MindTap Economics, 1 Term (6 Months) Printed Access Card for Mceachern's ECON MACRO, 6th
6th Edition
ISBN: 9781337915595
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 8, Problem 2P
Sub-Part
A
To determine
Production possibilities frontier to demonstrate
- The effect of
PPF in next period upon the combination of goods selected in present period.
Sub-Part
B
To determine
Production possibilities frontier to demonstrate economic growth for:
b. More or less growth on choosing different point on PPF.
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Chapter 8 Solutions
MindTap Economics, 1 Term (6 Months) Printed Access Card for Mceachern's ECON MACRO, 6th
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- A country's choice of producing capital goods versus consumption goods today a - has no effect on the country's PPF over time because resources are fixed. b - would have the same effect on PPF over time since both drive economic growth evenly. c - would expand PPF more over time if more capital goods are produced today. d - would expand PPF more over time if more consumption goods are produced today.arrow_forwardEconomic Growth – End of Chapter Problem One analyst predicts that self-driving cars will ultimately reduce the number of cars that are produced. She argues that because self-driving cars can drive other people rather than sitting in people's driveways and garages, the United States will need to produce fewer cars. She argues that growth will slow because we are producing a decreasing number of cars each year. Do you agree? Why or why not? Producing fewer cars, everything else equal, will economic growth. However, the resources no longer used to produce cars be used to produce other items. Furthermore, the self-driving cars could opportunities for new businesses, which would have the effect. Therefore, the ultimate impact self-driving cars would have on economic growth isarrow_forwardConsider a simple economy whose only industry is printing. In this industry, productivity—the amount of goods and services a worker can produce per hour—is measured by the number of documents one worker prints per hour. In the following table, match each example to the productivity determinant it represents. Examples Human Capital per Worker Natural Resources per Worker Physical Capital per Worker Technological Knowledge The knowledge workers receive from training sessions on how to use and repair the printing presses The presses used to print documents The trees that are used to create pulp for the production of paper A way of organizing workers among the printing presses that speeds up the printing processarrow_forward
- Capital good (millions per month) 0 A B C D Consumption goods (millions per month) Using the diagram above which country should have the slowest rate of economic growth and why? Country A since it devotes most of its resources to capital Country D since it devotes the least amount of resources to capital. Country B since it has a good mix of capital and consumption goods. Country C since it has a mix of consumption and capital good that will keep thearrow_forwardEconomic Growth – End of Chapter Problem Discuss an example of technological progress not mentioned in the chapter and how it impacted economic growth. a. Henry Ford revolutionized the automobile industry with new production techniques for the Model T. He introduced an assembly line process, replacing the previous process which had required the workers and their equipment to move around the plant to each car that was being built. This technological change made workers much more b. Ford also instituted an 8-hour work day and a minimum wage of $5 per day. This increased workers' and, for the first time, automobiles were affordable for large numbers of people. More customers meant production of the Model T generated , lowering the average cost to produce a car. These productivity gains enabled Ford to lower the price of the Model T from $825 in 1908 to $260 in 1925.arrow_forward7. Suppose that the economy's production function is Y = √K√LA where K is capital, L is labor, and A is the state of technology. Suppose that the saving rate (s) is equal to 6%, the rate of depreciation of capital (8) is equal to 5%, the number of workers grow at 5% per year and the rate of technological progress is 4%. (a) Find the steady state values of: iv. growth rate of output per worker growth rate of output v. (b) Suppose that the saving rate increases. What is its short-run and the long-run effect on the growth rate of per-capita output?arrow_forward
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