Q: Why do economists include only final goods and services in measuring GDP
Why do economists include only final goods and services in measuring GDP for a particular year? Why don’t they include the value of the stocks and bonds bought and sold? Why don’t they include the val...
See AnswerQ: Suppose a handbill publisher can buy a new duplicating machine for $
Suppose a handbill publisher can buy a new duplicating machine for $500 and the duplicator has a 1-year life. The machine is expected to contribute $550 to the year’s net revenue. What is the expected...
See AnswerQ: Assume there are no investment projects in the economy that yield an
Assume there are no investment projects in the economy that yield an expected rate of return of 25 percent or more. But suppose there are $10 billion of investment projects yielding expected returns o...
See AnswerQ: Refer to the table in Figure 30.5 in the book
Refer to the table in Figure 30.5 in the book and suppose that the real interest rate is 6 percent. Next, assume that some factor changes such that that the expected rate of return declines by 2 perce...
See AnswerQ: What will the multiplier be when the MPS is 0, .
What will the multiplier be when the MPS is 0, .4, .6, and 1? What will it be when the MPC is 1, .90, .67, .50, and 0? How much of a change in GDP will result if firms increase their level of investme...
See AnswerQ: Suppose that an initial $10 billion increase in investment spending expands
Suppose that an initial $10 billion increase in investment spending expands GDP by $10 billion in the first round of the multiplier process. If GDP and consumption both rise by $6 billion in the secon...
See AnswerQ: “That segment of a competitive firm’s marginal-cost curve that
“That segment of a competitive firm’s marginal-cost curve that lies above its average-variable-cost curve constitutes the short-run supply curve for the firm.” Explain using a graph and words.
See AnswerQ: If a firm's current revenues are less than its current variable costs
If a firm's current revenues are less than its current variable costs, when should it shut down? If it decides to shut down, should we expect that decision to be final? Explain using an example that i...
See AnswerQ: Assume that the data in the following table give an indifference curve
Assume that the data in the following table give an indifference curve for Mr. Chen. Graph this curve, putting A on the vertical axis and B on the horizontal axis. Assuming that the prices of A and B...
See AnswerQ: Linda sells 100 bottles of homemade ketchup for $10 each.
Linda sells 100 bottles of homemade ketchup for $10 each. The cost of the ingredients and the bottles and the labels was $700. In addition, it took her 20 hours to make the ketchup and to do so she to...
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