Stocks and flows

Question

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Answer 1

Question

Chapter 15, Problem 1RQ

To determine

Stocks and flows

Expert Solution & Answer

Explanation of Solution

The inputs such as cloth and labor can be measured as flow variables. The factory is a stock variable, since it is owned or bought. Even if the firm had leased the factory, it continues to be a stock, since it is owned by someone else other than the firm. When the capital stock is owned by the firm, there is depreciation of stock during a given time period making it a flow variable. Just like depreciation, the rent is a flow variable because when the factory is in lease, then the rent has to be paid during a given period of time. The output is measured as a flow, since it is measured over a time period. The profit is also a flow as it is measured as the difference between the total revenue and total cost which are measured over a particular time period.

Economics Concept Introduction

Stock: Stock indicates a quantity of variable at a particular point of time.

Flow: Flow variable shows a change in variable over a period of time.

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Answer 2

Question

Chapter 15, Problem 1RQ

To determine

Stocks and flows

Expert Solution & Answer

Explanation of Solution

The inputs such as cloth and labor can be measured as flow variables. The factory is a stock variable, since it is owned or bought. Even if the firm had leased the factory, it continues to be a stock, since it is owned by someone else other than the firm. When the capital stock is owned by the firm, there is depreciation of stock during a given time period making it a flow variable. Just like depreciation, the rent is a flow variable because when the factory is in lease, then the rent has to be paid during a given period of time. The output is measured as a flow, since it is measured over a time period. The profit is also a flow as it is measured as the difference between the total revenue and total cost which are measured over a particular time period.

Economics Concept Introduction

Stock: Stock indicates a quantity of variable at a particular point of time.

Flow: Flow variable shows a change in variable over a period of time.

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Answer 3

Question

Chapter 15, Problem 1RQ

To determine

Stocks and flows

Expert Solution & Answer

Explanation of Solution

The inputs such as cloth and labor can be measured as flow variables. The factory is a stock variable, since it is owned or bought. Even if the firm had leased the factory, it continues to be a stock, since it is owned by someone else other than the firm. When the capital stock is owned by the firm, there is depreciation of stock during a given time period making it a flow variable. Just like depreciation, the rent is a flow variable because when the factory is in lease, then the rent has to be paid during a given period of time. The output is measured as a flow, since it is measured over a time period. The profit is also a flow as it is measured as the difference between the total revenue and total cost which are measured over a particular time period.

Economics Concept Introduction

Stock: Stock indicates a quantity of variable at a particular point of time.

Flow: Flow variable shows a change in variable over a period of time.

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Answer 4

Question

Chapter 15, Problem 1RQ

To determine

Stocks and flows

Expert Solution & Answer

Explanation of Solution

The inputs such as cloth and labor can be measured as flow variables. The factory is a stock variable, since it is owned or bought. Even if the firm had leased the factory, it continues to be a stock, since it is owned by someone else other than the firm. When the capital stock is owned by the firm, there is depreciation of stock during a given time period making it a flow variable. Just like depreciation, the rent is a flow variable because when the factory is in lease, then the rent has to be paid during a given period of time. The output is measured as a flow, since it is measured over a time period. The profit is also a flow as it is measured as the difference between the total revenue and total cost which are measured over a particular time period.

Economics Concept Introduction

Stock: Stock indicates a quantity of variable at a particular point of time.

Flow: Flow variable shows a change in variable over a period of time.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 15, Problem 1RQ

To determine

Stocks and flows

Expert Solution & Answer

Explanation of Solution

The inputs such as cloth and labor can be measured as flow variables. The factory is a stock variable, since it is owned or bought. Even if the firm had leased the factory, it continues to be a stock, since it is owned by someone else other than the firm. When the capital stock is owned by the firm, there is depreciation of stock during a given time period making it a flow variable. Just like depreciation, the rent is a flow variable because when the factory is in lease, then the rent has to be paid during a given period of time. The output is measured as a flow, since it is measured over a time period. The profit is also a flow as it is measured as the difference between the total revenue and total cost which are measured over a particular time period.

Economics Concept Introduction

Stock: Stock indicates a quantity of variable at a particular point of time.

Flow: Flow variable shows a change in variable over a period of time.

Answer 6

Chapter 15, Problem 1RQ

To determine

Stocks and flows

Expert Solution & Answer

Explanation of Solution

The inputs such as cloth and labor can be measured as flow variables. The factory is a stock variable, since it is owned or bought. Even if the firm had leased the factory, it continues to be a stock, since it is owned by someone else other than the firm. When the capital stock is owned by the firm, there is depreciation of stock during a given time period making it a flow variable. Just like depreciation, the rent is a flow variable because when the factory is in lease, then the rent has to be paid during a given period of time. The output is measured as a flow, since it is measured over a time period. The profit is also a flow as it is measured as the difference between the total revenue and total cost which are measured over a particular time period.

Economics Concept Introduction

Stock: Stock indicates a quantity of variable at a particular point of time.

Flow: Flow variable shows a change in variable over a period of time.

Answer 7

Chapter 15, Problem 1RQ

To determine

Stocks and flows

Answer 8

Expert Solution & Answer

Explanation of Solution

The inputs such as cloth and labor can be measured as flow variables. The factory is a stock variable, since it is owned or bought. Even if the firm had leased the factory, it continues to be a stock, since it is owned by someone else other than the firm. When the capital stock is owned by the firm, there is depreciation of stock during a given time period making it a flow variable. Just like depreciation, the rent is a flow variable because when the factory is in lease, then the rent has to be paid during a given period of time. The output is measured as a flow, since it is measured over a time period. The profit is also a flow as it is measured as the difference between the total revenue and total cost which are measured over a particular time period.