EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 17, Problem 3DQ
To determine
Resource consumption and improved technology.
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With current technology, suppose a firm is producing 400 loaves of banana bread daily. Also, assume that the least-cost combination of resources in producing those loaves is 5 units of labor, 7 units of land, 2 units of capital, and 1 unit of entrepreneurial ability, selling at prices of $40, $60, $60, and $20, respectively. If the firm can sell these 400 loaves at $2 per unit, will it continue to produce banana bread? If this firm’s situation is typical for the other makers of banana bread, will resources flow to or away from this bakery good?
With current technology, suppose a fifirm is producing 400 loaves of banana bread daily. Also assume that the least-cost combination of resources in producing those loaves is 5 units of labor, 7 units of land, 2 units of capital, and 1 unit of entrepreneurial ability, selling at prices of $40, $60, $60, and $20, respectively. If the fifirm can sell these 400 loaves at $2 per unit, will it continue to produce banana bread? If this fifirm’s situation is typical for the other makers of banana bread, will resources flow to or away from this bakery good?
If a country starts with per capita real GDP of $50 and grows at 4% a year; in 5 years it's per capita real GDP will be
O 1.5
O 1.22
O 2
O 1.4
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- The graph below shows production possibilities frontiers for Cornelius and David, two priests that aid the Mondoshawan race. David is Cornelius' apprentice, and they each spend their time either deciphering old prophecies or developing plans to save the world (which comes in handy later). Use this information to answer the following 3 questions. Plans 10 9 8 7 6 LO 5 4 3 2 1 8° Cornelius David 0 1 2 3 4 5 c. Both (a) and (b). d. Neither (a) nor (b). 6 7 8 b. 10 translations and 4 plans. C. 5 translations and 11 plans. d. 9 translations and 9 plans. 9 Translations 10 1. (Cornelius and David) Which of the following statements is true? a. Cornelius' opportunity cost of one translation is ½ of a plan. b. Cornelius' opportunity cost of one translation is less than David's opportunity cost of one translation. 2. (Cornelius and David) If David and Cornelius engage in trade, which of the following points is both feasible and efficient in production? a. 18 translations and 14 plans.arrow_forward3. The world was growing at a constant growth of 0.00007% rate between 100,000 BC and 1750AD. If birth rates per thousand averaged 35 during this period , what was the average death rate in equilibrium. (approximately) O 31 35 40 8. Which of the following statements is correct? A model is an exact representation of what goes on in the economy. Equilibrium in GDP growth rate is when the growth rate is zero. A model is an economic relationship that is only represented by mathematics. Equilibrium is a self-perpetuating situation that does not change, unless a force for change is introduced from the outside and alters the basic data describing the situation. 9. According to Malthus, which of the following are the not the causes of diminishing average product of labor? Environmental effects of over-cultivation (e.g. increased carbon emissions) Increase in population growth rate More labour is devoted to a fixed quantity of land. The new land brought into cultivation is of inferior quality…arrow_forward11.Explain how (if at all) each of the following events affects the location of a country’s production possibilities curve: LO5 a.The quality of education increases. b.The number of unemployed workers increases. c.A new technique improves the efficiency of extracting copper from ore. d.A devastating earthquake destroys numerous production facilities.arrow_forward
- Suppose there exist two imaginary countries, Yosemite and Sequoia. Their labor forces are each capable of supplying four million hours per day that can be used to produce pistachios, chinos, or some combination of the two. The following table shows the amount of pistachios or chinos that can be produced by one hour of labor. Country Yosemite Sequoia Pistachios (Pounds per hour of labor) 8 LO 5 Chinos (Pairs per hour of labor) 16 20arrow_forwardEconomics • With the following points of one input x and one output y, o Draw production possibility set satisfying free disposability o Draw production possibility set satisfying free disposability and convexity o Draw production possibility set satisfying free disposability, convexity, and constant returns to scale Data Input x output y Point A 3 Point B 2 7 Point C 3 Point D 4 6 Point E 8 LOarrow_forward6. LO 2 Suppose that z, the marginal product of efficiency units of labour, increases in the endogenous growth model. What effects does this have on the rates of growth and the levels of human capital, consumption, and output? Explain your results.arrow_forward
- With current technology, suppose a firm is producing 400 loaves of banana bread daily. Also assume that the least-cost combination of resources in producing those loaves is 5 units of labor, 7 units of land, 2 units of capital, and 1 unit of entrepreneurial ability, selling at prices of $40, $60, $60, and $20, respectively. If the firm can sell these 400 loaves at $2 per unit, what is its total revenue? Its total cost? Its profit or loss? Will it continue to produce banana bread? If this firm’s situation is typical for the other makers of banana bread, will resources flow toward or away from this bakery good?arrow_forward2. Suppose that the table below shows an economy's relationship between real output and the inputs needed to produce that output: LO4 Input Quantity Real GDP 150.0 $400 112.5 300 75.0 200 a. What is productivity in this economy? b. What is the per-unit cost of production if the price of each input unit is $2? c. Assume that the input price increases from $2 to $3 with no accompanying change in productivity. What is the new per-unit cost of production? In what direction would the $1 increase in input price push the economy's aggregate supply curve? What effect would this shift of aggregate supply have on the price level and the level of real output? d. Suppose that the increase in input price does not occur but, instead, that productivity increases by 100 percent. What would be the new per-unit cost of production? What effect would this change in per-unit production cost have on the economy's aggregate supply curve? What effect would this shift of aggregate supply have on the price…arrow_forwardIf real GDP per capita in the United States is $5,000, what will real GDP per capita in the United States be after 3 years if real GDP per capita grows at an annual rate of 2%? O $4,520 O 55,000 $5,306 O $5,560arrow_forward
- Question 2 Suppose that the production function is Y = 10K5L5, the population growth rate is 15 percent and the depreciation rate is 5 percent. What is the steady state level of k if the economy saves 30 percent? O 400 O 225 100 O 1000 Question 3 Suppose that the production function is Y 10K SL5, the population growth rate is 15 percent and the depreciation rate is 5 percent. What is the steady state level of y if the economy saves 30 percent? 250 350 150 O 450arrow_forwardIn the year 2014, the world's average per capita GDP was $14,517. What percent of the world's population lived in a country with per capita GDP that was below $14,517? O 21% 43% 56% OOOO 73% Show Transcribed Text Roughly what percent of the world's population live in countries with per capita GDP lower than the average world per capita GDP? 75% 50% © 25% C 10%arrow_forwardSuppose, under license from Apple, a factory in China buys all the components for an iPhone from multiple manufacturers for $150 They assemble the iPhone and sell it to Apple for $350. Apple then sells the phone to customers for $699. How much value does Apple add during their step in the production process? Ⓒ$1.50 1200 O $349 O $350arrow_forward
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