consider a simple economy that produces only cell phones
For example, in 2012, the money supply was $360, the price of a cell phone was $4.50, and the economy produced 800 cell . When the pric, Suppose an economy is characterized by the Solow model. Experts are tested by Chegg as specialists in their subject area. Denim pants 80 $40 100 $50 . 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)}. Fixed cost is FC = 500 (sunk cost). 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. Suppose that John, April, and Tristan have two production plants for producing orange juice. Textbooks 15 90 20 100, Real GDP in 2009 equals $6680. Compared with lower inflation rates, a higher inflation rate will ______ the after-tax real interest rate when the government taxes nominal interest income. For example, in 2011, t, a. Velocity and the quantity equation Consider a simple economy that produces only pies. (Enter your response as an integer.) a. This will. A. Discourage Suppose you are deciding whether to spend your tax rebate check on AirPods or save the money for a new smart phone. 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. (1) Describe the diff, The diagram below shows the aggregate labor market and aggregate production function for the country of Bonavista. Suppose GDP in this country is $1,175 million. The following table contains information on the economy's money supply, velocity of money, price level, and output. NNP = GNP - Depreciation = 13300-1400 = 11900 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. Suppose that Home has 100 workers, a marginal product of 4 making apples, and a marginal product of labor of 4 making shirts. The short-run economic outcome resulting from the increase in production costs is known as. Yes. The velocity of money remained the same at 15. All numbers are in millions of dollars. What is the short-run production function? The following table shows two scenarios: a low-inflation scenario and a high-inflation scenario. 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 first event is recorded as an example. National income will Take the following information as given for a small, imaginary economy: -When income is $10,000, consumption spending is $6,500. Which of the following do we subtract from GDP to obtain national income? Which of the following is NOT a shortcoming of GDP as a measure of well-being? The price of output is 'p,' the, Suppose a firm's short-run production function is given by Q = F(L) = 10L. Fill in the missing values in the following . It can produce two goods, apples and bananas. c. Assuming that this economy produces only the thr. Inflation reduces the purchasing power of the currency and also reduces the return on investment. Gross National Product (GNP) differs from U.S. B. how firms respond to changes in interest rates. Money \ supply \ grew \ = \ 0.05 \ or \ 5\% The following table contains information on the economy's money supply, velocity of money, price level, and output. 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) $4 per unit, and average fixed cost (AFC) is, A firm has the production function q = 0.2LK + 5L^2K - 0.1L^3K. a) The GDP of this country would be $150 million. 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. Fill in the missing values in the following . Fill in the missing values in the. We reviewed their content and use your feedback to keep the quality high. Since cell phone output did not chang money the change in the money supply was reflected in changes 2017 to 2018 was Suppose that the exchange rate is flexible and that there is a permanent increase in total factor productivity (TFP), i.e., both z and z' increase. A. The following table contains information on the economy's money supply, velocity of money, price level, and output. Production and Prices in Year 1 (Base year) Suppose the production function is q=L^{0.75}K^{0.25}. Real GDP falls if output falls. Inflation \ rate \ from \ 2011 \ - \ 2012 \ = \ 5\% Make sure to label both axis and include a dot on the curve that represents our state of economy. U.S. 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. 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. In Home a worker can produce 3 apples or 5 bananas. Show calculations. Consider a simple economy that produces only pies. Define the term information technology. 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? The government taxes nominal interest income at a rate of 10%. Agree. 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. For example, in 2018, the money supply was $320, the price of a pie was $8.00, and the economy produced 600 pies. GDP is not adjusted for crime or other social problems. Production from a U.S. firm that operates in Mexico. Now consider the long-run impact of the change in money growth and inflation. In the short run, the firm has 16 units of capital. 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. 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. Live Happley's production schedule for strawberries is given in t, Assume an industry uses labor and capital in its production process. 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. 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. The following table contains information on the economy's output, money supply, the velocity of money, and price level. (less than), Consider the following simple economy that produces only three goods: The table below provides information about an open economy with a public sector. a) Determine the equations for MPL and APL. b. You are dealing with the concept of - comparative advantage. Explain the following terminologies in economics Spreading the overhead. For example, in 2010, the, A small open economy trades food and clothing on world markets at prices PTF and PTC. Year CPI 2010 98 2011 100 2012 106 2013 107 a. Agree. 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. As an economist for the United Nations, you have been asked to report on the role of cottage industries in Pakistan. 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. 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). Which of the following statements is CORRECT? The increase in real GDP per capita between 1890 and today understates well-being because the value of leisure is not included in GDP. Nominal GDP will be less than real GDP if the price level falls and is lower than the base year's prices. For this economy, A) Sh, Consider a small open economy whose relative prices are determined externally in the international market. The following table contains information on the economy's money supply, velocity of money, price level, and output. A) What is the marginal product of labor function? The following table shows the relationship between output and number of workers in the short run. What are consumer goods? What is the marginal product of labor? \hline \text { Race and Sex } & \mathbf{1 - 1 4} & \mathbf{1 5 - 2 4} & \mathbf{2 5 - 6 4} & \text { over 64 } & \text { TOTALS } \\ 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. GDP deflator = Nominal GDP / Real GDP 100. What is the base year for this particular set of CPI data? Since cell phone output did not change from 20 money the change in the money supply was reflected in changes in the pr 2017 to 2018 was 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. The bonds offer a real interest rate of 4.5% per year. B) For what values of labor does increasing marginal product exist? The marginal product of labor is \frac{10}{E^{0.50. 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. For a given output level, a firm's short-run average product of labor is 4 while its marginal product of labor is 5. What is the opportunity cost of apples? Video Games 1,350.00 $60.00, In Year 2, nominal GDP is equal to: $81206.25, and real GDP is $40637.5 B. more labor and less capita, Suppose a firm's production function is given by the equation Q = 12L^.5K^.5 . b. Round to 2 decimal places. GDP only counts final goods and services and not intermediate goods. All rights reserved. This firm operates in the short run where capital (K) is fixed at a quantity of 16. \\ a. The firm pays a wage of $30 per units and pays a rental rate of capital $10 per unit. The following table contains information on the economy's money supply, velocity of money, price level, and output. C. a decrea. Use a solow diagram to explain how the economy behaves ov. {/eq}, {eq}Money \ supply \ grew \ = \ \dfrac{252 \ - \ 240}{240} \ \times \ 100