Answered: How is it possible for households to…

How is it possible for households to have a negative savings rate and what has caused this negative household savings rate? Is this negative household savings rate sustainable in the long run?

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter8: Production And Costs

Section: Chapter Questions

Problem 13QP

See similar textbooks

Related questions

Q: For an increase in output, average costs change by more in the short-run than in the long run, but…

A: Meaning of Cost: The term cost refers to the situation under which a firm occurs various expenses…

Q: If the law of diminishing returns did not hold, we can produce a the food the world needs in one…

A: In economics, diminishing returns is the decrease in marginal output of a production process as the…

Q: Complete the following table and answer the short discussion question. Average Cost (AC) Average…

A: In economics, TFC is the cost incurred when the output production is zero; therefore, here, TFC is…

Q: What is relationship between MP and AP? Explain why MP first rises, then declines and ultimately…

A: The given table has been completed and the corresponding graphs of (MP and AP) have also been…

Q: If the per unit price of labor, a variable resource, increases, it causes which of the following? A.…

A: Per unit price of labor is termed as wages. An increase in wages will shift the total variable cost…

Q: Alice runs a shoemaking factory that utilizes both labor and capital to make shoes. Which of the…

A: If the other factors other than the price of capital or interest rate changes, the demand for…

Q: Why it is important for managers to be able to identify which costs are fixed, which are variable,…

A: Fixed costs are the costs that are fixed and constant.These costs do not change in the short amount…

Q: Barney decides to quit his job as a corporate accountant, which pays $12,000 a month, and goes into…

A: Costs are the expenses that firms incur in the production of goods and services. A firm can incur…

Q: Edith is the owner and manager of a small coffee shop that employs three workers who use the shop’s…

A: Given, In the coffee shop, there are 3 workers and 1 coffee machine. If there is an increasing…

Q: How firm choose optimum combination of inputs in short run and long run explain theoritically and…

A: There are two type of period in economics which are short run and long run. In the short run, there…

Q: Perform these same calculations for 2018 and 2019, and enter the results in the following table.…

A: In an economy, the CSPI is calculated by dividing the current year's cost of basket to the cost of…

Q: Explain all resources that economic relies on.

A: Economic resources: - all resources used as an input in the production and distribution of goods and…

Q: short-run: select the graph that best demonstrates how both of the scenarios below will impact the…

A: Demand refers to the amount of good a consumer is willing to buy /consume for given price levels ,…

Q: Instructions: Click the buttons above the graphing window to show either production functions or…

A: Productivity in the following tables can be found out by dividing output by the number of workers.…

Q: What is the increase in output that results from an increase in all of a firm’s outputs by some…

A: The increase in output that results from an increase in all of a firm's output by some proportion…

Q: Edith is the owner and manager of a small coffee shop that employs three workers who use the shop’s…

A: When the variable factors of production-those whose count can be increased or decreased are employed…

Q: Explain the law of diminidhing returns whith a relevant example

Q: Dave's Donuts is a local donut shop. Dave is fortunate that his business is experiencing sales…

A: One of the key motives of the firms operating in a market is to maximize profits. Profit is the…

Q: hich of the following statements are true? A basic assumption of the theory of production is that:…

A: The process of the combination of various material and immaterial inputs into output for the purpose…

Q: How would this change in the long-run? Can you show the graph in the long-run too?

A: The long run is a long time which is enough for capital as a factor of production to be variable and…

Q: What is the macroeconomic variable in the Dairy Products industry?

A: Macroeconomics is the branch of economics that deals with the structure, performance, behaviour, and…

Q: The optimal level of production for any company is the level of production that either maximizes…

A: All firms will make the production where its marginal revenue (MR) equals to marginal cost (MC), to…

Q: 4.7 When to Use the Principle of Diminishing Returns? You are the manager of a firm that produces…

A: Return to Scale: The return to scale refers to the behavior of output when there is a change in all…

Q: Your product sells for $5 per unit, labor costs $5 per unit, and the rental price of capital is $20…

A: Capital and labor are the two inputs used in the production of goods and services. These are also…

Q: For an increase in output, average costs change by more in the short run than in the long run, but…

A: Average Price The total cost is divided by the number of things produced to get the average cost.…

Q: In a self-regulating economy “X”, labor supply is 40 million but labor demand is 10 million. What…

A: Given: Labor supply is 40 million and labor demand is 10 million.

Q: Dina is working for a consulting firm making $60,000 per year but considers starting her own…

A: Implicit cost refers to the cost which is incurred but can not be seen. It is the opportunity cost…

Q: he Chief Executive Officer of Dar Al Herfya (World of Handicrafts) spends her days contacting…

A: Zuwaina is an entrepreneur based in Oman who left a corporate desk job to venture out on her own.

Q: If Home’s relative productivity in cheese is higher than it is in wine, what does it imply? Explain.

A: The amount of output divided by the volume of inputs is generally referred to as productivity. In…

Q: For an increase in output, average costs change by more in the short-run than in the long-run, but…

A: find below the answer.

Q: In the short run, if the price of the fixed factor is increased, what will happen to profits?

A: Fixed Factor:- These are those factor which do not change with change in output, in short-run. In…

Q: Your product sells for $5 per unit, labor costs $5 per unit, and the rental price of capital is $20…

Q: According to data from the Longitudinal Survey of Companies of 2017, labor productivity in Chile is…

A: Disclaimer: Since you have asked multiple questions, we will solve the first question for you. if…

Q: The Principle of Diminishing Returns Apply the principle of diminishing returns. 4.1 Consider the…

A: The Law of diminishing return, also known as the Law of variable proportion, operates in the short…

Q: Which of the following is an implicit cost of production? 16: A) the utility bill paid to…

A: please find the answer below.

Q: mazon sets a demanding pace on the job Adapted from: Byers, S.M. & Stanberry, K. (2018). Business…

A: The work pace is the speed at which you finish activities and perform other responsibilities.…

Q: . () Briefly explain the meaning of the dynamic stability of a system represented by a differential…

A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: In a short run, when you are producing pair of shoes, a leather Is under what cost? a. variable cost…

Q: Hammas Dadani operates a business and uses the following table for total output or total product as…

A: 1. Marginal Product of Labor (MPL) The marginal product of labor is the increase in total production…

Q: What are ways the profit arises in the changeable/dynamic word ? Comment

A: Answer: As we know that Idleness is defined as the state of being unable to do anything productive.…

Q: What are some examples to illustrate Henry Hazlitt's lesson that what is true in the short run may…

A: According to Henry Hazlitt's lesson: Actions that are advantageous in the short run can cause…

Q: Suppose there is a permanent increase in gL. What effect does this have on long-run output per…

A: Solow Growth Model is an exogenous model of economic growth which analyse the change in level of…

Q: For an increase in output, average costs change by more in the short run than in the long run, but…

A: Average cost is the total cost per unit of output. AC=TCQ

Q: We can describe inputs as either fixed or variable. Thinking about a company that assembles cars,…

A: In the production process, some of the resources are considered as fixed while others are variable…

Concept explainers

Public Saving

Public saving deals with the amount which has been in excess after meeting all the obligatory expenses and investment of the government. Taxes are collected by the government to meet its day-to-day expenditures. The obligatory expenses include all those expenses which are mandatory for the government. It cannot be avoided as it is inevitable.

Question

How is it possible for households to have a negative savings rate and what has caused this negative household savings rate? Is this negative household savings rate sustainable in the long run?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1. Savings

VIEW

Step 2. Negative Savings

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

What is the difference between a feasible production plan in the short run and in the long run? Give an example of a real product and the major inputs necessary to produce the product and then a short run and long run production plan.
What is the difference between interest and profit? Who earns interest, in return for what contribution to production? Who earns economic profit, in return for what contribution to production?
Imagine Tom's annual salary as an assistant store manager is $30,000, he owns a building that rents for $10,000 yearly, and his financial assets generate $1,000 per year in interest. One day, after deciding to be his own boss, he quits his job, evicts his tenants, and uses his financial assets to establish a bicycle repair shop. To run the business, he outlays $15,000 in cash to cover all the costs involved with running the business, and earns revenues of $50,000. Which of the following statements is true? Tom earns an accounting profit of $35,000. Tom has an opportunity cost of $41,000. All of these are true. Tom experiences an economic loss of $6000.
Define the statement. Whether correct or incorrect. The production of a firm is diminishing due to the poor technology. This is macroeconomic issue.
hello, I need help with my homework 4.7 When to Use the Principle of Diminishing Returns? You are the manager of a firm that produces memory chips for mobile phones. In your decision about how much output to produce this week, would you use the principle of diminishing returns? Explain. In your decision about how much output to produce two years from now, would you use the principle of diminishing returns? Explain. My Textbook: macroeconomics by o’Sullivan 10th addition 978 013 519 6434 thank you
Give typing answer with explanation and conclusion You have opened your own word-processing service. You bought a personal computer, and paid $5,000 for it. However, due to the cost changes in the computer industry, the current price of an equivalent machine is $2,500. You could sell any used machine for $1,000. If you were not word processing, you could earn $20,000 per year at an alternative job. Assume that the interest rate is 10%. You can also hire an assistant who can do everything that you can do for $20,000 per year (you would still continue to do word processing). One person using one computer can produce 11,000 typed pages per year, and the price per page for your service is $2. You are considering three options: (A) expand your business by hiring an assistant; (B) leave your business the way it is; (C) shut down. Fill in the Blank For Option B, economic profit is $_______.
What are some factors of production which are important for any firm to produce goods. These factors have their own identities and respective earnings which the firm keeps in consideration while proceeding for the production process.
In a 150-word minimum reply, define the Law of Diminishing Returns. Locate a recent news article related to this topic and discuss how this law is related to it. Schiller, B. R., & Gebhardt, K. (2016). The economy today (14th ed.). Columbus, OH: McGraw-Hill Higher Education
Why it is important for managers to be able to identify which costs are fixed, which are variable, and which are sunk? Explain.
In a short run, when you are producing pair of shoes, a leather Is under what cost? a. variable cost b. raw material c. composite cost d. fix cost When we try to analyze household income, its real value and nominal value, this is scope Cinder a. Microeconomics b. Macroeconomics c. Social Science d. Political Science When Average cost is higher than brice, this results to a. loss b. profit c. break even d. equilibrium
The optimal level of production for any company is the level of production that either maximizes profits or minimizes losses. How does one determine the optimal level of production for any business? Explain.
What causes costs of production to vary with output in the short run? What generally causes costs of production to vary in the long run?