MACROECONOMICS W/CONNECT
18th Edition
ISBN: 9781307253092
Author: McConnell
Publisher: Mcgraw-Hill/Create
expand_more
expand_more
format_list_bulleted
Question
Chapter 6, Problem 2P
To determine
Glitter Gulch’s real output.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Recent data from the Bureau of Labor Statistics show that the average price level for consumers rose 5.4% over the past year. While some are expressing concern over rising inflation leading the economy to “overheat,” there is some evidence indicating that this is due to the reopening of the economy as producers adjust to rising demand for goods and services. Many of the goods with the largest price increases, like bacon or cars and trucks, cannot have their production ramped up as quickly as demand is increasing. Other industries are facing supply chain challenges, like shortages of truck drivers. These problems are most likely to be short term, so, as supply catches up with demand, we can expect to see prices return to normal.
As evidence, after spiking to record highs in early summer, lumber prices have now fallen below their price at the start of the year. The reason for the dramatic price increase earlier in the year was a combination of reduced supply in 2019 and a surge in demand…
Assume that aggregate demand curve can be
expressed by the following function: W = 55 - 3Q,
while the aggregate supply curve can be
expressed by the following function: W = 5+7Q.
Here W denotes wage level in thousand dollar and
Q denotes unit of labours in million people.
What is labour equilibrium wage level and units of
labour?
Question 05: Benjamin Franklin coined the phrase "Time is Money", and spelt out the
associated opportunity cost reasoning in his "Advice to a Young Tradesman" (1746):
"Remember that Time is Money. He that can earn Ten Shillings a Day by his
Labour, and goes abroad, or sits idle one half of that Day, tho' he spends but
Sixpence during his Diversion or Idleness, ought not to reckon That the only
Expence; he has really spent or rather thrown away
besides."
Shillings
Fill in the blank of the number of Shillings in the above quote. Hint: think of shillings
as dollars and sixpence as "pocket change" - what happens if you decide to take the
afternoon off from work?
A) ten shillings in lost wages
B) twenty shillings in lost wages
C) one shillings in lost wages
D) five shillings in lost wages
Knowledge Booster
Similar questions
- Bianca, a small oil producer is talking to her chief engineer, Pete, about repairs and upgrades to an oil well. Pete: “...additional upgrades on the well would cost $5,000 but would allow increased production and revenue of more than $10,000 per year.” Bianca: “I already spent $20,000 on this well, it is a money pit; we should not spend anymore on it.” Based on the information given, what is the sunk cost? Group of answer choices Only type writing allow....don't use pepar work then I will give u down thamb ?arrow_forwardSuppose that a hypothetical economy has the following relationship between its real output and the input quantities necessary for producing that output: 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 level and the level of real output?arrow_forwardQuestion 01: Benjamin Franklin popularized the phrase "Time is Money", and spelt out the associated opportunity cost reasoning in his "Advice to a Young Tradesman" (1746): "Remember that Time is Money. He that can earn Ten Shillings a Day by his Labour, and goes abroad, or sits idle one half of that Day, tho' he spends but Sixpence during his Diversion or Idleness, ought not to reckon That the only Expence; he has really spent or rather thrown away _______ Shillings besides." Fill in the blank of the number of Shillings in the above quote. Hint: think of shillings as dollars and sixpence as "pocket change" - what happens if you decide to take the afternoon off from work? Question 1 options: A) twenty shillings in lost wages B) five shillings in lost wages C) one shillings in lost wages D) ten shillings in lost wagesarrow_forward
- During a recession, couldn't firms reduce their labor costs by the same, or possibly more, if they laid off fewer workers while cutting wages? Why did few firms use this approach?arrow_forwardSuppose advances in computer technology lead to a surge in worker productivity. In the long run, output will and the price level will Increase; increase Increase; decrease Increase; remain unchanged Decrease; decrease Remain unchanged; remain unchanged ↓arrow_forwardIn 2020 Pakistan Automobile Market falls by 33.6 % as the pandemic and lockdowns affect sales. In the same year, Ministry of Industries has announced its new auto policy to reduce taxes which would bring down car prices and provide relief the consumers. Moreover, the government has also approved the Electric Vehicle (EV) policy. Considering the above scenario, do you think that government is diligently working to uplift the economy and has the recognition that the automobile sector can be the biggest contributor in it?arrow_forward
- Refer to the figure below. Which of the points in the above graph are possible short-run equilibria? Price level (GDP deflator, 2000 = 100) O A and B O A and C O A and D O A, B, C, and D LRAS SRAS, SRAS₂ AD₂ AD₁ Real GDP (trillions of 2000 dollars)arrow_forwardThe equations below describe the aggregate demand of an economy. There are neither a flow of goods and services nor capital across borders of this country. Y=C +I +G………. (1) C=Co+C(Y^d)……. (2) Y^d= Y-T…………. (3) T=t(Y) ……………. (4) I=Io+I(r)………… (5) G=Go……………... (6) M=PL(r,Y)……… (7) where Y is gross real domestic product, C is aggregate consumption expenditure by households, I is aggregate investment expenditure by firms, is government purchases of goods and services, Y^d is disposable personal income, and T is total income tax payments to government by…arrow_forwardThe equations below describe the aggregate demand of an economy. There are neither a flow of goods and services nor capital across borders of this country. Y=C +I +G………. (1) C=Co+C(Y^d)……. (2) Y^d= Y-T…………. (3) T=t(Y) ……………. (4) I=Io+I(r)………… (5) G=Go……………... (6) M=PL(r,Y)……… (7) where Y is gross real domestic product, C is aggregate consumption expenditure by households, I is aggregate investment expenditure by firms, is government purchases of goods and services, Y^d is disposable personal income, and T is total income tax payments to government by…arrow_forward
- Interpret the change you drew on the previous graph by filling in the blanks in the following paragraph: The higher-than-expected price level causes firms to earn_____profit than they expected on each unit of output they produce, and, therefore, they_____their production level. At the same time, the real value of wages and other resource prices is_____than workers and firms expected when they signed long-term contracts. As a result, the economy as a whole produces at a level______its full-employment output, and the unemployment rate is_____than its natural rate. Now, suppose prices remain higher than expected. As a result, in the next round of labor negotiations, unions demand and obtain higher wages for their members. The following graph shows the long-run aggregate supply curve (LRASLRAS) at full-employment output for this economy as well as the same initial short-run aggregate supply curve as in the first graph. Shift one or both of these lines to illustrate how the economy…arrow_forwardTrue or False? What we call “short-run output,” denoted by Ỹ, is measured in dollars. True Falsearrow_forwardThe Greek letter a represents a number that determines how much output responds to unexpected changes in the price level. In this case, assume that a = $2 billion. That is, when the actual price level exceeds the expected price level by 1, the quantity of output supplied will exceed the natural level of output by $2 billion. Suppose the natural level of output is $60 billion of real GDP and that people expect a price level of 95. On the following graph, use the purple line (diamond symbol) to plot this economy's long-run aggregate supply (LRAS) curve. Then use the orange line segments (square symbol) to plot the economy's short-run aggregate supply (AS) curve at each of the following price levels: 85, 90, 95, 100, and 105. PRICE LEVEL 125 120 115 110 105 100 95 90 85 80 75 0 10 20 40 50 60 70 30 OUTPUT (Billions of dollars) 80 90 100 O AS LRAS ? The short-run quantity of output supplied by firms will fall short of the natural level of output when the actual price level level that…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Macroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506756Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning