Why an economy’s income must equal its expenditure.

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Answer 1

Question

Chapter 23, Problem 1QR

To determine

Why an economy’s income must equal its expenditure.

Expert Solution & Answer

Explanation of Solution

The economy transacts the goods and services for getting the money in return. This means that the money acts as a medium between the buyers and sellers. When the buyers give money, it is the consumption expenditure of the consumers or the buyers. When the sellers receive money in return for the goods and services that they rendered to the consumers, it becomes their income. Thus, every transaction in the economy has a buyer and a seller, and every expenditure by the buyers turns out to be income of the seller. Therefore, it can be said that an economy’s income must equal its expenditures.

Economics Concept Introduction

Concept introduction:

Expenditure: Total expenditure refers to the total amount of money spent by the firm, individual, or government on a product in a given period of time.

National income: National income refers to the sum of all the income received within a given period of time.

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Students have asked these similar questions

At the 8:10 café, there are equal numbers of two types of customers with the following values. The café owner cannot distinguish between the two types of students because many students without early classes arrive early anyway (that is she cannot price discriminate). Students with early classes Students without early classes Coffee 70 60 Banana 50 100 The MC of coffee is 10. The MC of a banana is 40. Is bundling more profitable than selling separately? HINT: if you sell the bundle, can you make more by offering coffee separately? If so, what price should be charged for the bundle? (Show calculations)

Your marketing department has identified the following customer demographics in the following table. Construct a demand curve and determine the profit maximizing price as well as the expected profit if MC=$1. The number of customers in the target population is 10,000. Use the following demand data: Group Value Frequency Baby boomers $5 20% Generation X $4 10% Generation Y $3 10% `Tweeners $2 10% Seniors $2 10% Others $0 40%

Your marketing department has identified the following customer demographics in the following table. Construct a demand curve and determine the profit maximizing price as well as the expected profit if MC=$1. The number of customers in the target population is 10,000. Group Value Frequency Baby boomers $5 20% Generation X $4 10% Generation Y $3 10% `Tweeners $2 10% Seniors $2 10% Others $0 40% ur marketing department has identified the following customer demographics in the following table. Construct a demand curve and determine the profit maximizing price as well as the expected profit if MC=$1. The number of customers in the target population is 10,000.

Answer 2

Question

Chapter 23, Problem 1QR

To determine

Why an economy’s income must equal its expenditure.

Expert Solution & Answer

Explanation of Solution

The economy transacts the goods and services for getting the money in return. This means that the money acts as a medium between the buyers and sellers. When the buyers give money, it is the consumption expenditure of the consumers or the buyers. When the sellers receive money in return for the goods and services that they rendered to the consumers, it becomes their income. Thus, every transaction in the economy has a buyer and a seller, and every expenditure by the buyers turns out to be income of the seller. Therefore, it can be said that an economy’s income must equal its expenditures.

Economics Concept Introduction

Concept introduction:

Expenditure: Total expenditure refers to the total amount of money spent by the firm, individual, or government on a product in a given period of time.

National income: National income refers to the sum of all the income received within a given period of time.

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Answer 3

Question

Chapter 23, Problem 1QR

To determine

Why an economy’s income must equal its expenditure.

Expert Solution & Answer

Explanation of Solution

The economy transacts the goods and services for getting the money in return. This means that the money acts as a medium between the buyers and sellers. When the buyers give money, it is the consumption expenditure of the consumers or the buyers. When the sellers receive money in return for the goods and services that they rendered to the consumers, it becomes their income. Thus, every transaction in the economy has a buyer and a seller, and every expenditure by the buyers turns out to be income of the seller. Therefore, it can be said that an economy’s income must equal its expenditures.

Economics Concept Introduction

Concept introduction:

Expenditure: Total expenditure refers to the total amount of money spent by the firm, individual, or government on a product in a given period of time.

National income: National income refers to the sum of all the income received within a given period of time.

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Answer 4

Question

Chapter 23, Problem 1QR

To determine

Why an economy’s income must equal its expenditure.

Expert Solution & Answer

Explanation of Solution

The economy transacts the goods and services for getting the money in return. This means that the money acts as a medium between the buyers and sellers. When the buyers give money, it is the consumption expenditure of the consumers or the buyers. When the sellers receive money in return for the goods and services that they rendered to the consumers, it becomes their income. Thus, every transaction in the economy has a buyer and a seller, and every expenditure by the buyers turns out to be income of the seller. Therefore, it can be said that an economy’s income must equal its expenditures.

Economics Concept Introduction

Concept introduction:

Expenditure: Total expenditure refers to the total amount of money spent by the firm, individual, or government on a product in a given period of time.

National income: National income refers to the sum of all the income received within a given period of time.

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Answer 5

Chapter 23, Problem 1QR

To determine

Why an economy’s income must equal its expenditure.

Expert Solution & Answer

Explanation of Solution

The economy transacts the goods and services for getting the money in return. This means that the money acts as a medium between the buyers and sellers. When the buyers give money, it is the consumption expenditure of the consumers or the buyers. When the sellers receive money in return for the goods and services that they rendered to the consumers, it becomes their income. Thus, every transaction in the economy has a buyer and a seller, and every expenditure by the buyers turns out to be income of the seller. Therefore, it can be said that an economy’s income must equal its expenditures.

Economics Concept Introduction

Concept introduction:

Expenditure: Total expenditure refers to the total amount of money spent by the firm, individual, or government on a product in a given period of time.

National income: National income refers to the sum of all the income received within a given period of time.

Answer 6

Chapter 23, Problem 1QR

To determine

Why an economy’s income must equal its expenditure.

Expert Solution & Answer

Explanation of Solution

The economy transacts the goods and services for getting the money in return. This means that the money acts as a medium between the buyers and sellers. When the buyers give money, it is the consumption expenditure of the consumers or the buyers. When the sellers receive money in return for the goods and services that they rendered to the consumers, it becomes their income. Thus, every transaction in the economy has a buyer and a seller, and every expenditure by the buyers turns out to be income of the seller. Therefore, it can be said that an economy’s income must equal its expenditures.

Economics Concept Introduction

Concept introduction:

Expenditure: Total expenditure refers to the total amount of money spent by the firm, individual, or government on a product in a given period of time.

National income: National income refers to the sum of all the income received within a given period of time.

Answer 7

Chapter 23, Problem 1QR

To determine

Why an economy’s income must equal its expenditure.

Answer 8

Expert Solution & Answer

Explanation of Solution

The economy transacts the goods and services for getting the money in return. This means that the money acts as a medium between the buyers and sellers. When the buyers give money, it is the consumption expenditure of the consumers or the buyers. When the sellers receive money in return for the goods and services that they rendered to the consumers, it becomes their income. Thus, every transaction in the economy has a buyer and a seller, and every expenditure by the buyers turns out to be income of the seller. Therefore, it can be said that an economy’s income must equal its expenditures.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Concept introduction:

Expenditure: Total expenditure refers to the total amount of money spent by the firm, individual, or government on a product in a given period of time.

National income: National income refers to the sum of all the income received within a given period of time.

Answer 12

Ch. 23.1 - Prob. 1QQ Ch. 23.2 - Prob. 2QQ Ch. 23.3 - Prob. 3QQ Ch. 23.4 - Prob. 4QQ Ch. 23.5 - Prob. 5QQ Ch. 23 - Prob. 1QR Ch. 23 - Prob. 2QR Ch. 23 - Prob. 3QR Ch. 23 - Prob. 4QR Ch. 23 - Prob. 5QR

Why an economy’s income must equal its expenditure.

Why an economy’s income must equal its expenditure.

Explanation of Solution

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Chapter 23 Solutions