EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 17, Problem 7DQ
To determine
The impact of increasing price on the extraction of resource.
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2. 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…
6. Indicate whether each of the following state-
ments applies to microeconomics or macro-
marginal cost and
economics: LO3
a. The unemployment rate in the United States
was 5.0% in April 2008.
b. A U.S. software firm discharged 15 work-
ers last month and transferred the work to
India.
C. An unexpected freeze in central Florida
reduced the citrus crop and caused the price
of oranges to rise.
d. U.S. output, adjusted for inflation, grew by
2.2% in 2007.
e. Last week Wells Fargo Bank lowered its
interest rate on business loans by one-half
of 1 percentage point.
D Question 14
Suppose for the country of Joshua-land, the annual inflation rate is 7%, the population growth is 5% per year while GDP increases by 2%
per year. How long would it take for the country to double its GDP?
O 7 years
O 14 years
35 years
O Never
Question 15
For the previous question, how long would it take Joshua-land to double its GDP
capita?
per
O 7 years
O 14 years
O 35 years
Never
Question 16
For Joshua land, how long would it take for prices to double?
O 7 years
O 10 years
35 years
O Not enough information
Chapter 17 Solutions
EP ECONOMICS,AP EDITION-CONNECT ACCESS
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- 3. 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_forwardThe 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_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 $14,517? O 21% 43% 56% OOOO 73% Show Transcribed Text Roughly what percent of the world's population live in countries with per capita GDP lower than the average world per capita GDP? 75% 50% © 25% C 10%arrow_forward
- The figure below shows the market for large bags of potato chips. Market for Potato Chips in large bag units Price ($) 7 LO LO 5 3 2 1 0 10 20 30 40 50 60 70 80 90 100110120 S Darrow_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_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
- 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_forwardGiven this two-sector economy: Skills Practice Final Demand Skills lo 50 50 Practice 50 lo 50 Clutch moments 40 20 High-fives 10 30 1. Solve for the Leontief matrix and its inverse. 2. Do both sectors rely on their own resources? 3. Solve for the new output if final demand changes to 40 for skills and 60 for practice. 4. Reconstruct the transaction table, given your answers in (3).arrow_forwardBased on Figure 1, choose the right statement. Assume that cloth is the labor- intensive commodity and that corn is the capital-intensive commodity. 1) The qutput of cloth less than doubled because of lack of enough demand. O 2) The output of cloth less than doubled because capital is not used in the cloth production. O 3) The output of cloth less than doubled because labor is the only factor of production. .O 4) The output of cloth less than doubled because only labor increased. Figure 1. Economic growth Com (Tons) 80 70 BA 130 250 Cloth (Yards)arrow_forward
- 2014 Tennis balls Golf balls Bottles of Gatorade Price $2 $4 $1 Quantity 100 100 200 2015 Price Quantity Tennis balls Golf balls Bottles of Gatorade $6 100 $2 $2 100 200arrow_forwardThe following diagram shows select information for an economy made up of three industries for a particularly year. i+w+r+p=0 m $330 billion O $600 billion Onone is correct i+w+r+p O $400 billion Industry 2 O $270 billion i+w+r+p S m= 100 m 90 i=interest; w= wages/salaries; r = rent; p = profit; m = intermediate inputs; s= market value of total industry output; f = market value of industry output sold as final products. Note: All values are in billions of dollars. Industry 1 f=160 Industry 3 What is the gross domestic product (at factor prices) for this economy? 10 20 f=0 30 f=40arrow_forward1. LO 2 In the Malthusian model, suppose that the quantity of land increases. Using diagrams, deter- mine what effects this has in the long-run steady state and explain your results.arrow_forward
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