MACROECONOMICS (LL)
21st Edition
ISBN: 9781260186949
Author: McConnell
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 2.2, Problem 2QQ
To determine
Circular flow in the two sector model.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Compare and contrast the changes in the price of basic commodities like rice and food products, to that of other products like oil and electricity. What factors brought about these changes?
In the country of Solow, people buy only three things: food, rent, and luxury goods. Last year, the price of luxury goods went down, and the price of rent increased five percent. Overall CPI inflation increased 10%. What happened to the price of food?
a) The price of food increased by exactly 10%
b) The price of food increased by more than 10%
c) The price of food increased by between 5% and 10%
d) The price of food must have gone down
e) None of these choices are correct
Each week a person buys 4 units of good A, 5 units of good B, and 6 units of good C. Inweek 1 the prices of the three goods (in A, B, C order) were ($2, $3, $4). In week 2 the prices of the three goods were ($2.05, $2.90, $4.20)
The percentage change in the cost of the basket of goods was
Chapter 2 Solutions
MACROECONOMICS (LL)
Ch. 2.2 - Prob. 1QQCh. 2.2 - Prob. 2QQCh. 2.2 - Prob. 3QQCh. 2.2 - Prob. 4QQCh. 2 - Prob. 1DQCh. 2 - Prob. 2DQCh. 2 - Prob. 3DQCh. 2 - Prob. 4DQCh. 2 - Prob. 5DQCh. 2 - Prob. 6DQ
Ch. 2 - Prob. 7DQCh. 2 - Prob. 8DQCh. 2 - Prob. 9DQCh. 2 - Prob. 10DQCh. 2 - Prob. 11DQCh. 2 - Prob. 12DQCh. 2 - Prob. 13DQCh. 2 - Prob. 1RQCh. 2 - Prob. 2RQCh. 2 - Prob. 3RQCh. 2 - Prob. 4RQCh. 2 - Prob. 5RQCh. 2 - Prob. 6RQCh. 2 - Prob. 7RQCh. 2 - Prob. 8RQCh. 2 - Prob. 1PCh. 2 - Prob. 2PCh. 2 - Prob. 3PCh. 2 - Prob. 4P
Knowledge Booster
Similar questions
- The price of a DVD rental is 1.50 dollar and the price of a downloaded movie is $1. What is relative price of downloaded movie.arrow_forward1. In the labor market, the demand for labor represents A)The number of hours indivduals wish to work at all wages levels B)The number of hours of labor employers wish to employ at all wages levels C)The hours of overtimes workers are willing to work D)The number of employers in the marketarrow_forwardIf the price of a candy bar is $1 and the price of a fast food meal is $5,A) the money price of a fast food meal is 1/5 of a candy bar.B) the money price of a candy bar is 1/5 of a fast food meal.C) the relative price of a fast food meal is 5 candy bars.D) the relative price of a candy bar is 5 fast food mealsarrow_forward
- Question: Which of the following factors don’t affect the demand for a commodity?[A] Price of commodity[B] Income of individual consumer[C] Want of the consumer[D] Price of related goodPlease Dont use AI tool.arrow_forwardSuppose that we have the following price data Year Price of Gasoline Price of Soda 1987 $.89 per gallon $.35 per 16 oz. bottle 2005 $ 2.39 per gallon $1.49 per 16 oz. bottle a) Calculate the percentage change in the price of each good. b) Calculate the percentage change in the relative price of gasoline in terms of soda. Year Relative Price of Gasoline 1987 $.89 / .35 = 2.54 2005 $ 2.39 /1.49 = 1.60 c) Why do we only worry about relative prices in economics?arrow_forwardin the market for paperback books, the price of paper increases and more people are reading books on kindles and ipads. Which of the following will happen as a result of these two events.arrow_forward
- Explain with the help of a graph how production and consumption of cloth are affected when the relative price of cloth increases.arrow_forwardSuppose housing constitutes 45% of the typical basket of goods for a typical consumer, education constitutes 3%, and all other goods make up the remaining 52%. Assume the price of housing rises by 4%, the price of education falls by 10%, and prices remain constant for all other goods. Based on the information given, we can definitely say Select one: a.because the price of education fell by more than the price of housing rose, the consumer price index (CPI) must have decreased. b.the CPI is higher than in the previous year. c.if consumers get a 4% pay raise, they are worse off in terms of their real income compared to inflation as measured the CPI. d.because housing is a luxury (as is education), consumers are certainly no worse off in terms of their real wages as measured by the CPI. e.the CPI is unchanged from the previous year.arrow_forwardUsing the table, for each line item and its associated column, describe how the market for each specific product will be affected by the associated event indicating whether it will rise, fall, or no change. For example, in the first line item for the market of corn, based upon the event of a severe drought, the price will either rise or fall or no change, demand curve will shift left (fall) or right (rise) or no change, supply curve will shift left (fall) or shift right (rise) or no change, quantity demanded will rise, fall, or no change, and quantity supplied will either rise, fall, or no change. Event Market for: Price Demand Curve Supply Curve Quantity Demanded Quantity Supplied A severe drought hits the Midwest corn growers Corn The U.S. government reduces taxes on imported lumber New Home Building The federal government raises the minimum wage from $7.25 per hour to $11.00 per hour Minimum wage jobs…arrow_forward
- In the United States, grain has many uses. These include food (directly and indirectly), fuel, and exportation. Since 2001, the growing demand for grain has resulted in a double price of farmland in Iowa, Nebraska, South Dakota, and Wyoming. How does the growing price of grain affect the market for farmland? How might farmers meet the growing demand for grain without having to use a greater quantity of land?arrow_forwardFOR each of the following events describe in words what happens to the suply, demand, quantity supplied, quantity demanded in the market for new cars 1 the raju auto workers get a large raise 2 a new technology is introduced in the factory 3 the government subsidizes bus tickets resulting in a large reduction in the cost of a bus ticket 4 real income grow and new cars are a normal good 5 there is machinery break down in the industryarrow_forwardThe market price of pizzas in a college town increased recently, and the students in an economics class are debating the cause of the price increase. Some students suggest that the price increased because several pizza parlors in the area have recently gone out of business. Other students attribute the increase in the price of pizzas to a recent decrease in the price of beer. Everyone agrees that the decrease in the price of beer was caused by a recent decrease in the price of grain, which is not generally used in making pizzas. The first group of students thinks the increase in the price of pizzas is due to the fact that several pizza parlors in the area have recently gone out of business. On the following graph, adjust the supply and demand curves to illustrate the first group’s explanation for the increase in the price of pizzas. (graph in photo) The second group of students attributes the increase in the price of pizzas to the decrease in the price of beer.…arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
- Principles of Economics, 7th Edition (MindTap Cou...EconomicsISBN:9781285165875Author:N. Gregory MankiwPublisher:Cengage LearningPrinciples of Macroeconomics (MindTap Course List)EconomicsISBN:9781285165912Author:N. Gregory MankiwPublisher:Cengage LearningEssentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou...
Economics
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Macroeconomics (MindTap Course List)
Economics
ISBN:9781285165912
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning