Question

In: Economics

Suppose that the table below shows an economy’s relationship between real output and the inputs needed...

Suppose that the table below shows an economy’s relationship between real output and the inputs needed to produce that output:

Input Quantity Real GDP
75 $400
56.25 300
37.5 200


a. What is the level of productivity in this economy?

Instructions: Round your answer to two decimal places.
( )


b. What is the per-unit cost of production if the price of each input unit is $3?

Instructions: Round your answer to two decimal places.

( ) $  

c. Assume that the input price increases from $3 to $4 with no accompanying change in productivity.

What is the new per-unit cost of production?

Instructions: Round your answer to two decimal places.

( ) $  

In what direction would the $1 increase in input price push the economy’s aggregate supply curve?

The aggregate supply curve would shift to the  (select left or right ) .

What effect would this shift of aggregate supply have on the price level and the level of real output? ( select:  Price level would increase and real output would decrease. or Price level would decrease and real output would remain the same. or Price level would decrease and real output would increase. or Both price level and real output would remain the same. )  

d. Suppose that the increase in input price does not occur but, instead, that productivity increases by 75% percent. What would be the new per-unit cost of production?

Instructions: Round your answer to three decimal places.

( ) $  

What effect would this change in per-unit production cost have on the economy’s aggregate supply curve?

The aggregate supply curve will shift to the  (select left or right ) .

What effect would this shift of aggregate supply have on the price level and the level of real output? (select : Price level would decrease and real output would increase. or Price level would increase and real output would decrease. or Price level would decrease and real output would remain the same. or Both price level and real output would remain the same. )

Solutions

Expert Solution


Related Solutions

Suppose that the table below shows an economy’s relationship between real output and the inputs needed...
Suppose that the table below shows an economy’s relationship between real output and the inputs needed to produce that output: Input Quantity Real GDP 75.00 $400 56.25 300 37.50 200 a. What is the level of productivity in this economy? Instructions: Round your answer to two decimal places. b. What is the per-unit cost of production if the price of each input unit is $5? Instructions: Round your answer to two decimal places. $ c. Assume that the input price...
Suppose that the table below shows an economy’s relationship between real output and the inputs needed...
Suppose that the table below shows an economy’s relationship between real output and the inputs needed to produce that output: Input Quantity Real GDP 300.00 $400 225.00 300 150.00 200 a. What is the level of productivity in this economy? Instructions: Round your answer to two decimal places. b. What is the per-unit cost of production if the price of each input unit is $3? Instructions: Round your answer to two decimal places. $ c. Assume that the input price...
The table below shows the weekly relationship between output and number of workers for a factory...
The table below shows the weekly relationship between output and number of workers for a factory with a fixed size of plant.Number of Workers Output001502110330044505590666577008725971010705a. Calculate the marginal product of labor. b. At what point do diminishing returns set in? Explain. c. Based on the table above, if the wage rate is $500.00 and the price of output is $5, how many workers should the firm hire?
The following table shows the daily relationship between the number of workers and output​ (Q) for...
The following table shows the daily relationship between the number of workers and output​ (Q) for a small factory in the short​ run, with capital held constant. Each worker costs ​$200 per​ day, and the firm has fixed costs of ​$100 per day. Calculate total cost​ (TC), marginal cost​ (MC), and average total cost​ (ATC).  ​(Round your answers to two decimal​ places.) WORKERS Q TC    MC ATC 1 20 ? ? ? 2 44 ? ? ? 3 70...
Suppose that a hypothetical economy has the following relationship between its real domestic output and the...
Suppose that a hypothetical economy has the following relationship between its real domestic output and the input quantities necessary for producing that level of output. Input quantity Real domestic output 400 800 300 600 100 200 (a)   What is the level of productivity in this economy? (b)   What is the unit cost of production if the price of each input is $2.00?
Now suppose a technological change increases the economy’s output by $2,200 billion. The real wage rises...
Now suppose a technological change increases the economy’s output by $2,200 billion. The real wage rises to $21,500. In response, the number of labour increases to 51 million workers. In the same three panels, you have already drawn, sketch the new curves that result from this change. Explain what happens to the level of employment, the level of potential output, and the long-run aggregate supply curve.
The table below shows aggregate values for a hypothetical economy. Suppose that this economy has real...
The table below shows aggregate values for a hypothetical economy. Suppose that this economy has real GDP equal to potential output. Potential GDP $2500 Net Tax Revenues $50 Government Purchases $200 Investment $100 Consumption $2350 Net Exports -$135 TABLE 26-1 Refer to Table 26-1. What is the level of private saving for this economy? Question 2 options: A) $50 B) $300 C) $150 D) $100 E) $200
Table below shows a relationship between the temperature and number of traffic accidents in small town...
Table below shows a relationship between the temperature and number of traffic accidents in small town for a sample of 7 different days.  [4+2+4+2=12pts] Temperature (in Celsius degrees )... x 32 13 24 20 10 4 36 # of traffic accidents  ...y 7 4 9 11 3 5 8 Find a correlation coefficient r, round it to 4 decimal places. Describe the direction and strength of this association: ………………………… Find the equation of regression line. Sketch it graphically, find/display values of both...
The following table shows a part of the daily labor-output relationship for a firm. In this...
The following table shows a part of the daily labor-output relationship for a firm. In this table q is the quantity of output produced and L the amount of labor required to produce the corresponding level of output. For example, to produce 2 units of output per day we need a total of 50 units of labor and to produce 5 units per day we need a total of 120 units of labor. The wage rate is $40 per day...
The following table shows a part of the daily labor-output relationship for a firm. In this...
The following table shows a part of the daily labor-output relationship for a firm. In this table q is the quantity of output produced and L the amount of labor required to produce the corresponding level of output. For example, to produce 2 units of output per day we need a total of 50 units of labor and to produce 5 units per day we need a total of 120 units of labor. The wage rate is $40 per day...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT