EBK ESSENTIALS OF ECONOMICS
4th Edition
ISBN: 8220103647380
Author: KRUGMAN
Publisher: MAC HIGHER
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Question
Chapter 15, Problem 1P
To determine
To determine: The given years’ real GDP per capita as a percentage of its 1960 and 2011 levels.
Concept Introduction:
Expert Solution & Answer
Explanation of Solution
a. Calculation of real GDP.
Formula to calculate real GDP per capita:
GDP per capita of Argentina:
| Year | Real GDP per Capita($) | Percentage of 1960 real GDP per Capita(%) | Percentage of 2011 real GDP per Capita(%) |
| 1960 | 6,585 | 100 | 48 |
| 1970 | 8,147 | 124 | 59 |
| 1980 | 8,938 | 136 | 64 |
| 1990 | 6,889 | 105 | 50 |
| 2000 | 9,208 | 140 | 66 |
| 2011 | 13,882 | 211 | 100 |
GDP per capita of Ghana:
| Year | Real GDP per Capita($) | Percentage of 1960 real GDP per Capita(%) | Percentage of 2011 real GDP per Capita(%) |
| 1960 | 1,557 | 100 | 66 |
| 1970 | 1,674 | 107 | 71 |
| 1980 | 1,418 | 91 | 60 |
| 1990 | 1,296 | 83 | 55 |
| 2000 | 1,530 | 98 | 65 |
| 2011 | 2,349 | 150 | 100 |
GDP per capita of South Korea:
| Year | Real GDP per Capita($) | Percentage of 1960 real GDP per Capita(%) | Percentage of 2011 real GDP per Capita(%) |
| 1960 | 1,610 | 100 | 5 |
| 1970 | 2,607 | 162 | 8 |
| 1980 | 5,161 | 320 | 17 |
| 1990 | 11,376 | 706 | 38 |
| 2000 | 20,016 | 1243 | 67 |
| 2011 | 2,349 | 1840 | 100 |
GDP per capita of United States:
| Year | Real GDP per Capita($) | Percentage of 1960 real GDP per Capita(%) | Percentage of 2011 real GDP per Capita(%) |
| 1960 | 15,136 | 100 | 66 |
| 1970 | 20,115 | 133 | 48 |
| 1980 | 25,221 | 166 | 60 |
| 1990 | 31,431 | 207 | 74 |
| 2000 | 39,498 | 260 | 93 |
| 2011 | 42,244 | 278 | 100 |
Conclusion:
Thus, real GDP is calculated for every country.
b. Comparison of living standard.
- According to the data calculated in part a. it can be said that the highest rise in standard of living from 1960 to 2011 is of South Korea as its real GDP is 1840% in 2011..
- The growth path of Argentina was less consistent compared to Ghana therefore, it can be said that Argentina has moderate standard of living.
- The Real GDP of the U.S in 2011 has increased to 278%, so the U.S also has moderate standard of living.
Conclusion:
Thus, the highest rise in standard of living is in South Korea.
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Students have asked these similar questions
Tasks
Exercise 1
Assess the following functions:
1. f(x)= x2+6x+2
2.f '(x)=10x-2x2+5
a. Find the stationary points. (5 marks)
b. Determine whether the stationary point is a maximum or minimum. (5 marks)
c. Draw the corresponding curves (5 marks)
Problem 2:
The sales data over the last 10 years for the Acme Hardware Store are as follows:
2003
$230,000
2008
$526,000
2004
276,000
2009
605,000
2005
328,000
2010
690,000
2006
388,000
2011
779,000
2007
453,000
2012
873,000
1. Calculate the compound growth rate for the period of 2003 to 2012.
2. Based on your answer to part a, forecast sales for both 2013 and 2014.
3. Now calculate the compound growth rate for the period of 2007 to 2012.
1. Based on your answer to part e, forecast sales for both 2013 and 2014.
5. What is the major reason for the differences in your answers to parts b and d? If you were to
make your own projections, what would you forecast? (Drawing a graph is very helpful.)
Exercise 4A firm has the following average cost: AC = 200 + 2Q – 36
Q
Find the stationary point and determine if it is a maximum or a minimum.b. Find the marginal cost function.
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