The correct option.

Question

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Answer 1

Question

Chapter 2, Problem 1QQ

To determine

The correct option.

Expert Solution & Answer

Answer to Problem 1QQ

Option ‘b’ is the correct answer.

Explanation of Solution

Option (b):

The nominal gross domestic product measures the value of economy’s total output at present price level and is a flow variable. This nominal GDP measures the output in a particular time period. A variable that measures with the reference of time period is called flow variable. Thus, option (b) is correct.

Option (a):

The nominal GDP measures the economic output in a particular time period, so it is a flow variable (a variable that measures with the reference of time period), not a stock variable (a variable that measurable at a point of time). Thus, option (a) is incorrect.

Option (c):

The value of the economy’s output measured at current price in a particular time period is called nominal GDP. Thus, option (c) is incorrect.

Option (d):

Nominal GDP measures the economic output at current price in a particular time period. Usually, it is for one year not based on a particular point of time. Thus, option (d) is incorrect.

Economics Concept Introduction

Nominal GDP (Gross Domestic Product): Nominal GDP measures the value of economy’s total output in a particular time period.

Flow variable: A flow variable is a variable that can be measured with reference to a period of time.

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Problem 3 You are given the following demand for European luxury automobiles: Q=1,000 P-0.5.2/1.6 where P-Price of European luxury cars PA = Price of American luxury cars P, Price of Japanese luxury cars I= Annual income of car buyers Assume that each of the coefficients is statistically significant (i.e., that they passed the t-test). On the basis of the information given, answer the following questions 1. Comment on the degree of substitutability between European and American luxury cars and between European and Japanese luxury cars. Explain some possible reasons for the results in the equation. 2. Comment on the coefficient for the income variable. Is this result what you would expect? Explain. 3. Comment on the coefficient of the European car price variable. Is that what you would expect? Explain.

Problem 2: A manufacturer of computer workstations gathered average monthly sales figures from its 56 branch offices and dealerships across the country and estimated the following demand for its product: Q=+15,000-2.80P+150A+0.3P+0.35Pm+0.2Pc (5,234) (1.29) (175) (0.12) (0.17) (0.13) R²=0.68 SER 786 F=21.25 The variables and their assumed values are P = Price of basic model = 7,000 Q==Quantity A = Advertising expenditures (in thousands) = 52 P = Average price of a personal computer = 4,000 P. Average price of a minicomputer = 15,000 Pe Average price of a leading competitor's workstation = 8,000 1. Compute the elasticities for each variable. On this basis, discuss the relative impact that each variable has on the demand. What implications do these results have for the firm's marketing and pricing policies? 2. Conduct a t-test for the statistical significance of each variable. In each case, state whether a one-tail or two-tail test is required. What difference, if any, does it make to…

Answer 2

Question

Chapter 2, Problem 1QQ

To determine

The correct option.

Expert Solution & Answer

Answer to Problem 1QQ

Option ‘b’ is the correct answer.

Explanation of Solution

Option (b):

The nominal gross domestic product measures the value of economy’s total output at present price level and is a flow variable. This nominal GDP measures the output in a particular time period. A variable that measures with the reference of time period is called flow variable. Thus, option (b) is correct.

Option (a):

The nominal GDP measures the economic output in a particular time period, so it is a flow variable (a variable that measures with the reference of time period), not a stock variable (a variable that measurable at a point of time). Thus, option (a) is incorrect.

Option (c):

The value of the economy’s output measured at current price in a particular time period is called nominal GDP. Thus, option (c) is incorrect.

Option (d):

Nominal GDP measures the economic output at current price in a particular time period. Usually, it is for one year not based on a particular point of time. Thus, option (d) is incorrect.

Economics Concept Introduction

Nominal GDP (Gross Domestic Product): Nominal GDP measures the value of economy’s total output in a particular time period.

Flow variable: A flow variable is a variable that can be measured with reference to a period of time.

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

Answer 3

Question

Chapter 2, Problem 1QQ

To determine

The correct option.

Expert Solution & Answer

Answer to Problem 1QQ

Option ‘b’ is the correct answer.

Explanation of Solution

Option (b):

The nominal gross domestic product measures the value of economy’s total output at present price level and is a flow variable. This nominal GDP measures the output in a particular time period. A variable that measures with the reference of time period is called flow variable. Thus, option (b) is correct.

Option (a):

The nominal GDP measures the economic output in a particular time period, so it is a flow variable (a variable that measures with the reference of time period), not a stock variable (a variable that measurable at a point of time). Thus, option (a) is incorrect.

Option (c):

The value of the economy’s output measured at current price in a particular time period is called nominal GDP. Thus, option (c) is incorrect.

Option (d):

Nominal GDP measures the economic output at current price in a particular time period. Usually, it is for one year not based on a particular point of time. Thus, option (d) is incorrect.

Economics Concept Introduction

Nominal GDP (Gross Domestic Product): Nominal GDP measures the value of economy’s total output in a particular time period.

Flow variable: A flow variable is a variable that can be measured with reference to a period of time.

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

Answer 4

Question

Chapter 2, Problem 1QQ

To determine

The correct option.

Expert Solution & Answer

Answer to Problem 1QQ

Option ‘b’ is the correct answer.

Explanation of Solution

Option (b):

The nominal gross domestic product measures the value of economy’s total output at present price level and is a flow variable. This nominal GDP measures the output in a particular time period. A variable that measures with the reference of time period is called flow variable. Thus, option (b) is correct.

Option (a):

The nominal GDP measures the economic output in a particular time period, so it is a flow variable (a variable that measures with the reference of time period), not a stock variable (a variable that measurable at a point of time). Thus, option (a) is incorrect.

Option (c):

The value of the economy’s output measured at current price in a particular time period is called nominal GDP. Thus, option (c) is incorrect.

Option (d):

Nominal GDP measures the economic output at current price in a particular time period. Usually, it is for one year not based on a particular point of time. Thus, option (d) is incorrect.

Economics Concept Introduction

Nominal GDP (Gross Domestic Product): Nominal GDP measures the value of economy’s total output in a particular time period.

Flow variable: A flow variable is a variable that can be measured with reference to a period of time.

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Answer 5

Chapter 2, Problem 1QQ

To determine

The correct option.

Expert Solution & Answer

Answer to Problem 1QQ

Option ‘b’ is the correct answer.

Explanation of Solution

Option (b):

The nominal gross domestic product measures the value of economy’s total output at present price level and is a flow variable. This nominal GDP measures the output in a particular time period. A variable that measures with the reference of time period is called flow variable. Thus, option (b) is correct.

Option (a):

The nominal GDP measures the economic output in a particular time period, so it is a flow variable (a variable that measures with the reference of time period), not a stock variable (a variable that measurable at a point of time). Thus, option (a) is incorrect.

Option (c):

The value of the economy’s output measured at current price in a particular time period is called nominal GDP. Thus, option (c) is incorrect.

Option (d):

Nominal GDP measures the economic output at current price in a particular time period. Usually, it is for one year not based on a particular point of time. Thus, option (d) is incorrect.

Economics Concept Introduction

Nominal GDP (Gross Domestic Product): Nominal GDP measures the value of economy’s total output in a particular time period.

Flow variable: A flow variable is a variable that can be measured with reference to a period of time.

Answer 6

Chapter 2, Problem 1QQ

To determine

The correct option.

Expert Solution & Answer

Answer to Problem 1QQ

Option ‘b’ is the correct answer.

Explanation of Solution

Option (b):

The nominal gross domestic product measures the value of economy’s total output at present price level and is a flow variable. This nominal GDP measures the output in a particular time period. A variable that measures with the reference of time period is called flow variable. Thus, option (b) is correct.

Option (a):

The nominal GDP measures the economic output in a particular time period, so it is a flow variable (a variable that measures with the reference of time period), not a stock variable (a variable that measurable at a point of time). Thus, option (a) is incorrect.

Option (c):

The value of the economy’s output measured at current price in a particular time period is called nominal GDP. Thus, option (c) is incorrect.

Option (d):

Nominal GDP measures the economic output at current price in a particular time period. Usually, it is for one year not based on a particular point of time. Thus, option (d) is incorrect.

Economics Concept Introduction

Nominal GDP (Gross Domestic Product): Nominal GDP measures the value of economy’s total output in a particular time period.

Flow variable: A flow variable is a variable that can be measured with reference to a period of time.

Answer 7

Chapter 2, Problem 1QQ

To determine

The correct option.

Answer 8

Expert Solution & Answer

Answer to Problem 1QQ

Option ‘b’ is the correct answer.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Option (b):

The nominal gross domestic product measures the value of economy’s total output at present price level and is a flow variable. This nominal GDP measures the output in a particular time period. A variable that measures with the reference of time period is called flow variable. Thus, option (b) is correct.

Option (a):

The nominal GDP measures the economic output in a particular time period, so it is a flow variable (a variable that measures with the reference of time period), not a stock variable (a variable that measurable at a point of time). Thus, option (a) is incorrect.

Option (c):

The value of the economy’s output measured at current price in a particular time period is called nominal GDP. Thus, option (c) is incorrect.

Option (d):

Nominal GDP measures the economic output at current price in a particular time period. Usually, it is for one year not based on a particular point of time. Thus, option (d) is incorrect.