MACROECONOMICS >C< W/MYECONLAB
18th Edition
ISBN: 9781323886038
Author: Pearson
Publisher: Pearson Custom Publishing
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Chapter 6, Problem 1.1P
To determine
To define double counting and its impact on
Expert Solution & Answer
Explanation of Solution
Double counting is the phenomenon which occurs when the price of an intermediate commodity is counted twice. An intermediate is defined as a commodity which is used for further production of some other good. GDP is calculated as the total value of all final goods and services produced within the territory of a country in a given financial year.
The total sales include the sale of intermediate goods also. GDP is different from the total sales because the total sales include intermediate goods while the GDP takes into account only final goods.
Economics Concept Introduction
Concept Introduction:
Double counting: Double counting is an accounting error in which the value of intermediate goods are accounted more than one time.
GDP (Gross Domestic Product): GDP refers to the market value of all final goods and services that are produced in an economy during an accounting year. It is equated as
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Elasticity Problems
Cross Price Elasticity (Exy)
(QDX-QDo/[(QDN+QDDA)/2]
(P-POR/[(PNE+POB)/2]¯¯
11. QD of good A falls from 100 to 90 as the price of good B rose from $10 to $20.
Calculate coefficient:
(90-100) [(90+100) 21-10/95-105 - -.158
(20-10)/[(20+10)/2]
10/15
.667
Cite Elasticity: inclastic
Typs of good: complement
12. QD of good A rose from 300 to 400 as the price good K increased from $1 to $2.
Calculate coefficient
Cite Elasticity:
Ixps of reed:
13. QD for good I falls from 2000 to 1500 units as price of good Krose from $10 to $15.
Calculate coefficient:
Cite Elasticity:
Type of good:
14. QD for good X rose from 100 to 101 units as price of good Y increases from, $8 to $15.
Calculate coefficient:
Cite Elasticity:
Type of paed:
Page 124 (368)
Value of
Coefficient
Description
Positive (0)
Negative (L*0)
Type of Good(s)
Substitute
Quantity Demanded of W changes in same direction a change in price if Z
Quantity Demanded of W changes in opposite direction as change in price if Z…
Use production theory to graphically illustrate the case in which a medical innovation improves health without any change in the consumption of medical care.
Chapter 6 Solutions
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