ECONOMICS W/CONNECT+20 >C<
20th Edition
ISBN: 9781259714993
Author: McConnell
Publisher: MCG CUSTOM
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Chapter 20, Problem 1RQ
To determine
Taxes.
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4. The table below shows the labor requirements for Mr. and Mrs.
Howell for pineapples and coconuts. Which is the most accurate
statement?
A. Mrs. Howell has a comparative advantage in coconuts and the
opportunity cost of 1 coconut for Mrs. Howell is 4 pineapples
B. Mrs. Howell has a comparative advantage in pineapples and the
opportunity cost of 1 pineapple for Mrs. Howell is .25 coconuts.
C. Mr. Howell has a comparative advantage in pineapples and the
opportunity cost of 1 pineapple is 1 coconut.
D. Mr. Howell has a comparative advantage in both pineapples and
coconuts and should specialize in pineapples.
Labor Requirements for Pineapples and Coconuts
1 Pineapple
1 Coconut
Mr. Howell
1 hour
1 hour
Mrs. Howell
1/2 hour
2 hours
4. Supply and Demand. The table gives hypothetical data for the quantity of
electric scooters demanded and supplied per month.
Price per
Electric Scooter
Quantity
Quantity
Demanded
Supplied
$150
500
250
$175
475
350
$200
450
450
$225
425
550
$250
400
650
$275
375
750
a. Graph the demand and supply curves. Note if you prefer to hand draw
separately, you may and insert the picture separately.
Price per
Scooter
300
275
250
225
200
175
150
250
400
375425475
350 450
550 650 750
500
850 Quantity
b. Find the equilibrium price and quantity using the graph above.
c. Illustrate on your graph how an increase in the wage rate paid to scooter
assemblers would affect the market for electric scooters. Label any new lines in
the same graph above to distinguish changes.
d. What would happen if there was an increase in the wage rate paid to scooter
assemblers at the
same time that tastes for electric scooters increased?
1ང
3. Production Costs
Clean 'n' Shine is a competitor to Spotless Car Wash. Like Spotless, it must pay $150 per day for
each automated line it uses. But Clean 'n' Shine has been able to tap into a lower-cost pool of labor,
paying its workers only $100 per day. Clean 'n' Shine's production technology is given in the
following table. To determine its short-run cost structure, fill in the blanks in the table.
Fill in the columns below.
Outpu Capita Labor TFC
TVC
TC
MC
AFC
AVC
ATC
1 0
30
1 1
70 1 2
120
1 3
160
1
4
190
1 5
210
1 6
a. Over what range of output does Clean 'n' Shine experience increasing
marginal returns to labor? Over what range does it experience diminishing
marginal returns to labor? (*answer both questions)
b. As output increases, do average fixed costs behave as described in the text?
Explain.
C. As output increases, do marginal cost, average variable cost, and average
total cost behave as described in the text? Explain.
d. Looking at the numbers in the table, but without…
Chapter 20 Solutions
ECONOMICS W/CONNECT+20 >C<
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Similar questions
- 2. Elasticity and the Minimum Wage - The following graph depicts two labor markets for cashiers. We assume the same supply curve (cashiers respond similarly to wage offers in each city) but different demand functions (employer demand is more elastic – more responsive to wages - in one city than the other, perhaps because one has higher quality retail stores than the other). The y-axis shows hourly wages in dollars; the x-axis shows the number of employees in hundreds. Wage 12 11 29 10 9 00 8 7 Supply 5 4 3 2 1 D2 12 D1 0 0 1 2 3 4 5 6 7 8 9 10 11 12 Employment 11 With minimum wage of 8 dollars: A. What is the equilibrium level of employment before the minimum wage is imposed? B. A) According to the graph and given a minimum wage of 8 dollars, how many workers would employers want to hire if the demand for workers in City #1 looked like D1? B) How does that number compare to the market equilibrium employment? C. A) In City #1 (with demand curve D1), would there be an excess supply of…arrow_forwardThe demand function for organic apples is given by Qd = 20 – 2P while the supply function is given by Qs = 4P – 10.a. Solve for the equilibrium P* and Q*.b. Carefully graph the D & S curves. Include all intercepts and P* and Q* (**enlarge your graph so you can better show the questions below use graphing paper**)i. Suppose that the government legislates a $1/gallon to be collected from the buyer. Identify the new equation for the demand curve. Plot the new demand curve (on the same graph as b).ii. Solve for the new equilibrium PT* and QT* and indicate on your graph. On the same graph, indicate the P that consumers pay (PC) and the P that producers get to keep (PS).c. On another graph with the original D and S curves, impose the same tax ($1/gallon) to sellers. Identify the new equation for the supply curve. Plot the new supply curve. i. Solve for the new equilibrium PT* and QT* and indicate on your graph. On thesame graph, indicate the P that consumers pay (PC) and the P that…arrow_forwardDon't use ai to answer I will report you answerarrow_forward
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- Published in 1980, the book Free to Choose discusses how economists Milton Friedman and Rose Friedman proposed a one-sided view of the benefits of a voucher system. However, there are other economists who disagree about the potential effects of a voucher system.arrow_forwardThe following diagram illustrates the demand and marginal revenue curves facing a monopoly in an industry with no economies or diseconomies of scale. In the short and long run, MC = ATC. a. Calculate the values of profit, consumer surplus, and deadweight loss, and illustrate these on the graph. b. Repeat the calculations in part a, but now assume the monopoly is able to practice perfect price discrimination.arrow_forwardThe projects under the 'Build, Build, Build' program: how these projects improve connectivity and ease of doing business in the Philippines?arrow_forward
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