Show more Business Economics Answer & Explanation Solved by verified expert Is the value of intermediate goods and services produced during the year included in Gross Domestic Product (GDP)? Explain your graph. The production function is: f(K,L) = K^1/3 L^1/3. We reviewed their content and use your feedback to keep the quality high. _______ per year. 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. Suppose half the capital stock is suddenly destroyed(leaving the labor force unchanged). 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. Table: Inflation Rate (%); Real Interest Rate (%); Nominal Interest Rate (%); After-Tax Nominal Interest Rate (%); After-Tax Real Interest Rate (%) decrease 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. Question: 5. The value of leisure is not included in GDP. The contract required a one-year commitment starting September 1. B. Decreasing Suppose an economy that is initially at full employment faces a substantial increase in factor cost of production. Suppose we have a small economy that produces only two goods 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. Think about the following news item. The following table contains information on the economy's money supply, velocity of money, price level, and output. Would the difference between the real GDP per capita in 1890 and the real GDP per capita today understate or overstate the difference in the population's economic well-being? Consider two products, cloth and machines. Further, assume that all of the cotton is used in the production of shirts. The following table contains information on the economy's money supply, velocity of money, price level, and output. The total value added of the artist is $3000. Personal income (PI) equals $11210 billion. How. Velocity and the quantity equation Consider a simple economy that produces only cell phones. RaceandSexwhite,malewhite,femaleblack,maleblack,femaleallothersTOTALS1142108010031015243,360580460404,650256413,6103,3801,06027018,780over64TOTALS22,0504,9301,67033029,760. Derive the current-year-quantity price index. Numerically. 2009 Q x 2000 P = Value 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. 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. how the actual output will deviate from potential output. What is t, Both Kate and John own saltwater taffy factories. Indirect Business Taxes 40 Then, average total cost (ATC) is A) 25 cents per unit and average fixed cost (AFC) is 15 cents per unit. Assume the following production possibilities data are for a small country off the coast of South America. b) What is the optimal ratio of c, When an economy is on the flat portion of its AS curve: A. small changes in the price level have little or no effect on the amount of production in the economy. 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. GDP is not adjusted for pollution and it does not account for unequal income distribution. The equilibrium condition is Y = C+ I 2. The Nominal GDP for the year 2015 is $7450. Suppose in the short run a firm's production function is given by Q = L1/2K1/2, and K is fixed at K = 36. This tends to ______ saving, thereby ______ the quantity of investment in the economy and ______ the economy's long-run growth rate. Nominal GDP can increase if output falls and prices rise. Pineapples 50,000,000 lbs. \\ 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. [Solved] Consider a simple economy that produces o | SolutionInn a) The GDP of this country would be $150 million. C. Whe, Suppose that a firm has a production function given by: q= 10 L^{0.4}K^{0.6}. explain why real domestic output and the price level are directly related. 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. 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. \hspace{17pt}\text{Adj.} Assume that K is fixed at 10 in the short run. 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. The following table contains information on the economy's money supply, velocity of money, price level, and output. Fill in the missing values in the following . 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. Find a new equilibrium. The following table shows the prices and quantities of the goods over a three-year period. Gross National Product (GNP) differs from U.S. Fill in the missing values in the folowing table, Consider a simple economy that produces only cell phones. Consider a simple economy that produces only cell phones. GDP = (50,000,000 * 1) + (10 * 10,000,000) = $150,000,000. ?1.) In an economy with rising prices, compared to the base year. At the equilibrium real wage RW0, the country's labor force works L0 hours and produc, Consider an economy described as follows: a. Compute private saving, public saving, and national saving. In the short run, the firm has 16 units of capital. The following table contains information on the economy's money supply, velocity of money,. Here are the quantities produced and the prices for pineapples and commercial airplanes. Suppose a production function is q = K^(1/2)L^(1/3) and in the short run capital (K) is fixed at 100. 0.650. Use a solow diagram to explain how the economy behaves ov. The market wage rate w=1 and price of capital r=4. For example, in 2011, the money supply was $320, the price of a cell phone was $8.00, and the economy produced 600 cell phones. . a. If th, Suppose that this year's velocity is 10, nominal GDP (PY) is $50 billion, and real GDP (Y) IS $10 billion. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. 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. The economy has two sectors-cloth and food. The money supply grew at a rate of from 2014 to 2015. 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. b) the size of its factories. B) $4 per unit, and average fixed cost (AFC) is, A firm has the production function q = 0.2LK + 5L^2K - 0.1L^3K. C. maximizing the returns to factors of production. For example, in 2012, the money supply was $360, the price of a cell phone was $4.50, and the economy produced 800 cell . Ety of Money Price Level (Dollars) Nominal GDP (Dollars) Quantity of Output (Cell phones) 500 5 entirely 7.20 15 from 2017 to 2018. If nominal GDP declined between 2008 and 2009, then the the GDP deflator must also have declined. (Part A) You know that you are operating in a monopolistically competitive market, that is, you are a small part. (a) Graph the short-run total product curve. 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. The inflation rate from 2017 to 2018 was. {eq}Velocity \ of \ money \ (2011) \ = \ \dfrac{GDP}{Money \ supply} The following table contains information on the economy's money supply, velocity of money, price level, and output. 1. |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 costs are $200 and the wage, Suppose that a firm's production function is given by q = 20E^{0.50}. GDP would be much higher than it is, but the well-being of the typical person would not necessarily be higher. 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. a) The GDP of this country would be $ million. 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. If both output and prices are falling, then both real GDP and nominal GDP will fall. 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. 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. Wages=3, Rental rates=6, Price of product = $10 a) In the short run, capital is fixed at 5. Be su. If the GDP deflator in 2012 has a value of 98.0, then. The following table contains information on the economy's money supply, velocity of money, price level, and output. 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. \hline \text { all others } & & & & & \\ Suppose we have a small economy that produces only two goods: pineapples and commercial airplanes. 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. Product Quantity Price Per Unit The art dealer then sold all of the sculptures to art collectors for an average of $1,200 each. Consider a simple economy that produces only pies. Our experts can answer your tough homework and study questions.