The total price for purchasing a concrete block making plant is (10) million Iraqi dinars. The price of one in the market is (100) Iraqi dinars, and the cost of maintenance and labor wages is (75) dinars, including the cost of raw materials per block, find with the detailed explanation:
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- The CPI index is calculated for consumers with the Cobb-Douglas utility function u(x,y)= xy2 over goods food (x) and clothing (y), where the reference basket is A = (10,20) , that is 10 units of food and 20 units of clothing. The initial prices are px = py = 1 and the final prices are px = 2, py = 16. (a) Calculate the CPI (consumer price index) which is the ratio of the cost of the basket A under the final prices divided by its cost under the initial prices. (b) Naturally, given the prices increase disproportionately, we can expect the consumer not to stick with the basket A but choose another basket B where she achieves the same utility level as in A, but which costs much cheaper, under the final prices. Calculate the basket B which is the cheapest bundle under the final prices to achieve the utility level of A. Calculate the effective CPI, which is the cost of basket B under the final prices divided by the cost of A under the initial prices. This reflects the real increase in…As shown in the figure, the total cost of producing 100 units of output per day is. Single choice.a. $250.b. $500.c. $750.d. $1,000.When the inflation rate rises, the purchasing power of nominal income. Single choice.a. remains unchanged.b. decreases.c. increases.d.changes by the inflation rate minus one.Which is a barrier to entry?. Single choice.a. patentsb. revenue maximizationc. profit maximizationd. elastic product demandInflation is. Single choicea. an increase in the general price level.b. not a concern during war.c. a result of high unemployment.d. an increase in the relative price level.The economic incentive for price discrimination depends on:. Single choice.a. prejudices of business managers.b. differences among sellers' costs.c. a desire to evade antitrust legislation.d. differences among buyers' demand elasticities.Suppose Latasha is a cinephile and buys only movie tickets. Latasha deposits $3,000 in a bank account that pays an annual nominal interest rate of 5%. Assume this interest rate is fixed—that is, it won't change over time. At the time of her deposit, a movie ticket is priced at $10.00. Initially, the purchasing power of Latasha's $3,000 deposit is_______ movie tickets. For each of the annual inflation rates given in the following table, first determine the new price of a movie ticket, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Latasha's deposit after one year in the first row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflation rates. Hint: Round your answers in the first row down to the nearest movie ticket. For example, if you find that the deposit will cover 20.7 movie tickets, you would round the purchasing power down to 20 movie tickets under the…
- CPI inflation in India rose to 4.9% y-o-y in November from 4.5% in October, below expectations (5.1%), with a downside surprise in food and fuel price inflation, but core inflation rose further to 6.1% from 5.9%, signalling rising underlying price pressures. The cut in excise duties on fuel was offset by higher price increases in personal care, clothing, recreation and households goods and services in the CPI basket, suggesting pressures due to rising input cost pass-through and reopening. In this context, suppose people in India anticipate an increase in the expected price level. a) Determine whether the event shifts aggregate demand (AD) or aggregate supply (AS). b) Use the AD-AS model to determine the short-run and long-run effects on India’s GDP, price level, and unemployment.CPI inflation in India rose to 4.9% y-o-y in November from 4.5% in October, below expectations (5.1%), with a downside surprise in food and fuel price inflation, but core inflation rose further to 6.1% from 5.9%, signalling rising underlying price pressures. The cut in excise duties on fuel was offset by higher price increases in personal care, clothing, recreation and households goods and services in the CPI basket, suggesting pressures due to rising input cost pass-through and reopening. Source: Economic Times (2021) In this context, suppose people in India anticipate an increase in the expected price level. a) Determine whether the event shifts aggregate demand (AD) or aggregate supply (AS). b) Use the AD-AS model to determine the short-run and long-run effects on India’s GDP, price level, and unemployment.CPI inflation in India rose to 4.9% y-o-y in November from 4.5% in October, below expectations (5.1%), with a downside surprise in food and fuel price inflation, but core inflation rose further to 6.1% from 5.9%, signalling rising underlying price pressures. The cut in excise duties on fuel was offset by higher price increases in personal care, clothing, recreation and households goods and services in the CPI basket, suggesting pressures due to rising input cost pass-through and reopening. Source: Economic Times (2021) In this context, suppose people in India anticipate an increase in the expected price level. a) Determine whether the event shifts aggregate demand (AD) or aggregate supply (AS). (6 marks) b) Use the AD-AS model to determine the short-run and long-run effects on India’s GDP, price level, and unemployment.
- Interest, inflation, and purchasing power Suppose Dalia is a fan of young-adult fiction and buys only young-adult books. Dalia deposits $2,000 into a savings account that pays an annual nominal interest rate of 20%. Assume this interest rate is fixed, and so it will not change over time. On the day she makes her deposit, suppose that a young-adult book has a price of $20.00. Initially, Dalia's $2,000 deposit has a purchasing power of #????? young-adult books. For each of the annual inflation rates given in the following table, first determine the new price of a young-adult book, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Dalia's deposit after one year in the first row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflation rates. Hint: Round your answers in the first row down to the nearest young-adult book. For example, if you find that the deposit will cover…Suppose Dina is an avid reader and buys only comic books. Dina deposits $3,000 in a bank account that pays an annual nominal interest rate of 5%. Assume this interest rate is fixed—that is, it won't change over time. At the time of her deposit, a comic book is priced at $10.00. Initially, the purchasing power of Dina's $3,000 deposit is comic books. For each of the annual inflation rates given in the following table, first determine the new price of a comic book, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Dina's deposit after one year in the first row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflation rates. Hint: Round your answers in the first row down to the nearest comic book. For example, if you find that the deposit will cover 20.7 comic books, you would round the purchasing power down to 20 comic books under the assumption that Dina will not buy…Suppose Neha is a sports fan and buys only baseball caps. Neha deposits $3,000 in a bank account that pays an annual nominal interest rate of 5%. Assume this interest rate is fixed—that is, it won't change over time. At the time of her deposit, a baseball cap is priced at $10.00. Initially, the purchasing power of Neha's $3,000 deposit is$______________baseball caps. For each of the annual inflation rates given in the following table, first determine the new price of a baseball cap, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Neha's deposit after one year in the first row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflation rates. Hint: Round your answers in the first row down to the nearest baseball cap. For example, if you find that the deposit will cover 20.7 baseball caps, you would round the purchasing power down to 20 baseball caps under the assumption that…
- Suppose Cho is a cinephile and buys only movie tickets. Cho deposits $3,000 in a bank account that pays an annual nominal interest rate of 10%. Assume this interest rate is fixed—that is, it won't change over time. At the time of her deposit, a movie ticket is priced at $15.00. For each of the annual inflation rates given in the following table, first determine the new price of a movie ticket, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Cho's deposit after one year in the first row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflation rates. Hint: Round your answers in the first row down to the nearest movie ticket. For example, if you find that the deposit will cover 20.7 movie tickets, you would round the purchasing power down to 20 movie tickets under the assumption that Cho will not buy seven-tenths of a movie ticket. Number of tickets Cho can purchase options:…Suppose Cho is a cinephile and buys only movie tickets. Cho deposits $3,000 in a bank account that pays an annual nominal interest rate of 10%. Assume this interest rate is fixed—that is, it won't change over time. At the time of her deposit, a movie ticket is priced at $15.00. For each of the annual inflation rates given in the following table, first determine the new price of a movie ticket, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Cho's deposit after one year in the first row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflation rates. Hint: Round your answers in the first row down to the nearest movie ticket. For example, if you find that the deposit will cover 20.7 movie tickets, you would round the purchasing power down to 20 movie tickets under the assumption that Cho will not buy seven-tenths of a movie ticket. Fill in the annual inflation chart Choices…Interest, inflation, and purchasing power Suppose Diamond is a fashionista and buys only denim jackets. Diamond deposits $4,000 into a savings account that pays an annual nominal interest rate of 5%. Assume this interest rate is fixed, and so it will not change over time. On the day she makes her deposit, suppose that a denim jacket has a price of $20.00. Initially, Diamond's $4,000 deposit has a purchasing power of #________ denim jackets. For each of the annual inflation rates given in the following table, first determine the new price of a denim jacket, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Diamond's deposit after one year in the first row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflation rates. Hint: Round your answers in the first row down to the nearest denim jacket. For example, if you find that the deposit will cover 20.7 denim jackets, you…