Describe the economic growth that influence the living standard of people.

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Answer 1

Question

Chapter 16, Problem 1CQ

To determine

Describe the economic growth that influence the living standard of people.

Expert Solution & Answer

Explanation of Solution

According to the economist Robert Lucas, to achieve the growth of real income, the growth of real output is essential. Hence, without achieving the growth of real output, the household would not achieve higher income and standards of living.

Suppose the growth of the economy increases, it would lead to an increase in the production possibilities such as efficiency in technological progress, significant allocation of goods and services, and the improvement in efficient and sufficient labor and capital. Due to an increase in the production possibilities, the economy will achieve a higher per capita real GDP. A higher per capita GDP implies that the per capita income of the individual becomes high. Hence, with high income, the households improve their standard of living.

According to the rule of 70, if the economic growth is 2 percent, it will take 35 years (702) to increase the income level. If the economic growth is 4 percent, it will take 17.5 years (704) to increase the income level. Therefore, if the economic growth increases from 2 percent to 4 percent, it will take less number of years to double the income. Therefore, it makes much difference when an economy grows at 2 percent or 4 percent annually.

Economics Concept Introduction

Rule of 70: The rule of 70 explains how long it will take for a variable to double in size.

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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.

Answer 2

Question

Chapter 16, Problem 1CQ

To determine

Describe the economic growth that influence the living standard of people.

Expert Solution & Answer

Explanation of Solution

According to the economist Robert Lucas, to achieve the growth of real income, the growth of real output is essential. Hence, without achieving the growth of real output, the household would not achieve higher income and standards of living.

Suppose the growth of the economy increases, it would lead to an increase in the production possibilities such as efficiency in technological progress, significant allocation of goods and services, and the improvement in efficient and sufficient labor and capital. Due to an increase in the production possibilities, the economy will achieve a higher per capita real GDP. A higher per capita GDP implies that the per capita income of the individual becomes high. Hence, with high income, the households improve their standard of living.

According to the rule of 70, if the economic growth is 2 percent, it will take 35 years (702) to increase the income level. If the economic growth is 4 percent, it will take 17.5 years (704) to increase the income level. Therefore, if the economic growth increases from 2 percent to 4 percent, it will take less number of years to double the income. Therefore, it makes much difference when an economy grows at 2 percent or 4 percent annually.

Economics Concept Introduction

Rule of 70: The rule of 70 explains how long it will take for a variable to double in size.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 16, Problem 1CQ

To determine

Describe the economic growth that influence the living standard of people.

Expert Solution & Answer

Explanation of Solution

According to the economist Robert Lucas, to achieve the growth of real income, the growth of real output is essential. Hence, without achieving the growth of real output, the household would not achieve higher income and standards of living.

Suppose the growth of the economy increases, it would lead to an increase in the production possibilities such as efficiency in technological progress, significant allocation of goods and services, and the improvement in efficient and sufficient labor and capital. Due to an increase in the production possibilities, the economy will achieve a higher per capita real GDP. A higher per capita GDP implies that the per capita income of the individual becomes high. Hence, with high income, the households improve their standard of living.

According to the rule of 70, if the economic growth is 2 percent, it will take 35 years (702) to increase the income level. If the economic growth is 4 percent, it will take 17.5 years (704) to increase the income level. Therefore, if the economic growth increases from 2 percent to 4 percent, it will take less number of years to double the income. Therefore, it makes much difference when an economy grows at 2 percent or 4 percent annually.

Economics Concept Introduction

Rule of 70: The rule of 70 explains how long it will take for a variable to double in size.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 16, Problem 1CQ

To determine

Describe the economic growth that influence the living standard of people.

Expert Solution & Answer

Explanation of Solution

According to the economist Robert Lucas, to achieve the growth of real income, the growth of real output is essential. Hence, without achieving the growth of real output, the household would not achieve higher income and standards of living.

Suppose the growth of the economy increases, it would lead to an increase in the production possibilities such as efficiency in technological progress, significant allocation of goods and services, and the improvement in efficient and sufficient labor and capital. Due to an increase in the production possibilities, the economy will achieve a higher per capita real GDP. A higher per capita GDP implies that the per capita income of the individual becomes high. Hence, with high income, the households improve their standard of living.

According to the rule of 70, if the economic growth is 2 percent, it will take 35 years (702) to increase the income level. If the economic growth is 4 percent, it will take 17.5 years (704) to increase the income level. Therefore, if the economic growth increases from 2 percent to 4 percent, it will take less number of years to double the income. Therefore, it makes much difference when an economy grows at 2 percent or 4 percent annually.

Economics Concept Introduction

Rule of 70: The rule of 70 explains how long it will take for a variable to double in size.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 16, Problem 1CQ

To determine

Describe the economic growth that influence the living standard of people.

Expert Solution & Answer

Explanation of Solution

According to the economist Robert Lucas, to achieve the growth of real income, the growth of real output is essential. Hence, without achieving the growth of real output, the household would not achieve higher income and standards of living.

Suppose the growth of the economy increases, it would lead to an increase in the production possibilities such as efficiency in technological progress, significant allocation of goods and services, and the improvement in efficient and sufficient labor and capital. Due to an increase in the production possibilities, the economy will achieve a higher per capita real GDP. A higher per capita GDP implies that the per capita income of the individual becomes high. Hence, with high income, the households improve their standard of living.

According to the rule of 70, if the economic growth is 2 percent, it will take 35 years (702) to increase the income level. If the economic growth is 4 percent, it will take 17.5 years (704) to increase the income level. Therefore, if the economic growth increases from 2 percent to 4 percent, it will take less number of years to double the income. Therefore, it makes much difference when an economy grows at 2 percent or 4 percent annually.

Economics Concept Introduction

Rule of 70: The rule of 70 explains how long it will take for a variable to double in size.

Answer 6

Chapter 16, Problem 1CQ

To determine

Describe the economic growth that influence the living standard of people.

Expert Solution & Answer

Explanation of Solution

According to the economist Robert Lucas, to achieve the growth of real income, the growth of real output is essential. Hence, without achieving the growth of real output, the household would not achieve higher income and standards of living.

Suppose the growth of the economy increases, it would lead to an increase in the production possibilities such as efficiency in technological progress, significant allocation of goods and services, and the improvement in efficient and sufficient labor and capital. Due to an increase in the production possibilities, the economy will achieve a higher per capita real GDP. A higher per capita GDP implies that the per capita income of the individual becomes high. Hence, with high income, the households improve their standard of living.

According to the rule of 70, if the economic growth is 2 percent, it will take 35 years (702) to increase the income level. If the economic growth is 4 percent, it will take 17.5 years (704) to increase the income level. Therefore, if the economic growth increases from 2 percent to 4 percent, it will take less number of years to double the income. Therefore, it makes much difference when an economy grows at 2 percent or 4 percent annually.

Economics Concept Introduction

Rule of 70: The rule of 70 explains how long it will take for a variable to double in size.

Answer 7

Chapter 16, Problem 1CQ

To determine

Describe the economic growth that influence the living standard of people.

Answer 8

Expert Solution & Answer

Explanation of Solution

According to the economist Robert Lucas, to achieve the growth of real income, the growth of real output is essential. Hence, without achieving the growth of real output, the household would not achieve higher income and standards of living.

Suppose the growth of the economy increases, it would lead to an increase in the production possibilities such as efficiency in technological progress, significant allocation of goods and services, and the improvement in efficient and sufficient labor and capital. Due to an increase in the production possibilities, the economy will achieve a higher per capita real GDP. A higher per capita GDP implies that the per capita income of the individual becomes high. Hence, with high income, the households improve their standard of living.

According to the rule of 70, if the economic growth is 2 percent, it will take 35 years (702) to increase the income level. If the economic growth is 4 percent, it will take 17.5 years (704) to increase the income level. Therefore, if the economic growth increases from 2 percent to 4 percent, it will take less number of years to double the income. Therefore, it makes much difference when an economy grows at 2 percent or 4 percent annually.