Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Chapter 10, Problem 14APA
Technological and Economic Efficiency
Use the following data to work Problems 13 and 14. Four methods of completing a tax return and the time taken by each method are with a PC, 1 hour; with a pocket calculator, 12 hours; with a pocket calculator and paper and pencil, 12 hours; and with a pencil and paper, 16 hours. The PC and its software cost $1,000, the pocket calculator costs $10, and the pencil and paper cost $1.
14. Which method is economically efficient if the wage rate is (i) $5 an hour, (ii) $50 an hour, and (iii) $500 an hour?
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Your mother owns and runs an arts and craft store, and the business is doing well. She would have otherwise been employed as a high school geography teacher making $80,000 a year or as an interior decorator making $68,000 a year. She owns the building in which her shop is located, which she could have rented out for $24,000 a year. Her annual revenue from the shop is $430,000 and she employs four workers, each of whom earns $30,000 a year. On average, she spends $206,000 per year traveling, purchasing, and shipping unique merchandise for resale at her store. Based on this information, do you think you should encourage her to return to teaching? Explain your advice with the help of calculations on her opportunity costs, accounting profit, and economic profit.
5. Calculating changes in price level Quantity in Basket 2006 2007 2008 Price Cost of Basket Price Cost of Basket Price Cost of Basket Notebooks 15 $2 $30 $5 $75 $8 $120 Calculators 1 $70 $70 $100 $100 $130 $130 Large coffees 250 $2 $500 $2 $500 $2 $500 Highly caffeinated colas 50 $2 $100 $4 $200 $6 $300 Textbooks 10 $120 $1,200 $150 $1500 $180 $1800 Total cost $1,900 $2,375 $2,850 Price index The total cost of a market basket of goods increased by % from 2006 to 2007, and by % from 2006 to 2008. Use this information to determine the value of the price index in each year (using 2006 as the base year) and enter these values into the preceding table.
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Since most consumers spend very little on salt, a small increase in the price of salt will:A. reduce quantity demanded by a large amountB. not reduce quantity demanded by very muchC. not change quantity demandedD. increase quantity demanded by a small amount
2.Fred is considering opening a ski shop in Colorado. Assume Fred will incur the following costs: building rent= $100000/year, inventory= $250000/ year, energy=$50000/year, and labor (one clerk) = $10000/year. In addition, Fred’s current income as a computer programmer is $40000 per year. Assuming Fred would earn $ 460000 in revenues, he could expect to earn:A. an accounting profit of $10000 per yearB. an accounting profit of $ 60000 per yearC. an economic profit of $ 10000 per yearD. an economic profit of $50000 per year
3.Suppose a firm employs only capital and labour (K and L) and its production function is Q = 2KL. If the quantities of labour and capital are fixed at K =10 and L = 25, then:A. total output cannot exceed 125B.…
Chapter 10 Solutions
Macroeconomics
Ch. 10.1 - Prob. 1RQCh. 10.1 - Prob. 2RQCh. 10.1 - Prob. 3RQCh. 10.1 - Prob. 4RQCh. 10.1 - Prob. 5RQCh. 10.2 - Prob. 1RQCh. 10.2 - Prob. 2RQCh. 10.2 - Prob. 3RQCh. 10.2 - Prob. 4RQCh. 10.3 - Prob. 1RQ
Ch. 10.3 - Prob. 2RQCh. 10.3 - Prob. 3RQCh. 10.4 - Prob. 1RQCh. 10.4 - Prob. 2RQCh. 10.4 - Prob. 3RQCh. 10.4 - Prob. 4RQCh. 10.5 - Prob. 1RQCh. 10.5 - Prob. 2RQCh. 10.5 - Prob. 3RQCh. 10 - Prob. 1SPACh. 10 - Prob. 2SPACh. 10 - Prob. 3SPACh. 10 - Prob. 4SPACh. 10 - Prob. 5SPACh. 10 - Prob. 6SPACh. 10 - Prob. 7SPACh. 10 - Prob. 8APACh. 10 - Prob. 9APACh. 10 - Prob. 10APACh. 10 - Prob. 11APACh. 10 - Prob. 12APACh. 10 - Prob. 13APACh. 10 - Technological and Economic Efficiency Use the...Ch. 10 - Prob. 15APACh. 10 - Prob. 16APACh. 10 - Prob. 17APACh. 10 - Prob. 18APACh. 10 - Prob. 19APACh. 10 - Prob. 20APACh. 10 - Prob. 21APACh. 10 - Prob. 22APACh. 10 - Prob. 23APA
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