New Semester Started Get 50% OFF Study Help! --h --m --s Claim Now

Question Answers

Textbooks

Find textbooks, questions and answers

Oops, something went wrong!

Change your search query and then try again

Result Not Found

Books FREE
Study Help
Tutors
AI Study Planner NEW
Sell Books

Search
Sign In
Register

study help
business
economics

Macroeconomics Principles and Applications 5th edition Robert e. hall, marc Lieberman - Solutions

Consider Kylie, who has been awarded academic scholarships covering all tuition and fees at three different colleges. College #1 is a two-year public college. College #2 is a four-year public college, and College #3 is a four-year private college. Explain why, if the decision is based solely on
Redraw Figure, but this time identifies a different set of points along the frontier. Starting at point F (5,000 tanks, zero production of wheat), have each point you select show equal increments in the quantity of wheat produced. For example, a new point H should correspond to 200,000 bushels of
How would a technological innovation in lifesaving€”say, the discovery of a cure for cancer€”affect the PPF inFigure?
Suppose the Internet enables more production of other goods and helps to save lives (for simplicity, assume proportional increases). Show how the PPF in Figure would beaffected.
Suppose that one day, Gilligan (the castaway) eats a magical island plant that turns him into an expert at everything. In particular, it now takes him just half an hour to pick a quart of berries, and 15 minutes to catch a fish.a. Redo Table in the chapter.b. Whoâ€”Gilligan or
Suppose that two different castaways, Mr. and Mrs. Howell, end up on a different island. Mr. Howell can pick 1 pineapple per hour, or 1 coconut. Mrs. Howell can pick 2 pineapples per hour, but it takes her two hours to pick a coconut.a. Construct a table like Table showing Mr. and Mrs.
You and a friend have decided to work jointly on a course project. Frankly, your friend is a less-than ideal partner. His skills as a researcher are such that he can review and outline only two articles a day. Moreover, his hunt-and-peck style limits him to only 10 pages of typing a day. On the
Suppose that an economy’s PPF is a straight line, rather than a bowed out, concave curve. What would this say about the nature of opportunity cost as production is shifted from one good to the other?
Go back to Table in the chapter, which is based on the hourâ€™s requirements in Table. Suppose that when trade opens up between the U.S. and China, the U.S. increases its production of soybeans by 100 bushels (instead of 10 as in the table). China increases its production of T-shirts by 400
One might think that performing a mammogram once each year€”as opposed to once every three years€”would triple the cost per life saved. But according to Table, performing the exam annually raises the cost per life-year saved by about 40 times. Does this make sense?Explain.
Consider the following statement: “In late 2008, as at other times in history, oil prices came down at the same time as the quantity of oil produced fell. Therefore, one way for us to bring down oil prices is to slow down oil production.” True or false? Explain.
In the late 1990s and through 2000, the British public became increasingly concerned about “Mad Cow Disease,” which could be deadly to humans if they ate beef from these cattle. Fearing the disease, many consumers switched to other meats, like chicken, pork, or lamb. At the same time, the
Discuss, and illustrate with a graph, how each of the following events will affect the market for coffee:a. A blight on coffee plants kills off much of the Brazilian crop.b. The price of tea declines.c. Coffee workers organize themselves into a union and gain higher wages.d. Coffee is shown to
The following table gives hypothetical data for the quantity of two-bedroom rental apartments demanded and supplied in Peoria, Illinois:a. Graph the demand and supply curves. b. Find the equilibrium price and quantity.c. Explain briefly why a rent of $1,000 cannot be the equilibrium in this
The following table gives hypothetical data for the quantity of alarm clocks demanded and supplied per month.a. Graph the demand and supply curves.b. Find the equilibrium price and quantity.c. Illustrate on your graph how a decrease in the price of telephone wake-up services would affect the market
The table at the end of this problem gives hypothetical data for the quantity of electric scooters demanded and supplied per month.a. Graph the demand and supply curves.b. Find the equilibrium price and quantity.c. Illustrate on your graph how an increase in the wage rate paid to scooter assemblers
The following table gives hypothetical data for the quantity of gasoline demanded and supplied in Los Angeles per month.a. Graph the demand and supply curves.b. Find the equilibrium price and quantity.c. Illustrate on your graph how a rise in the price of automobiles would affect the gasolinemarket.
How would each of the following affect the market for blue jeans in the United States? Illustrate each answer with a supply and demand diagram.a. The price of denim cloth increases.b. An economic slowdown in the United States causes household incomes to decrease.
Indicate which curve shifted—and in which direction—for each of the following. Assume that only one curve shifts. a. The price of furniture rises as the quantity bought and sold falls.b. Apartment vacancy rates increase while average monthly rent on apartments declines.c. The price of personal
Consider the following forecast: “Next month, we predict that the demand for oranges will continue to increase, which will tend to raise the price of oranges. However, the higher price will increase supply, and a greater supply tends to lower prices. Accordingly, even though we predict that
A couple of months after Hurricane Katrina, an article in The New York Times contained the following passage: “Gasoline prices—the national average is now $2.15, according to the Energy Information Administration—have fallen because higher prices held down demand and Gulf Coast supplies have
Draw supply and demand diagrams for market A for each of the following. Then use your diagrams to illustrate the impact of the following events. In each case, determine what happens to price and quantity in each market.a. A and B are substitutes, and the price of good B rises.b. A and B satisfy the
The Using the Theory section of this chapter points out that when we observe an increase in both price and quantity, we know that the demand curve must have shifted rightward. However, we cannot rule a shift in the supply curve as well. Prove this by drawing a supply and demand graph for each of
In the second half of 2008, as the equilibrium price and quantity of oil both decreased, OPEC succeeded in reducing oil production by its members, but could not prevent the dramatic drop in price. Illustrate both the original equilibrium (before the price drop) and the final equilibrium (after the
Suppose that demand is given by the equation QD = 500 – 50P, where QD is quantity demanded, and P is the price of the good. Supply is described by the equation QS = 50+ 25P, where QS is quantity supplied. What is the equilibrium price and quantity?
While crime rates fell across the country over the past few decades, they fell especially rapidly in Manhattan. At the same time, there were some neighborhoods in the New York metropolitan area in which the crime rate remained constant. Using supply and demand diagrams for rental housing, explain
An analyst observes the following equilibrium price quantity combinations in the market for restaurant meals in a city over a four-year period:She concludes that the market defies the law of demand. Is she correct? Why or whynot?
The market for rice has the following supply and demand schedules:To support rice producers, the government imposes a price floor of $50 per ton.a. What quantity will be traded in the market? Why?b. What steps might the government have to take to enforce the pricefloor?
In Figure, a price ceiling for maple syrup caused a shortage, which led to a black market price ($4) higher than the initial equilibrium price ($3). Suppose that the price ceiling remains in place for years. Over time, some maple syrup firms go out of business. With fewer firms, the supply curve in
In the chapter, you learned that one way the government enforces agricultural price floors is to buy up the excess supply itself. If the government wanted to follow a similar kind of policy to enforce a price ceiling (such as rent control), and thereby prevent black market-type activity, what would
In Figure, prove that the incidence of a $0.60 tax imposed on sellers could not be split equally between buyers and sellers, given the supply and demand curves as drawn.
Figure shows the impact of a $10,000 subsidy on the market for college education when the subsidy is paid to college students. Starting with the same initial supply and demand curves, show what happens when the same $10,000 subsidy per student is paid to the colleges they attend. Suggestion: Trace
State whether each of the following is a stock variable or a flow variable, and explain your answer briefly.a. Total farm acreage in the U.S.b. Total spending on food in Chinac. The total value of U.S. imports from Europed. Worldwide iPhone salese. The total number of parking spaces in Los
Suppose you buy a home for $200,000 with a $20,000 down payment and finance the rest with a home mortgage.a. Suppose that if you default on your mortgage loan, you lose the home, but nothing else. By what percentage would housing prices have to fall to create an economic incentive for you to
Every year, the housing market in Monotone, Arizona, has the same experience: The demand curve for housing shifts rightward by 500 homes, 500 new homes are built, and the price of the average home doesn’t change. Using supply and demand diagrams, illustrate how each of the following new events,
Every year in Houseville, California, builders construct 2,000 new homes—the most the city council will allow them to build. And every year, the demand curve for housing shifts rightward by 2,000 homes as well. Using supply and demand diagrams, illustrate how each of the following new events,
Suppose you buy a home for $400,000 with a $100,000 down payment and finance the rest with a home mortgage.a. Immediately after purchasing your home, before any change in price, what is the value of your equity in the home?b. Immediately after purchasing your home, before any change in price, what
Suppose, as in the previous problem, you buy a home for $400,000 with a down payment of $100,000 and take out a mortgage for the remainder. Over the next three years, the price of the home rises to $500,000. However, during those three years, you also borrow $50,000 in additional funds using the
Suppose, as in the previous problem, you buy a home for $400,000 with a down payment of $100,000 and take out a mortgage for the remainder. Over the next three years, the price of the home rises to $500,000. However, during those three years, you borrow the maximum amount you can borrow without
Could any combination of home price, mortgage, or further borrowing on a home result in a simple leverage ratio of 1/2? If yes, provide an example. If no, briefly explain why.
Using Figure, calculate the price elasticity of demand when gasoline rises from $2 per gallon to $3 per gallon over each of the following time horizons:a. 1 month (from point A to point B)b. 6 months (from point A to point C)c. 12 months (from point A to pointE
Table shows a short-run elasticity of demand for cigarettes. The same study suggested that the long-run elasticity of demand for cigarettes ranges from 1.0 to 2.5. Which is larger—short-run or long-run elasticity? Is this what we would expect? What adjustments might smokers be able to make in the
Some studies suggest that “tooth extraction” is an inferior good. Which measure of elasticity (price elasticity of demand, price-elasticity of supply, income elasticity, or cross-price elasticity) would provide evidence to support this claim? What would we look for in this elasticity measure to
In Table, the price elasticity of demand for Kellogg’s Corn Flakes includes a wide range of estimates. It turns out one end of the range is observed for low income households, while the other is observed for high-income households. Identify which end of the range most likely corresponds to which
The demand for bottled water in a small town is as follows:P (per bottle) QD (bottles per week)$1.00 ............500$1.50 .............400$2.00 .............300$2.50 .............200$3.00 .............100a. Is this a straight-line demand curve? How do you know?b. Calculate the price elasticity of
Sketch a demand curve that is unit elastic for a price change between $9 and $11. Assume that the quantity demanded is 110 when price is $9. You’ll have to determine the quantity demanded when price is $11.
In the chapter, we calculated the likely long-run change in revenue if New York City were to raise mass transit fares from $2.00 to $2.50. Use the same procedure to calculate the short-run impact of this fare hike. This time, use an elasticity of 0.35, which is in the middle of the short run
In the chapter, using an estimate of the short-run elasticity of demand for oil (0.06), we found that a crisis that eliminated half of Persian Gulf oil supplies would cause the world price to rise from $60 to about $125 per barrel in the short run. In the long run, the elasticity of demand for oil
The demand for rosebushes in a market is as follows:Price (per rosebush) Quantity Demanded (rosebushes per week)$10 ..................................
Refer to Table in this chapter and answer the following questions:a. Which is more elastically demanded: cigarettes or pork? Does this make sense to you? Explain briefly.b. If the price of milk rises by 5 percent, what will happen to the quantity demanded? (Be specific.)Rent paid out
Once again, refer to Table in this chapter and answer the following questions:a. Is the demand for recreation more or less elastic than the demand for clothing?b. If 10,000 two-liter bottles of Pepsi are currently being demanded in your community each month, and the price increases from $1.90 to
Three Guys Named Al, a moving company, is contemplating a price hike. Currently, they charge $30 per hour, but Al thinks they could get $40. Al disagrees, saying it will hurt the business. Al, the brains of the outfit, has calculated the price elasticity of demand for their moving services in the
Parvez, a pharmacology student, has allocated $120 per month to spend on paperback novels and used CDs. Novels cost $8 each; CDs cost $6 each. Draw his budget line.a. Draw and label a second budget line that shows what happens when the price of a CD rises to $10.b. Draw and label a third budget
Now go back to the original assumptions of problem 1 (novels cost $8, CDs cost $6, and income is $120). Suppose that Parvez is spending $120 monthly on paperback novels and used CDs. For novels, MU/P=5; for CDs, MU/P = 4. Is he maximizing his utility? If not, should he consume (1) more novels and
Anita consumes both pizza and Pepsi. The following tables show the amount of utility she obtains from different amounts of these two goods:Suppose Pepsi costs $0.50 per can, pizza costs $1 per slice, and Anita has $9 to spend on food and drink. What combination of pizza and Pepsi will maximize
Three people have the following individual demand schedules for Count Chocula cereal that show how many boxes each would purchase monthly at different prices:a. What is the market demand schedule for this cereal? (Assume that these three people are the only buyers.) Draw the market demand curve.b.
Suppose that 1,000 people in a market each have the same monthly demand curve for bottled water, given by the equation QD = 100 – 25P, where P is the price for a 12-ounce bottle in dollars.a. How many bottles would be demanded in the entire market if the price is $1?b. How many bottles would be
What would happen to the market demand curve for polyester suits, an inferior good, if consumers’ incomes rose?
Larsen E. Pulp, head of Pulp Fiction Publishing Co., just got some bad news: The price of paper, the company’s most important input, has increased.a. On a supply/demand diagram, show what will happen to the price of Pulp’s output (novels).b. Explain the resulting substitution and income effects
“If a good is inferior, a rise in its price will cause people to buy more of it, thus violating the law of demand.” True or false? Explain.
Which of the following descriptions of consumer behavior violates the assumption of rational preferences? Explain briefly.a. Joseph is confused: He doesn’t know whether he’d prefer to take a job now or go to college full-time.b. Brenda likes mustard on her pasta, in spite of the fact that pasta
Howard spends all of his income on magazines and novels. Illustrate each of the following situations on a graph, with the quantity of magazines on the vertical axis and the quantity of novels on the horizontal axis. Use two budget lines and two indifference curves on each graph.a. When the price of
In Figure, we assumed that when Maxs income rose, his marginal utility values for any given number of movies or concerts remained the same. But now suppose that when Maxs income rises, and he can consume more movies and concerts, an additional movie has less value to Max than before. In
In Figure, we assumed that when Maxs income rose, his marginal utility values for any given number of movies or concerts remained the same. But now suppose that when Maxs income rises, having the ability to enjoy more concerts or movies makes the last movie and the last concert less valuable to
a. Draw a budget line for Cameron, who has a monthly income of $100. Assume that he buys steak and potatoes, and that steak costs $10 per pound and potatoes cost $2 per pound. Add an indifference curve for Cameron that is tangent to his budget line at the combination of 5 pounds of steak and 25
a. Draw a budget line for Rafaella, who has a weekly income of $30. Assume that she buys chicken and eggs, and that chicken costs $5 per pound while eggs cost $1 each. Add an indifference curve for Rafaella that is tangent to her budget line at the combination of 4 pounds of chicken and 10 eggs.b.
a. Draw a budget line for Lynne, who has a weekly income of $225. Assume that she buys food and clothes, and that food costs $15 per bag while clothes cost $25 per item. Add an indifference curve for Lynne that is tangent to her budget line at the combination of 3 items of clothing and 10 bags of
The Smiths are a low-income family with $10,000 available annually to spend on food and shelter. Food costs $2 per unit, and shelter costs $1 per square foot per year. The Smiths are currently dividing the $10,000 equally between food and shelter. Use either the Marginal Utility Approach or
When an economy is experiencing inflation, the prices of most goods and services are rising but at different rates. Imagine a simpler inflationary situation in which all prices, and all wages and incomes, are rising at the same rate, say 5 percent per year. What would happen to consumer choices in
[Uses the Indifference Curve Approach] With the quantity of popcorn on the vertical axis and the quantity of ice cream on the horizontal axis, draw indifference maps to illustrate each of the following situations.a. Larry’s marginal rate of substitution between ice cream and popcorn remains
[Uses the Indifference Curve Approach] The appendix to this chapter states that when a consumer is buying the optimal combination of two goods x and y, then MRSy,x = Px/ Py. Draw a graph, with an indifference curve and a budget line, and with the quantity of y on the vertical axis, to illustrate
The following table shows total output (in tax returns completed per day) of the accounting firm of Hoodwink and Finagle:Number of Number of ReturnsAccountants per Day0 .......... 01 .......... 52 ..........123 ..........174 ..........205 ..........22Assuming the quantity of capital (computers,
In mid-2009, the Obama administration announced it would cancel orders for a new fleet of presidential helicopters. About $3 billion had already been spent on developing the helicopters, which had special protective and telecommunications features. But another $8 billion would have been needed to
Down On Our Luck Studios has spent $100 million producing an awful film, A Depressing Story about a Miserable Person. If the studio releases the film, the most cost-effective marketing plan would cost an additional $5 million, bringing the total amount spent to $105 million. Box office sales under
The following table gives the short-run and long-run total costs for various levels of output of Consolidated National Acme, Inc.:a. Which column, TC1 or TC2, gives long-run total cost, and which gives short-run total cost? How do you know?b. For each level of output, find short-run TFC, TVC, AFC,
In a recent year, a long, hard winter gave rise to stronger-than-normal demand for heating oil. The following summer was characterized by strong demand for gasoline by vacationers. Show what these two events might have done to the short-run MC, AVC, and ATC curves of Continental Airlines.
A study of immunizing children in poor countries against diphtheria, pertussis, and tetanus estimated that, in the long run, a 10% increase in the number of children vaccinated increases the total cost of vaccinations by 8.4%. According to this study:a. Is immunization over this range characterized
Ludmillaâ€™s House of Schnitzel is currently producing 10 schnitzels a day at point A on the following diagram. Ludmillaâ€™s business partner, Hans (an impatient sort), wants her to double production immediately.a. What point will likely illustrate Ludmillaâ€™s cost situation for the
Clean â€˜nâ€™ Shine is a competitor to Spotless Car Wash. Like Spotless, it must pay $150 per day for each automated line it uses. But Clean â€˜nâ€™ Shine has been able to tap into a lower-cost pool of labor, paying its workers only $100 per day. Clean â€˜nâ€™
In Table, when output rises from 90 to 130 units, marginal cost is $3.00. For this change in output, marginal cost is greater than the previous AVC ($2.67) but less than the previous ATC ($4.33). According to the relationship between marginal€™s and averages you learned in this chapter:a.
A soft drink manufacturer that uses just labor (variable) and capital (fixed) paid a consulting firm thousand of dollars to calculate short-run costs at various output levels. But after the cost table (see below) was handed over to the president of the soft drink company, he spilled Dr Pepper on
If a firm has diminishing returns to labor over some range of output, it cannot have economies of scale over that range. True or false? Explain briefly.
Draw the long-run total cost and long-run average cost curves for a firm that experiences:a. Constant returns to scale over all output levels.b. Diseconomies of scale over low levels of output, constant returns to scale over intermediate levels of output, and economies of scale over high output
A firm has the strange ATC curve drawn in the following figure. Sketch in the marginal cost curve this firm must have.
The following curve shows the marginal product of labor for a firm at different levels of output.a. Show what the corresponding total product curve would look like.b. Do the total and marginal product curves for this firm ever exhibit diminishing marginal returns to labor? Increasing marginal
You have a part-time work/study job at the library that pays $10 per hour, 3 hours per day on Saturdays and Sundays. Some friends want you to join them on a weekend ski trip leaving Friday night and returning Monday morning. They estimate your share of the gas, motel, lift tickets, and other
Until recently, you worked for a software development firm at a yearly salary of $35,000. Now, you decide to open your own business. You quit your job, cash in a $10,000 savings account (which pays 5 percent interest), and use the money to buy computer hardware to use in your business. You also
The following data are price/quantity/cost combinations for Titan Industry€™s mainframe computer division:a. What is the marginal revenue if output rises from 2 to 3 units? What is the marginal cost if output rises from 4 to 5 units?b. What quantity should Titan produce to maximize total
Each entry in this table shows marginal revenue and marginal cost when a firm increases output to the given quantity:What is the profit-maximizing level ofoutput?
The following tables give information about demand and total cost for two firms. In the short run, how much should eachproduce?
At its best possible output level, a firm has total revenue of $3,500 per day and total cost of $7,000 per day. What should this firm do in the short run if?a. The firm has total fixed costs of $3,000 per day?b. The firm has total variable costs of $3,000 per day?
Suppose you own a restaurant that serves only dinner. You are trying to decide whether or not to rent out your dining room and kitchen during mornings to another firm, The Breakfast Club, Inc. That will serve only breakfast. Your restaurant currently has the following monthly costs:Rent on
Suppose that, due to a dramatic rise in real estate taxes, Ned’s Beds’ total fixed cost rises from $300 to $1,300 per day. Use the data of Table 1 to answer the following:a. What does the tax hike do to Ned’s MC and MR curves?b. In the short run, how many beds should Ned produce after the
A firmâ€™s marginal profit can be defined as the change in its profit when output increases by one unit.a. Compute the marginal profit for each change in Nedâ€™s Bedsâ€™ output in Table.b. State a complete rule for finding the profit maximizing output level in terms of marginalprofit.
Suppose Ned€™s Beds does not have to lower the price in order to sell more beds. Specifically, suppose Ned can sell all the beds he wants at a price of $275 per bed.a. What will Ned€™s MR curve look like?b. In Table, how would you change the numbers in the marginal revenue
Howell Industries specializes in precision plastics. Their latest invention promises to revolutionize the electronics industry, and they have already made and sold 75 of the miracle devices. They have estimated average costs as given in the following table:Unit
Assume that the market for cardboard is perfectly competitive (if not very exciting). In each of the following scenarios, should a typical firm continue to produce or should it shut down in the short run? Draw a diagram that illustrates the firm’s situation in each case.a. Minimum ATC =
Suppose that a perfectly competitive firm has the following total variable costs (TVC):It also has total fixed costs (TFC) of $6. If the market price is $5 per unit:a. Find the firm's profit-maximizing quantity using the marginal revenue and marginal cost approach.b. Check your results by
A profit-maximizing competitive firm will produce the quantity of output at which price exceeds cost per unit by the greatest possible amount. True or false? Explain briefly.
The following table gives quantity supplied and quantity demanded at various prices in the perfectly competitive meat-packing market:Assume that each firm in the meat-packing industry faces the following cost structure:Pounds TC___60,000

Showing 2400 - 2500 of 28054

First
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
Last

Step by Step Answers

Services

Sitemap
Fun
Definitions
Become Tutor
Used Textbooks
Study Help Categories
Recent Questions
Expert Questions
Campus Wear
Sell Your Books

Company Info

Security
Copyrights
Privacy Policy
Terms & Conditions
SolutionInn Fee
Scholarship
Online Quiz
Give Feedback, Get Rewards

Get In Touch

About Us
Contact Us
Career
Jobs
FAQ
Student Discount
Campus Ambassador

Secure Payment

Download Our App

© 2026 SolutionInn. All Rights Reserved