phillips curve and relate it to our economy today. \hline \text { Race and Sex } & \mathbf{1 - 1 4} & \mathbf{1 5 - 2 4} & \mathbf{2 5 - 6 4} & \text { over 64 } & \text { TOTALS } \\ (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. Question Velocity and the quantity equation Consider a simple economy that produces only cell phones. Which of the following do we subtract from GDP to obtain national income? Will a hike in the gas tax, Refer to the budget line shown in the diagram. 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. Carrie's marginal utility per dollar from increasing cons. Find short-run equilibrium output. Draw a graph of aggregate demand and aggregate supply to illustrate the current situation. Today, the typical American works fewer than 40 hours per week. Which of the following statements is CORRECT? The inflation rate from 2017 to 2018 was. $1 per pound, Commercial airplanes 10 airplanes $10 million per airplane. GDP = (50,000,000 * 1) + (10 * 10,000,000) = $150,000,000. Gross National Product (GNP) differs from U.S. In the United States, the difference between GNP and GDP is _________ that of many other countries. Consider a simple economy that produces only pies. If the wage rate is $4 and the price of capital is $6, then in order to minimize costs, the firm should use: a. more labor and less capital. Fill in the missing values in the folowing table, Consider a simple economy that produces only cell phones. {/eq}, {eq}Money \ supply \ grew \ = \ \dfrac{252 \ - \ 240}{240} \ \times \ 100 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. 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. Numerically. (b) Graph the short-run marginal and average product curves. These are your only costs. 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. Consider a simple economy that produces two goods: pencils and muffins. Nominal GDP can increase if output falls and prices rise. 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 per-worker production function? B. Resources in an economy are not fully utilized. 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 economy is in long-run macroeconomic equilibrium. Consider a simple economy that produces only pies. A. 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. Consider two products, cloth and machines. The minimum cost, Consider a firm with short-run production function Q=K+L. The following table contains information on the economy's money supply, velocity of money, price level, and output. 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. Production and Prices in Year 2 The country has a constant technology, population and capital stock (in other words, real GDP is constant throughout). The following table contains information on the economy's money supply, velocity of money,. 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. GNP considers production that occurs outside the U.S. The unanticipated change in inflation arbitrarily benefits _______. This firm operates in the short run where capital (K) is fixed at a quantity of 16. Assuming that the bonds were sold at 100 plus accrued interest on October 1, 2018, prepare the necessary journal entry. Indicate whether the following statement is correct or incorrect. Refer to the table. 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). \\ Assume there are no traveler's checks. "If a recession is so severe that the price level declines, then we know that both real GDP and nominal GDP must decline." Under a perpetual inventory system, acquisition of merchandise for resale is debited to: The event requires a year-end adjusting entry. Use the e. Consider a simple economy that produces only pies. 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. Question: Velocity and the quantity equation Consider a simple economy that produces only cell phones. \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}\\ a. Graph the PPC for both Countries. Then use the income-expenditure(45 line) diagram to determine the equilibrium level of GDP. Velocity and the quantity equation Consider a simple economy that produces only cell phones. All numbers are in millions of dollars. Corn Bread 137.50 $1.50 How many workers to hire, b. 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. 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. 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. Few foreign citizens currently work in the U.S. and few foreign firms maintain facilities in the U.S.

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