EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 24, Problem 2P
To determine
Glitter Gulch’s real output.
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4. 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…
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Aggregate D&S assignment chap 12....
Assignment Chapter 12
1. Suppose that the aggregate demand and aggregate supply
schedules for a hypothetical economy are as shown below: LO5
Amount of
Amount of
Real GDP
Real GDP
Demanded,
Billions
Price Level
Supplied,
Billions
(Price Index)
$100
300
$450
200
250
400
300
200
300
400
150
200
500
100
100
a. Use these sets of data to graph the aggregate demand and
aggregate supply curves. What is the equilibrium price level and the
equilibrium level of real output in this hypothetical economy? Is the
equilibrium real output also necessarily the full-employment real
output?
b. If the price level in this economy is 150, will quantity demanded
equal, exceed, or fall short of quantity supplied? By what amount? If
the price level is 250, will quantity demanded equal, exceed, or fall
short of quantity supplied? By what amount?
c. Suppose that buyers desire to purchase $200 billion of extra real
output at each price level. Sketch in the new…
Suppose that the table presented below shows an economy's relationship between real output and the inputs needed to produce that
output:
Input Quantity
Real GDP
150.0
$ 400
112.5
300
75.0
200
Instructions: Enter your responses answers rounded to 2 decimal places.
a. What is the level of 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?
(Click to select) v
What effect would this shift of aggregate supply have on the price level and the level of real output?
O The price level would decrease and real output would increase.
O Both the price level and real output would remain the same.
O The price level would decrease and real output would remain the same.
O The price level would increase…
Chapter 24 Solutions
EP ECONOMICS,AP EDITION-CONNECT ACCESS
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Similar questions
- Fill in the missing portion of the following table and answer the following questions: (Billions) (Negative figures are surpluses) Year 2007 2008 2009 2010 2011 Potential Nominal GDP O248 billion O262 billion O 413 billion O 348 billion 14,449 14,981 15,310 15,647 16.134 Actual Nominal GDP 14,478 14,719 14,419 14,964 15,518 Shortfall in Output -29 262 892 682 616 Tax Rate 25% 25% 25% 25% 25% What was the structural budget deficit in 2008? Actual Budget Deficit (Minus Automatic Stabilizors) 183 413 1,063 877 891 Cyclical Budget Deficit S 66 154 Structural Budget Deficit 190 707 Actual Budgot Deficit % of GDP 1.26% 5.86% 5.74%arrow_forwardD 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 informationarrow_forwardConsider the data shown in the table. Assume that the economy produces only textbooks. What is the growth rate of real GDP between the two years using last year as the base year? |Textbooks Actual Price Sold Last year This year 5,000 $50 5,250 $55 10% 5% O 2.5% 15%arrow_forward
- d. A decrease in aggregate demand. e. An increase in aggregate demand that exceeds an increase in aggrega supply.arrow_forwardSuppose aggregate demand in the economy sharply decines. Keynesian economists say that the price level (at least for a time) will and real output wil O remain constant; decrease Increase; remain constant remain constant; increase decrease; remain constant lo000arrow_forward: Which of the following statements is true if there is an increase in aggregate demand while the economy is in equilibrium on a positively sloping short-run aggregate supply curve? 3 - O a) Prices rise, national income does not change B) Prices decrease, national income does not change O C) Prices go up and national income goes down. O D) Prices decrease and national income decreases. O TO) Prices rise, national income risesarrow_forward
- Suppose that the actual unemployment rate in a country is 7.7 percent. If the country's frictional unemployment rate is 3.5 percent and its structural unemployment rate is 1.1 percent, what is its cyclical unemployment rate? O 11.7 percent O 3.1 percent O 5.3 percent O 4.1 percent ۵arrow_forwardD Question 26 A corporation issues a bond with a par value of $4,800 in one year. Assume that the bond is sold today for $4,500. What is the interest rate received by the lender? O 3.33% O 11.11% O 6.67% 6.25% D Question 27 The U6 unemployment rate includes which individuals that are not included in the U3 unemployment rate? O government employees O people who volunteer O self-employed individuals O people who are working part-time but want full-time work O members of the population that are under the age of 16arrow_forward5. Refer to the data in the table that accompanies problem 2. Suppose that the present equilibrium price level and level of real GDP are 100 and $225, and that data set B represents the relevant aggregate supply schedule for the economy. LO12.6 a. What must be the current amount of real output demanded at the 100 price level? b. If the amount of output demanded declined by $25 at the 100 price level shown in B, what would be the new equilibrium real GDP? In business суcle economists call this change in real terminology, what would GDP?arrow_forward
- Table 25-1 The following table pertains to Quicheland, an economy in which the typical consumer's basket consists of 11 bushels of apples and 5 bushels of almond. Year Year 1 Year 2 Price of Apples (Dollars per bushel) 14 9 90.01. O 79.42. O 91.62 O 110.40 Price of Almond (Dollars per bushel). 5 13 Refer to Table 25-1. If Year I is the base year, then the CPI for Year 2 wasarrow_forwardSuppose, you are lending money to your friend Julia and you want a real rate of return of 8.00%. Furthermore, you expect the inflation rate to be 4.50%. Which of the following interest rates should you charge? O A. 6.25% O B. 12.50% O C. 8.00% O D. 3.50% Click to select your answer. lenovo V560arrow_forwardSuppose Canada's economy is in a long-run equilibrium with real GDP equal to potential output. Now suppose there is a decrease in world demand for Canada's goods. In the short run, O A. real GDP and the price level both fall; real GDP returns to its original level with a lower price level O B. real GDP rises and the price level falls; real GDP returns to its original level with a higher price level O C. real GDP and the price level both rise; real GDP is below its original level with a higher price level D. real GDP falls and the price level rises; real GDP is below its original level with a lower price level In the long run,arrow_forward
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