Question 3 This question refers to an economy in two different situations. Situation 0 (Initial situation) is described in Table 1 and Situation 1 (New situation) is described in Table 2. In both situations, the potential output is Y-2,000. Concept Consumption function Тахes Investment Government purchases |Quantitative Information |C=550+0.5×(Y-T) T-100 1=50 |G0=100 Table 1 (Situation 0: Initial situation) Concept Consumption function Тахes Investment Government purchases |Quantitative Information |C=550+0.5×(Y-T) T=100 I-50 |GI=200 Table 2 (Situation 1: New situation) a. Find the equilibrium income Y* in the initial situation b. Find the equilibrium income Y** in the new situation c. What is the numerical value of the multiplier of government purchases?

Question 3 This question refers to an economy in two different situations. Situation 0 (Initial situation) is described in Table 1 and Situation 1 (New situation) is described in Table 2. In both situations, the potential output is Y-2,000. Concept Consumption function Тахes Investment Government purchases |Quantitative Information |C=550+0.5×(Y-T) T-100 1=50 |G0=100 Table 1 (Situation 0: Initial situation) Concept Consumption function Тахes Investment Government purchases |Quantitative Information |C=550+0.5×(Y-T) T=100 I-50 |GI=200 Table 2 (Situation 1: New situation) a. Find the equilibrium income Y* in the initial situation b. Find the equilibrium income Y** in the new situation c. What is the numerical value of the multiplier of government purchases?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Question: Indicate whether the following statemnts are true or false:- a) If the firm increases the volume of used resources by 30%, and the volume of production thus increases by 20%, then there is a positive effect of the production scale. b) Average fixed costs decrease as production increases. c) The economic profit usually exceeds the accounting profit. Thanks!
Question 1: Specific Factors Model Let assume, you live in an economy where two goods are being produced (say x and y) and labor can be allocated in the production of either good freely, but the other factor is specific. For your more information, good “x” can be produced with labor and capital and good “y” can be produced with labor and land. Given the situation, a) How much does the each good the economy produced? b) How much labor will be employed in each sector?
(a) Consider a closed economy whose desired savings (Sd) and desired investment (Id) are given by the following expressions: CC₂ rd where r denotes the real interest rate. Find the equilibrium in the Goods market for this economy, and represent it in a graph. From now on, suppose there are two large Countries in the world, say Canada (Ca) and the United States (US). Ca (b) To start with, assume that both Countries are closed economies. Their desired consumption (Cd) and desired investment (I) are given by: Cus Its Sd Id = = = = 100+ 600r 170 - 400r 10+ cca (Yca Tca) - 100r 15 - 100r 40+ cus (Yus - Tus) - 200r = 230 - 200r Moreover, output (Y), taxes (T), public expenditure (G), and the marginal propensity to consume (c) are as follows:
Suppose that Y=MX+b, where Y=consumption, b=consumption at zero income, M=slope, and X=income(i) Are Y and X positively related or are they negatively related?(ii) If graphed, would the curve for this equation slope upward or slope downward?(iii) Are the variables Y and X inversely related or directly related?(iv) What is the value of Y if b=10, M=.50, and X=200?(v) What is the value of X if Y=100, b=10, and M=.25?
Question: Suppose that the marginal cost of extracting a non-renewable natural resource is MXC(Q) = 10 and the marginal beneÖt of using the resource are MB(Q) = 90Q. In the context of a static model, address the following question: Calculate the efficient value of Q if the total stock of the natural resource is Q = 50: Provide a graphical representation of the solution. My Note: This is my first time resubmitting, I was told to confirm that MXC(Q) =10 is the correct form of the Marginal cost of extraction to answer this question correctly. I'm not sure but this is the way my professor asked his question.
Suppose Ford produced 10,000 Mustangs in the United States in 2016 and during 2016 sold 7,000 to U.S. customers and exported 2,000 to foreign buyers. How many Mustangs would the BEA count as investment spending by Ford in 2016? A) 10,000 B) 9,000 C) 7,000 D) 1,000 Only typed Answer
Circular flow of income in a two sector model implies- (A) Payments from households to firms and back again (B) Payments from firms to firms arit 11 (C) Payments from households to households (D) Payments from households to firms ( Latinss
Aggregate Variables Value (in billions of dollars) in the base year Consumption spending $900 Investment spending $400 Government spending $200 Transfer payments $60 The marginal propensity to save is equal to 0.4 and there are no exports or imports, (a) Calculate the real GDP in this country, Show your work (b) Calculate the marginal propensity to consume Show your work. (c) Suppose that the government increases spending from $200 billion to $300 billion (i) Calculate the maximum change in real GDP. Show your work (ii) Given the change in real GDP in part (c)(i), calculate the maximum level of the new equilibrium real GDP. Show your work (d) Suppose that taxes decrease by $100 billion. Will the maximum change in real GDP be larger than, smaller than, or equal to the change in part (c)(i)? Explain.
* Question Completion Status: QUESTION 15 Robert loves eating pizza. He bought flour and used it to bake pizza. CARMIN Bakery bought flour which it used to bake pizza that customers purchased. In which case will the flour be counted as a final good? Robert's purchase and CARMIN Bakery's purchase. CARMIN Bakery's purchase but not Robert's purchase. Robert's purchase but not CARMIN Bakery's purchase. Neither Robertť's purchase nor CARMIN Bakery's purchase. a. C. d. O a O b O c O d QUESTION 16 In 2020, a farmer sells $20 million worth of corn to REFG Company. REFG Company produces $25 million worth of cereal in 2020, with sales to households during the year of $21 million. The unsold $4 million worth of cereal remains in REFG Company's inventory at the end of 2020. The transactions just described contribute how much to GDP for 2020? a. $21 million b. $20 million C. $45 million d. $25 million O a O b
Refer to the information provided in Table 8.8 below to answer the questions that follow. Table 8.8 Aggregate Output Aggregate Consumption Planned Investment ($ million) 3,000 4,000 5,000 6,000 7,000 ($ million) 2,000 2,800 3,600 4,400 5,200 ($ million) 1,600 1,600 1,600 1,600 1,600 Refer to Table 8.8. Which of the following statements is false? Select one: O a. The MPCfor this economy is o.8. O b. lfaggregate output equals $4,00o million, then aggregate saving equals $1000 million. c. At an output level of $3,000 million, there is a $600 million unplanned inventory decrease. O d. At an output level $4,000 million, there is a $400 million unplanned inventory decrease.
Wages, dividends, interest, rent = $500 Households Consumer spending = $400 Taxes = $100 Factor markets Government Goods and services markets Wages, dividends, interest, rent = $500 Firms Imports = $30 Government purchases of Exports = $30 goods and services = $100 Reference: Ref 7(22)-1 Figure 7-1: Circular-Flow Model Rest of world (Figure 7-1: Circular-Flow Model) Use Figure 7-1: Circular-Flow Model. If the circular-flow model is in equilibrium (the sum of money flowing into each box is equal to the sum of the money flowing out of it) and there is a decrease in exports, holding everything else constant, which outcome is likely to occur? A) a decrease in the nominal GDP B) an increase in the real GDP C) a decrease in the unemployment rate D) an increase in the inflation rate
4- The manager of Collins Import Autos believes the number of cars sold in a day(Q) depends on two factors: (1) the number of hours the dealership is open (H) and (2) the number of salespersons working that day (S ). After collecting data for two months (53 days), the manager estimates the following log-linear model: Q = aHbSc ----- a. Explain how to transform this log-linear model into a linear form that can be estimated using multiple regression analysis. b. How do you interpret coefficients b and c? If the dealership increases the number of salespersons by 20 percent, what will be the percentage increase in daily sales? c. Test the overall model for statistical significance at the 5 percent significance level.