Suppose an economy produces steel, wheat, and oil. The steel industry produces $100,000 inrevenue, spends $4,000 on oil, $10,000 on wheat, pays workers $80,000. The wheat industryproduces $150,000 in revenue, spends $20,000 on oil, $10,000 on steel, and pays workers$90,000. The oil industry produces $200,000 in revenue, spends $40,000 on wheat, $30,000 onsteel, and pays workers $100,000. There is no government. There are neither exports norimports, and none of the industries accumulate or decumulate inventories. Output not sold toother sectors is sold as final goods.1. Summarize this information in a table similar to the one in the lecture notes.2. Calculate GDP using the production and income methods. Show your calculations.3. A government is introduced. First consider this policy: the government taxes oilproducers $10,000, and distributes this revenue to workers. Recalculate GDP using theincome approach.4. Now consider this policy: the government taxes oil producers $10,000, and uses therevenue to purchase steel. (Assume that total steel production is unchanged.)Recalculate GDP.5. Now assume that the wheat producer uses $10,000 of imported fertilizer. Output isunchanged. There are no exports. Again, calculate GDP using the production and incomemethods. Show your calculations.

2) Gross Domestic Product or GDP is the sum total of the money value of all goods and services…

Answered: Suppose an economy produces steel,…

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

Q#1. Last year, M.Hamed left a job that pays 36,000 OMR to run his own bike-repair shop. M. Hamed’s shop charges 5 OMR for a repair, and last year the shop performed 7,000 repairs. M. Hamed’s production costs for the year included rent, wages, and equipment. M. Hamed spent 6,000 OMR on rent and 18,000 OMR on wages for his employees. M. Hamed keeps whatever profit the shop earns but does not pay himself an official wage. M. Hamed borrowed 20,000 OMR for the shop’s equipment at an annual interest rate of 6 percent. a. What is M. Hamed’s accounting profit? b. What is M. Hamed’s economic profit? c. Is the decision to leave the job and run the bike business, good? Why?
Food production increased by 5%, while the production of tables remained unchanged. Unemployment is currently at 24,5% and the manufactures of the tables and food reported that they are using 85% of their production capacity. Based on the above information, which of the following statements is correct? A. Hilo is technically efficient in its production of tables and food. B. Hilo is inefficient in its production of tables and food. C. Hilo is at a point on the production. possibilities curve. D. Hilo is at a point outside the production possibilities curve.
1. The farmer produces 115 pounds of oranges at a total cost of $1.38 per pound. He sells all of the oranges to Firm F for $1.71 per pound. Firm F produces 60 gallons of orange juice at a total cost of $3.81 per gallon (including the amount paid to the farmer for the oranges). Firm F sells 55 gallons of juice to consumers for $5.71 per gallon There are no other firms in this simple economy. What is the value added by Firm F? Enter a whole number with no dollar sign. 2. A farmer grows wheat and sells it to the miller for $1.25. The miller turns the wheat into flour and sells it to the baker for $2.00. The baker turns the flour into bread and sells it to consumers for $3.80. What is the value added by the baker? Group of answer choices $3.80 $7.05 $1.80 $0.55
An economy can produce good 1 using labour and capital and good 2 using labour and capital. The total supply of labour is 100 units. Given the supply of capital and capital, the marginal products of labour for the two goods are as follows: Workers Employed 10 20 30 40 50 60 70 80 90 100 MPL in Sector1 4.53 3.42 3 2.61 2.34 2.22 2.07 1.98 1.89 1.8 MPL in Sector 2 4.77 3.15 2.46 2.07 1.8 1.62 1.5 1.38 1.29 1.2 a) Suppose that the price of good 1 is $1 and the price of good 2 is $2. Determine graphically the wage rate and the allocation of labour between the two sectors. [. c) Suppose that the relative price of good 2 falls to 1.3. Repeat a). d) Calculate the effects of the price change on the income of the specific factors (capital and capital) in sectors 1 and 2. [₁ +~1
Suppose we are analyzing the market for pizza as shown on the graph below. Answer the following questions:- Price $40 35 30 25 20 15 10 100 200 300 400 500 600 700 800 Quantity Suppose the cost of production (input prices) increase in the market. What do you expect to happen to the market? Explain briefly. (2 marks) е.
JUST PART D PLEASE 3. Suppose an economy consists of Baseball, Seafood, and Technology. To produce one unit of Baseball requires: .2 units of Baseball .4 of units of Seafood .3 units of Technology To produce one unit of Seafood requires: .1 units of Baseball .2 of units of Seafood .5 units of Technology To produce one unit of Technology requires: .3 units of Baseball .1 of units of Seafood .5 units of Technology The consumer demand is: 170 units of Baseball 100 units of Seafood 200 units of Technology A. Define the necessary variables to determine the amount of Baseball, Seafood, and Technology to supply to satisfy manufacturing and consumer demands. B is S is T is B. What are the 3 algebraic equations that relate the amount supplied, amount consumed during manufacturing, and amount demanded by the consumer? C. Express the 3 equations from part B in the equivalent matrix form. D. How much Baseball, Seafood, and Technology must be supplied to meet manufacturing and consumer demands.…
am. 285.
Despite lower inflation figures posted by the Australian Bureau of Statistics in July, the price of some goods and services continue to increase. To answer the following questions, you will need to refer to the ABC News article by Morris (2023) which reports on the increase in chocolate prices, as well as undertake your own additional research. 1. Assuming that the domestic market for chocolate is perfectly competitive, use a generic market demand and supply diagram to: (a) Illustrate the domestic market for Chocolate in equilibrium, clearly label your diagram. (b) Explain, with the aid of a new diagram, the impact of the supply shock on the market for chocolate from part (a), assuming that consumer demand for chocolate was not affected. (c) Explain 3 reasons for the supply-side shock that were outlined in Morris (2023). Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure
1. (Textbook problem 2, page 103) An economy has the production function Y=0.2(K+√N). In the current period, K = 100 and N = 100. a. Graph the relationship between output and capital, holding labor constant at its current value. b. What is the marginal product of capital? c. Does the marginal product of capital diminish? d. Graph the relationship between output and labor, holding capital constant at its current value. e. Does the marginal productivity of labor diminish?
Suppose that a country has only two commodities, two factors of production, and no savings. The two commodities are wine (W) and cheese (C) and the two factors of production are capital (K) and labour (L). The country collects the following partial factor taxes: tKC is a tax on capital used in the production of cheese equal to 20%. tKW is a tax on capital used in the production of wine equal to 25%. tLC is a tax on labour used in the production of cheese equal to 20%. tLW is a tax on labour used in the production of wine equal to 15%. Which of the following would have the same outcome as the above taxes? A) Replacing tKW and tKC with a 22.5% tax on capital. B) Replacing tKC and tLC with a 20% tax on cheese. C) Replacing tKW and tLW with a 20% tax on wine. D) Replacing tLW and tLC with a 17.5% tax on labour. E) All of the above. Please explain
5. Use the following graph to answer the following questions. Briefly explain the reason why you chose a specific point. Capital (machines per week) 20 16 10 C B 16 Q = 14,000 Q = 6,000 30 Labor (Workers per week) 5.1 If the wage rate and the rental price of machines are both $50 and total cost is $800, is the cost-minimizing point A, B, or C? 5.2 If the wage rate is $40, the rental price of equipment is $120, and total cost is $1,200, is the cost-minimizing point A, B, or C? 5.3 If the wage rate is $60, the rental price of equipment is $90, and total cost is $1,800, is the cost-minimizing point A, B, or C?
18. In the short run, Boeing cannot: A. hire more engineers to design jetliners B. use additional rubber and steel in jetliner production C. employ more clerical workers in the finance department D. increase the size of its jetliner assembly plant

SEE MORE QUESTIONS

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS