Principles of Macroeconomics 2e
2nd Edition
ISBN: 9781947172388
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 2, Problem 2SCQ
Return to the example in Figure 2.4. Suppose there is an improvement in medical technology that enables more healthcare wilt line same amount of resources. How would this affect the production possibilities curve and, in particular, how would it affect the
Figure 2.4 Productive and
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3. Consider the case of everyone being wealthier in the future, such as from a positive
productivity shock (computers, internet, robotics, AI).
A. Begin from the baseline preferences and endowments.
Give both people an endowment of 1000 pounds for the first period and 1100 pounds for the
second. AI increases the supply of second period goods by 10%.
Note that there is now a total of 2000 pounds in the first period and 2200 pounds in the
second.
Determine the equilibrium interest rate.
r =
%
B. Begin from the baseline preferences and endowments.
Give both people an endowment of 1100 pounds for the first and 1100 pounds for the second
periods. AI increases the supply in all periods by 10%.
Note that there are now 2200 pounds in the first period and 2200 pounds in the second.
Determine the equilibrium interest rate.
r =
%
C. Explain how productivity and the real rate are connected.
Write at least five sentences.
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Chapter 2 Solutions
Principles of Macroeconomics 2e
Ch. 2 - Suppose Alphonsos town raised the price of bus...Ch. 2 - Return to the example in Figure 2.4. Suppose there...Ch. 2 - Could a nation be producing in a way that is...Ch. 2 - What are the similarities between a consumers...Ch. 2 - Individuals may not act in the rational,...Ch. 2 - Would an op-ed piece in a newspaper urging the...Ch. 2 - Would a research study on the effects of soft...Ch. 2 - Explain why scarcity leads to tradeoffs.Ch. 2 - Explain why individuals make Choices that are...Ch. 2 - What is comparative advantage?
Ch. 2 - What does a production possibilities frontier...Ch. 2 - Why is a production possibilities frontier...Ch. 2 - Explain why societies cannot make a choice above...Ch. 2 - What are diminishing marginal returns?Ch. 2 - What is productive efficiency? Allocative...Ch. 2 - What is the difference between a positive and a...Ch. 2 - Is the economic model of decision-making intended...Ch. 2 - What are four responses to the claim that people...Ch. 2 - Suppose Alphonsos town raises the price of bus...Ch. 2 - During the Second World War, Germanys factories...Ch. 2 - It is clear that productive inefficiency is a...Ch. 2 - What assumptions about the economy must he true...Ch. 2 - Do economists have any particular expertise at...Ch. 2 - If the price of a magazine is 4 each, what is the...Ch. 2 - If the price of a pie is 12, what is the maximum...Ch. 2 - Draw Maries budget constraint with pies on the...Ch. 2 - What is Maries opportunity cost of purchasing a...
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