The increase in GDP if the computer company buys parts from a local distributor.

Question

Sam's profit is maximized when he produces shirts. When he does this, the marginal cost of the last shirt he produces is , which is than the price Sam receives for each shirt he sells. The marginal cost of producing an additional shirt (that is, one more shirt than would maximize his profit) is , which is than the price Sam receives for each shirt he sells. Therefore, Sam's profit-maximizing quantity corresponds to the intersection of the curves. Because Sam is a price taker, this last condition can also be written as .

Answer 1

Question

Chapter 2, Problem 3E

(a)

To determine

The increase in GDP if the computer company buys parts from a local distributor.

(b)

To determine

The increase in GDP if the agent earns a commission of $6,000.

(c)

To determine

What happens to GDP during recession.

(d)

To determine

What happens to GDP if the US airlines purchase and import $50 million worthy of airplanes from the European company.

(e)

To determine

What happen to GDP if new European airlines purchase $50 million from the Americcan company.

(f)

To determine

What happens to GDP if the store buys chocolate from Country B and sells it to the US for $125,000.

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Sam's profit is maximized when he produces shirts. When he does this, the marginal cost of the last shirt he produces is , which is than the price Sam receives for each shirt he sells. The marginal cost of producing an additional shirt (that is, one more shirt than would maximize his profit) is , which is than the price Sam receives for each shirt he sells. Therefore, Sam's profit-maximizing quantity corresponds to the intersection of the curves. Because Sam is a price taker, this last condition can also be written as .

Why must total spending be equal to total income in an economy? Total income plus total spending equals total output. The value-added measurement of GDP shows this is true. Every dollar that someone spends is a dollar of income for someone else. all of the above

Labor Market Data Price $5 $10 $15 $20 $25 3,000,000 6,000,000 9,000,000 12,000,000 15,000,000 Qd 15,000,000 12,000,000 9,000,000 6,000,000 3,000,000 Price $30 $25 $20 $15 $10 $5 + +- x- 3 6 Do + + F 9 12 15 Quantity (In millions) Area of a triangle = 1/2* base *height Market Efficiency & Total Surplus Worth Publishers SCENARIO: The state government is considering raising the minimum wage from $15 per hour to $20 per hour over the next 3 years. As an economic advisor to the governor, you have been asked to provide a recommendation on whether the minimum wage should be increased based on economic theory. Consider the labor market data provided. Prepare a brief report that: 1. Explains whether the labor market is currently efficient at the equilibrium wage of $15 per hour. How would you know? At equilibrium, what (dollar amount) is the Total Surplus this market provides? Show your rationale with numbers. 2. Analyzes the impact on total surplus in the market if the minimum wage is raised…

Answer 2

Question

Chapter 2, Problem 3E

(a)

To determine

The increase in GDP if the computer company buys parts from a local distributor.

(b)

To determine

The increase in GDP if the agent earns a commission of $6,000.

(c)

To determine

What happens to GDP during recession.

(d)

To determine

What happens to GDP if the US airlines purchase and import $50 million worthy of airplanes from the European company.

(e)

To determine

What happen to GDP if new European airlines purchase $50 million from the Americcan company.

(f)

To determine

What happens to GDP if the store buys chocolate from Country B and sells it to the US for $125,000.

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Answer 3

Question

Chapter 2, Problem 3E

(a)

To determine

The increase in GDP if the computer company buys parts from a local distributor.

(b)

To determine

The increase in GDP if the agent earns a commission of $6,000.

(c)

To determine

What happens to GDP during recession.

(d)

To determine

What happens to GDP if the US airlines purchase and import $50 million worthy of airplanes from the European company.

(e)

To determine

What happen to GDP if new European airlines purchase $50 million from the Americcan company.

(f)

To determine

What happens to GDP if the store buys chocolate from Country B and sells it to the US for $125,000.

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Answer 4

Question

Chapter 2, Problem 3E

(a)

To determine

The increase in GDP if the computer company buys parts from a local distributor.

(b)

To determine

The increase in GDP if the agent earns a commission of $6,000.

(c)

To determine

What happens to GDP during recession.

(d)

To determine

What happens to GDP if the US airlines purchase and import $50 million worthy of airplanes from the European company.

(e)

To determine

What happen to GDP if new European airlines purchase $50 million from the Americcan company.

(f)

To determine

What happens to GDP if the store buys chocolate from Country B and sells it to the US for $125,000.

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Answer 5

Chapter 2, Problem 3E

(a)

To determine

The increase in GDP if the computer company buys parts from a local distributor.

(b)

To determine

The increase in GDP if the agent earns a commission of $6,000.

(c)

To determine

What happens to GDP during recession.

(d)

To determine

What happens to GDP if the US airlines purchase and import $50 million worthy of airplanes from the European company.

(e)

To determine

What happen to GDP if new European airlines purchase $50 million from the Americcan company.

(f)

To determine

What happens to GDP if the store buys chocolate from Country B and sells it to the US for $125,000.

Answer 6

Chapter 2, Problem 3E

(a)

To determine

The increase in GDP if the computer company buys parts from a local distributor.

Answer 7

Chapter 2, Problem 3E

(a)

To determine

The increase in GDP if the computer company buys parts from a local distributor.

Answer 8

(b)

To determine

The increase in GDP if the agent earns a commission of $6,000.

Answer 9

(b)

To determine

The increase in GDP if the agent earns a commission of $6,000.

Answer 10

(c)

To determine

What happens to GDP during recession.

Answer 11

(c)

To determine

What happens to GDP during recession.

Answer 12

(d)

To determine

What happens to GDP if the US airlines purchase and import $50 million worthy of airplanes from the European company.

Answer 13

(d)

To determine

What happens to GDP if the US airlines purchase and import $50 million worthy of airplanes from the European company.

Answer 14

(e)

To determine

What happen to GDP if new European airlines purchase $50 million from the Americcan company.

Answer 15

(e)

To determine

What happen to GDP if new European airlines purchase $50 million from the Americcan company.

Answer 16

(f)

To determine

What happens to GDP if the store buys chocolate from Country B and sells it to the US for $125,000.

Answer 17

(f)

To determine

What happens to GDP if the store buys chocolate from Country B and sells it to the US for $125,000.

Answer 18

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Ch. 2 - Prob. 1RQ Ch. 2 - Prob. 2RQ Ch. 2 - Prob. 3RQ Ch. 2 - Prob. 4RQ Ch. 2 - Prob. 1E Ch. 2 - Prob. 2E Ch. 2 - Prob. 3E Ch. 2 - Prob. 4E Ch. 2 - Prob. 5E Ch. 2 - Prob. 6E

The increase in GDP if the computer company buys parts from a local distributor.

The increase in GDP if the computer company buys parts from a local distributor.

The increase in GDP if the agent earns a commission of $6,000.

What happens to GDP during recession.

What happens to GDP if the US airlines purchase and import $50 million worthy of airplanes from the European company.

What happen to GDP if new European airlines purchase $50 million from the Americcan company.

What happens to GDP if the store buys chocolate from Country B and sells it to the US for $125,000.

Chapter 2 Solutions