consider a simple economy that produces only cell phones

GDP Example Problems Flashcards | Quizlet b) Solve for the short-run cost function (, When the costs of a good are paid for by nonconsumers, _______ of the good is produced. B. how firms respond to changes in interest rates. The following table contains information on the economy's money supply, velocity of money, price level, and output. Decreasing 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. Is the value of intermediate goods and services produced during the year included in Gross Domestic Product (GDP)? Corn Bread 137.50 $1.50 Consider a simple economy that produces only pies. Money \ supply \ grew \ = \ \dfrac{12}{240} \ \times \ 100 0.650. All rights reserved. The labor costs $6 and pizza sells for $10. The short-run economic outcome resulting from the increase in production costs is known as. 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 output? 110x40 + 80x11 + 20x90, If nominal GDP is less than real GDP, then the price level must have fallen during the year For example, in 2012, the money supply was $280, the price of a pen was $7.00, and the economy produced 600 pens. 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? Disposable personal income (DPI)equals $9710 billion. 4. Find short-run equilibrium output. For example, in 2019, the money supply was $360, the price of a pie was $9.00, and the economy produced 800 pies. Consider a simple economy that produces only pies. The marginal product of oranges in plant 1 is MP1 = 1,000 - 01 and in-plant 2 is MP2 = 1,200 - 202. National income will Kate's factory has low fixed costs and high variable costs. Production and Prices in Year 1 (Base year) \hline \text { black, female } & 0 & 40 & 270 & & 330 \\ 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. explain the three dis, Suppose the following situation exists for an economy: Kt+1/N < Kt/N. Gopher Excavators produces shovels in a small factory and sells the shovels in a perfectly competitive market. Assume that the aggregate production function has the form Y = K^(1/3) L^(2/3). {eq}Inflation \ rate \ from \ 2011 \ - \ 2012 \ = \ \dfrac{7.56 \ - \ 7.20}{7.2} \ \times \ 100 The following table contains information on the economy's money supply, velocity of money, price level, and output. Solved 4. Velocity and the quantity equation Consider a - Chegg 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. Use a production possibilities frontier to illustrate society's trade-off between two "goods" a clean environment and the quantity of industrial output. The following table contains information on the economy's money supply, velocity of money, price level, and output. GNP is the value of final goods and services produced by residents of the U.S. Createyouraccount. 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. If firms in this industry. REQUIRED Under a perpetual inventory system, acquisition of merchandise for resale is debited to: The event requires a year-end adjusting entry. All of the above would push GNP above GDP. Then, average total cost (ATC) is A) 25 cents per unit and average fixed cost (AFC) is 15 cents per unit. Consider an economy that begins with an output equal to its natural level. Identifying costs of inflation Further, assume that all of the cotton is used, Consider a simple economy that produces only three products: tacos, earplugs, and toothbrushes. Product Quantity Price Per Unit b. determine how large the budget deficit should be. 1.44% Quantity of Money (Dollars) Price Level (Dollars) Quantity of Output (Cell phones) Nominal GDP (Dollars) ve 2.44% Year Money 500 2017 240 7.20 5% 500 2018 252 105% The money supply grew at a rate of from 2017 to 2018. The following table contains information on the economy's money supply, velocity of money, price level, and output. 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. The following table contains information on the economy's money supply, velocity of money, price level, and output. Last year, she purchased $7,000 worth of scrap metal. The production function is: f(K,L) = K^1/3 L^1/3. Fill in the missing values in the. 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}. Take the following information as given for a small, imaginary economy: -When income is $10,000, consumption spending is $6,500. Nominal GDP will be less than real GDP if the price level falls and is lower than the base year's prices. Currently U.S. is producing 150 cloth and 50 machines. "If a recession is so severe that the price level declines, then we know that both real GDP and nominal GDP must decline." Suppose half the capital stock is suddenly destroyed(leaving the labor force unchanged). The inflation rate from 2017 to 2018 was. The following table contains information on the economy's money supply, velocity of money, price level, and output. B. What is the opportunity cost of apples? For example, in 2018, the money supply was $320, the price of a pie was $8.00, and the economy produced 600 pies. The table below provides information about an open economy with a public sector. 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. Which of the following do we subtract from GDP to obtain national income? _______ per year. The government places a modest minimum wage on this industry above the market clearing equilibrium wage. \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. Not copy pasted answer from google. Make sure to label both axis and include a dot on the curve that represents our state of economy. What benefits do cottage industries provide to local populations? Draw the short run Phillips curve and relate it to our economy today. 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. The price of a unit of beef = $19 and the price of a unit of soy = $14. c) how many workers to hire. Get access to this video and our entire Q&A library, What Is Inflation Rate? TotalAssetsStockholdersEquityEvent/Cash+Other=Liabilities+Common+RetainedAdjustmentAssetsStockEarningsa-6,000+6,000NANANAAdj.NA-4,500NANA-4,500. There are three productive factors. The realization of these economies of scale, however, is far, Consider a simple economy that produces two goods: pens and oranges. Fill in the missing values. You will pay $10,000 for labor costs and $12,000 for capital costs. 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 . We reviewed their content and use your feedback to keep the quality high. {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. Answered: Velocity and the quantity equation | bartleby 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. 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. 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. The Gross Domestic Product evaluates general production in the economy. The following table contains information on the economy's money supply, velocity of money, price level, and output. In 2015, the economy produces 1,000 tonnes of apples, 2,000 tonnes of oranges, and 3,000 tonnes of bananas. Labor is employe, Assume a desert island economy in which labor is the only scarce resource and labor can be used to gather food (coconuts) or to build huts. a. What is the base year for this particular set of CPI data? What is the per-worker production function? All numbers are in millions of dollars. Use the information in the following table to calculate Nominal Gross Domestic Product (Nominal GDP) for 2015. 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). The total costs C of a firm is: C = 4K + L. a. Points: 1 / 1 Close Explanation 4. Question: Consider a simple economy that produces only cell phones. 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. Few foreign citizens currently work in the U.S. and few foreign firms maintain facilities in the U.S. 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 nominal interest rate on the bonds adjusts automatically to account for the inflation rate. The total value added of the artist is $3000. Pineapples 50,000,000 lbs. which of the following are likely to increase the measured level of GDP and which are likely to reduce it? The following table contains information on the economy's money supply, velocity of money, price level, and output. Show more. 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. 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. Further, assume that all of the cotton is used in the production of shirts. \end{array} Consider a simple economy that produces only pens. The following table Consider two products, cloth and machines. \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}\\ Price \ of \ cell \ phones \ (2012) \ = \ \$7.56 Consider the following model of a simple economy: The economy is in a recession with high unemployment and low output. copyright 2003-2023 Homework.Study.com. The country has a constant technology, population and capital stock (in other words, real GDP is constant throughout). The short-run average variable cost is a. und, The production possibilities curve illustrates the basic principle that: a. the production of more of any one good will, in time, require smaller and smaller sacrifices of other goods. \\ Consider a simple economy that produces two goods: apples and envelopes Table: Inflation Rate (%); Real Interest Rate (%); Nominal Interest Rate (%); After-Tax Nominal Interest Rate (%); After-Tax Real Interest Rate (%) Consider a simple economy that produces only cell phones. 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. 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 two products, cloth and machines. 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. b. Use the national income accounting identities to calculate, __________ (66.00/3,780.00/69.00/3600.00). |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. 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. 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). Suppose the base year is 2001. Figures are in billions of dollars. Velocity and the quantity equation Consider a simple economy that Suppose that the present equilibrium price level and level of real GDP are 100 and $215 and that data set A represents the relevant aggregate supply schedule, Refer to the information provided in the table below to answer the question that follow : Assume that this economy produces only two goods X and Y. Velocity and the quantity equation Consider a simple economy that produces only pens. The equation of exchange Consider a simple economy that produces only B. all things are produced by the people of the lowest wage rate. explain why real domestic output and the price level are directly related. 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. The following table contains information on the economy's money supply, velocity of money, price level, and output. Assume that this economy is currently at point "C". 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. Velocity and the quantity equation Consider a simple economy that produces only pies. 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 government taxes nominal interest income at a rate of 10%. a. 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. 4. Velocity and the quantity equation 4. Velocity an.docx Money \ supply \ grew \ = \ 0.05 \ or \ 5\% Indirect Business Taxes 40 The following table contains information on the economy's money supply, velocity of money, price level, and output. For example, in 2019, the money supply was $280, the price of a pie was $7.00, and the economy produced 600 pies. Although short-term interest rates have historically averaged less than long-term rates, the heavy use of short-term debt is considered to be an aggressive strategy because of the inherent risks associated with using short-term financing. Suppose you have the following disposable income and consumption data for an economy, as shown in the table below. Suppose that Home has 100 workers, a marginal product of 4 making apples, and a marginal product of labor of 4 making shirts. 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. Each sector employs capital and labor and its production function exhibits constant returns to scale and, 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. If both output and prices are falling, then both real GDP and nominal GDP will fall. 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. (b) Graph the short-run marginal and average product curves. 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. The following table contains information on the economy's money supply, velocity of money, price level, and output. Learn about the inflation rate. a. Graph Home's PPF, with apples in the horizontal axis, b. Velocity and the quantity equation Consider a simple economy that produces only pens. If Americans still worked 60-hour weeks, as they did in 1890. B. B. a decrease in the number of smartphone manufacturers. D. all of the above, Consider the following short run production function. Calculate the amount for consumption. Select one: a. Decr. 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. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. A. diseconomies of scale; expanding B. economies of scale; contracting C. diseconomies of scale, Suppose a firm's production function is given by Q= L^1/2 * K^1/2.The marginal product of labor and the marginal product of capital is given by: MPL= K^1/2 /2L^1/2 and MPk= L^1/2/2K^ 1/2. For example, in 2011, t, a. For example, in 2014, the money supply was $240, the price of a pen was $7.20, and the economy produced 500 pens. b.not change GDP, it changes the category under which the spending is counted. Since cell ph Change in the money supply was reflected partially did not change from 2017 to 2018 and the velocity of in changes in the price level.
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