Charles's Fire Engines is the sole seller of fire engines in the fictional country of Pyrotania. Initially, Charles produced four fire engines, but he has decided to increase production to five fire engines. The following graph shows the demand curve Charles faces. As you can see, to sell the additional engine, Charles must lower his price from $105,000 to $90,000 per fire engine. Note that although Charles gains revenue from the additional engine he sells, he also loses revenue from the initial four engines because he sells them all at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial four engines by selling at $90,000 rather than $105,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $90,000. PRICE (Thousands of dollars per fire engine) 150 135 120 105 90 75 60 45 30 15 0 0 1 2 Demand 3 4 5 6 QUANTITY (Fire engines) 7 + 8 9 10 Revenue Lost Revenue Gained (?)

Charles's Fire Engines is the sole seller of fire engines in the fictional country of Pyrotania. Initially, Charles produced four fire engines, but he has decided to increase production to five fire engines. The following graph shows the demand curve Charles faces. As you can see, to sell the additional engine, Charles must lower his price from $105,000 to $90,000 per fire engine. Note that although Charles gains revenue from the additional engine he sells, he also loses revenue from the initial four engines because he sells them all at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial four engines by selling at $90,000 rather than $105,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $90,000. PRICE (Thousands of dollars per fire engine) 150 135 120 105 90 75 60 45 30 15 0 0 1 2 Demand 3 4 5 6 QUANTITY (Fire engines) 7 + 8 9 10 Revenue Lost Revenue Gained (?)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Ch 17

Economics

Charles's Fire Engines is the sole seller of fire engines in the fictional country of Pyrotania. Initially, Charles produced four fire engines, but he has
decided to increase production to five fire engines. The following graph shows the demand curve Charles faces. As you can see, to sell the additional
engine, Charles must lower his price from $105,000 to $90,000 per fire engine. Note that although Charles gains revenue from the additional engine
he sells, he also loses revenue from the initial four engines because he sells them all at the lower price.
Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial four engines by selling at $90,000 rather
than $105,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine
at $90,000.
PRICE (Thousands of dollars per fire engine)
150
135
120
105
90
75
60
45
30
15
0
0 1
2
Demand
3 4 5
6
QUANTITY (Fire engines)
7
+
8
9
10
Revenue Lost
Revenue Gained
(?)

Charles
True
increase production from 4 to 5 fire engines, because the
True or False: If Charles's Fire Engines were a competitive firm instead and $105,000 were the market price for an engine, decreasing its price from
$105,000 to $90,000 would result in an increase in production quantity and total revenue.
False
dominates in this scenario.

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GDP 1. Calculate the values for the blanks in the shaded areas of the table below: Expenditure Components of GDP by Country, 2020 (83Son of current US dollars) Australia Canada Denmark Finland Japan India 1617 137.9 873 65.9 C E FOOD 80.0 65.3 16 0.5 L M N 195.4 97.G 1725 96.7 Household consumption Government expenditure Investments Gross fixed Investments Changes in inventories Net Exports Exports Imports A: ÄÜÄ÷ B: C: D: E: F: G: H: I: J: 746.5 K: L: 297.2 A 316.9 4.3 3152 254.7 943.7 371.8 B 377.7 (147) K 476.0 509.8 M: N: 0: P: 1,591.7 Q: R: 292.1 722.0 97.0 4973 $11.3 કીડી || T: 2.700.7 Y: 1,066.4 1,279.5 106 785.4 786.2 New Zealand UK 122.0 43.7 G 47.3 (p.s) P 46A GDP S U W Y Source: GOP by Type of Expenditure at current prices-US dollars, Retrieved 7/27/2022. National Accounts Estimates of Main Aggregates United Nations feste Division 472 Z: ZZ: 1,683.7 2. Based on the information in the table and your calculations for Question #1: Do any countries have positive net exports?…