Econ

Last year, a company produced 2,200 units. The price per unit was $1,650. The total variable cost was $2,453,000, while the total fixed cost was $462,000.

$2,453,000+$462,000=$2,915,000 Then, calculate the average cost by dividing the total cost by the quantity produced: $2,915,0002,200=$1,325 Finally, determine the average profit by subtracting the average cost from the price: $1,650−$1,325=$325

Assuming the expenditure multiplier remains at 1.9, how much does the quantity of output change if spending increases by $1,400? Enter your answer in the box below.

1.9*1400

Assume that Country A has a deposit insurance strategy to protect banks against bank runs. The insurance premium is 2525 cents for every $100$⁢100 in bank deposits for banks with a high net worth and 6565 cents for every $100$⁢100 in bank deposits for banks with a low net worth. Suppose that an individual has made a $3,450$⁢3,450 deposit in Bank A, which is considered to be a bank with a high net worth.

(3,450/100)*0.25=8.63

profit

(Price)(Quantity produced)−(Average cost)(Quantity produced)

How should the marginal cost of a perfectly competitive nursery change to achieve efficiency if the market price is $10.50 and the firm grows 300 roses? Suppose the marginal cost is represented by the equation MC=0.021Q+4.4 , where Q is quantity.

0.021*300+4.4=10.7 10.5-10.7=

If Gamecock Bank receives $ 100 in demand deposits and the reserve ratio is 4 %, by how much can the banking system change the money supply?

1/0.04=25 100*0.04=4 4-100=96 96*25=2400

Consider an economy with multiple banks. The dollar value of the required reserves is $144 billion. Calculate the total value of customers' deposits if the money multiplier in the economy equals 4.

1/4*100=25% 144/25%=576

Consider an economy with multiple banks. The dollar value of the required reserves is $136 billion. Calculate the total value of customers' deposits if the money multiplier in the economy equals 8. In your calculations, round to one decimal place if necessary, and enter your answer in billions in the box below.

1/8*100=12.5 136/12.5=10.88

Change in the M1 money supply

1/reserve requirement* change in excess reserves

Consumption spending was $120 billion, investment spending was $10 billion, government spending was $20 billion, spending on exports was $11 billion, and spending on imports was $5 billion. The price level increases, resulting in a decline in investment spending by 10%. Consumption spending decreases by 20%

120*(100-20)=96 10*(100-10)=9 96+9+20+11-5=131

Imagine that the only source of a government's budget is tax revenue. The country's GDP is $650 billion. The government's total tax revenue is $198.9 billion; one-third goes to transfer payments, and the rest is spent on infrastructure at the federal, state, and local levels. Calculate government spending as a share of GDP.

198.9-1/3*198.9=132.6 132.6/650*100=20.4

The total number of unemployed people in a country is 90 million. The table below shows categories of unemployment and the percentage within each. Reason Percentage New entrants 11.0% Re-entrants 28.5% Job leavers 12.0% Job losers: temporary 13.7% Job losers: non-temporary 34.8%

2.5/90)*100=2.8% 34.8%+2.8%=37.6%

In a multi-bank system, after customers deposited additional funds in the bank, the M1 money supply increased by $2,000 billion. Calculate the total value of customers' deposits made if the money multiplier in the economy equals 6.25. Assume that there is a non-zero reserve requirement in the economy and that all excess reserves are loaned out. Enter your answer in billions in the box below and round to two decimal places if necessary.

2000/6.25=320 1/6.25*100=16 320/100-16=380.95

At Point A on the demand curve, a monopolistic competitor sells 13 units of a product at a price of $21. At Point B, the output increases by 9 units, the price falls by $4, and the total costs increase by $25.

25/9=2.77777 21-4=17 13+9=22 22*17-13*21=101 101/9=11.22222 11.22-2.78=8.44

Consider a cell phone market with an equilibrium price of $325 and an equilibrium quantity of 250 thousand cell phones. Assume that the quantity demanded at a below-equilibrium price is 2.5 times the equilibrium quantity, and the quantity supplied at the below-equilibrium price is 1/2 times the equilibrium quantity. Calculate the shortage in the market at the below-equilibrium price.

250*2.5=625 250/2=125 625-125=500

If nominal GDP is $2625 and the GDP deflator is 175, real GDP is

2625/(175/100)=1500

In a multi-bank system, after customers deposited additional funds in the bank, the M1 money supply increased by $2,625 billion. Calculate the total value of customers' deposits made if the money multiplier in the economy equals 12.5. Assume that there is a non-zero reserve requirement in the economy and that all excess reserves are loaned out. Enter your answer in billions in the box below and round to two decimal places if necessary.

2625/12.5=210 1/12.5*100=8 210/(100-8)=228.26

Assume that Country A's GDP in 2017 was $300 billion. The government collected $150 billion in tax revenue, and total government spending was 21% of GDP. In 2018, Country A's GDP was −$400 billion. The government collected $70 billion more in tax revenue than in 2017, and the share of total government spending as a percentage of GDP increased by 4 percentage points.Determine the difference in budget surpluses between 2017 and 2018. Enter your answer in billions and as a positive number in the box below.

300*0.21=63 150-63=87 21+4=25% 400*0.25= 70+150=220 220-100=120 120-87=33

Hassan has $330 in cash and $7,300 in his checking account. He decides to open a savings account, transfer $5,450 into it from his checking account, and withdraw the rest of the money in the checking account as cash. Calculate the difference in M1 before and after Hassan's banking decisions.

350+7300=7630 7300-5450=1850 330+1850=2180 7630-2180=5450

There is a monopoly firm that produces agricultural machinery. The total production cost for 1 thousand machines is $85 million, and the total revenue is $220 million. At an output of 2 thousand machines, the total cost will be $125 million, while the expected total revenue will be $380 million.Determine the marginal profit the firm will receive from selling 2 thousand machines. Enter your answer in millions in the box below.

380 million-220 million/2-1=160 million 125 million - 85 million=40 million 160-40 million=120 million

Suppose that a central bank has established reserve requirements of 14%. Bank A has $400 million in deposits, and Bank B has $1,200 million in deposits. Assuming that banks are required to hold their reserves on deposit with the central bank, determine the total amount of deposits in the central bank if only the deposits of these two banks are considered. Enter your answer in millions in the box below.

400*0.14=56 1200*0.14=168 56+168=224

The basket of goods cost $400 in 2009, which is the base year. In 2010, the cost of the basket of goods increased by $8, and in 2011 it increased by $14.

400/100=4 400+8=408 408+14=422 408/4=102 422/4=105.5 102-100/100*100=2 105.5-102/102*100=3.4

Suppose that in 2010, an economy's potential GDP was $420 billion, which is $60 billion higher than its real GDP for the same year. In five years, consumption in this economy increased by $35 billion while exports decreased by $15 billion, all other things being equal. By how much should the economy increase its real GDP in 2015 to reach its potential GDP? Consider the problem from the Keynesian perspective, where aggregate demand determines real GDP. Assume that potential GDP remains unchanged during the period discussed

420-60=360 360+35-15=380 420-380=40

Bank A has $500 million in assets: 55% of them are loans, 38% are bonds, and 7% are reserves. Suppose the central bank makes some open market operations and sells bonds for $60 million to Bank A. Assume that Bank A wants to bring its reserves back after the described transaction by changing the amount of loans.

500*0.55=275 275-60=215

In a multi-bank system, after customers deposited additional $500 billion in the bank, M1 money supply increased by $2,000 billion. Calculate the value of loans issued by the bank during the first round of loans. Assume that all the excess reserves are loaned out. Enter your answer in billions in the box below.

500/(2000+500)*100=20 500*(100-20%)=400

An economy's M2 money supply was $5,100 billion in 2015. In 2020, M1 money supply in this economy decreased by $300 billion, while the value of savings accounts increased by $540 billion.

5100-300+540=5340 5340-5100

Assume that in 2017, GDP was $400 billion, and the national debt was $60 billion. In 2018, GDP increased by $40 billion, and the debt-to-GDP ratio increased 4 times.Determine the national debt in 2018. Enter your answer in billions in the box below and round to the nearest whole number if necessary.

60/400)*100=15 15*4=60 400+40=440 440*0.60=264

In 2015, the net worth of a bank was $700 billion, and the bank's liabilities were $350 billion. In 2020, the value of customers' deposits in the bank increased by $90 billion, and reserves decreased by $35 billion. Calculate the net worth of the bank in 2020 if other parameters remained constant.

700+350=1050 350+90=440 1050-35=1015 1015-440=575

Assume that a country's total population of people sixteen and over is 93 million; 73 million are employed, 7 million are unemployed, and the remainder is either retired or not looking for a job.

73+7=80 93-80=13 13/93*100

A local artisan produces handmade toys. The monthly office rent is $890. The production materials cost $390 a month. In one month, the artisan can produce 85 toys. What is the maximum price at which the artisan should exit the market in the long run?

890+390=1280 1280/85=15.06 A:15.06

Last year, Country A's aggregate demand was $9.7 billion. This year, Country A's citizens increased their consumption of American goods by $0.6 billion, while their consumption of other goods, as well as other AD components, remained unchanged.

9.7+0.6-0.6=9.7

Dominic earned $32,000 in taxable income last year; this year, it is expected to be $36,000. Last year, the basic tax brackets in his country were as follows: a single person owed 11% of all taxable income from $0 to $9,000; 16% of all income from $9,001 to $35,000; and 26% of all taxable income from $35,001 to $82,000. The income levels of the tax brackets are indexed to rise automatically with inflation (they simply increase by the rate equal to the previous year's inflation rate).Determine the income tax that Dominic owes this year if inflation reached 5% last year. Enter your answer as a positive number in the box below and round to two decimal places.

9000*(100+5%)=9450 35000*(100+5)=36750 82000*(100+5%)=86100 9450*11+(36000-9450)*16=5287.5

You were asked to calculate the short-run average cost for a bookstore given that the total cost of inputs is $9,000 and quantity of output produced is 116

AC=TC/Q $9,000/116=77.59

assume that the economy is in equilibrium, and aggregate supply is described by the following equation: AS=49,000+1,850P. Consumption spending is $109,000, investment spending is $59,000, government spending is $69,000, spending on exports is $54,000, and spending on imports is $64,000.

AD=109000+59000+69000+54000-64000=227000 227000-49000/1850=96

utility

Ability or capacity of a good or service to be useful and give satisfaction to someone.

command economy

An economic system in which the government controls a country's economy.

Traditional economy

An economy in which production is based on customs and traditions and economic roles are typically passed down from one generation to the next.

If output is between 0 and 30, TR<TC so the firm has losses. If output is between 40 and 100, TR>TC the firm has profits. If output is above 100 TR<TC so the firm has losses. Profit is maximized at $90 when output is between 70 and 80.

Benis

A [blank] can be used to determine whether resources are efficiently allocated.

Budget Contraint

Imagine there are three technologies involved in manufacturing a certain product. The first technology requires 5 unit(s) of labor and 3 unit(s) of materials per unit of product. The second technology requires 4 unit(s) of labor and 4 unit(s) of materials. The third technology requires 3 unit(s) of labor and 5 unit(s) of materials. What is the minimum cost of manufacturing the product if one unit of labor costs $7 and one unit of materials costs $15?

Cost1 $7×5+$15×3=$80 Cost2 $7×4+$15×4=$88 Cost3 $7×3+$15×5=$96

The government imposes a tax on cigarettes

Demand for cigarettes is elastic

the government imposes a tax on gasoline

Demand for gasoline is elastic

market economy

Economic decisions are made by individuals or the open market.

If City Bank receives demand deposits of $ 200 and the reserve ratio is 10 %, how much does City Bank have in excess reserves?

Excess reserves=Total reserves from a demand deposit-required reserves 200*0.10=20 20-200=180

You were asked to use the following table to determine the maximum demand at which the market will be in equilibrium and a firm will stay a natural monopoly in the long run. Assume that the firm can produce only at the levels listed in the table below. Quantity (units) Total cost ($ 1,000 $7,500 1,100 $7,700 1,200 $7,800 1,300 $8,450 1,400 $11,200 1,500 $16,500

First calculate the average cost per unit

What can a circular flow diagram (CFD) represent?

International trade

Calculate the short-run marginal cost for a firm given that total cost of inputs increased from $30 to $50 and quantity of output produced increased from 13 units to 26 units.

MC=ΔTC/ΔQ Change in total cost: 50−30=20 Change in quantity produced: 26−13=13 Marginal cost: 20/13=1.54

The price of microwaves decreased by $10, and the quantity supplied increased by 11.

No, this does not abide by the law of supply

When demand for a product is perfectly inelastic, it is a vertical line.

No, this is not a macroeconomic issue.

Suppose you have $400 to pay for swimming and yoga classes this month. The price for one yoga class is $56. You want to attend 2 swimming classes. The equation for the quantity of yoga classes is as follows:

PS=($400−$56×5)2=$60

Assume that the economy is in equilibrium. Aggregate supply is $22,800. Aggregate demand is described by the following equation: AD1=$23,880−12P1 Suppose aggregate supply increases by 9%, and the aggregate demand equation changes to this: AD2=$26,112−12P2 Calculate the percentage increase in the equilibrium price level. Enter your answer as a percentage in the box below and round to one decimal place if necessary.

P_1=23880-22800/12=90 22800*100+9=24852 261112-24852/12=105 105-90/90*100=16.7%0

Suppose there is a decrease in exports. If the economy is initially in the intermediate zone of the economy, what will be the effects on the price level and output?

Price and quantity will both decrease

Suppose there is an increase in health care spending. If the economy is initially in the intermediate zone of the economy, what will be the effects on the price level and output?

Price and quantity will both increase

Suppose there is an increase in exports. If the economy is initially in the Keynesian zone of the economy, what will be the effects on the price level and output?

Price will basically remain constant and quantity will increase

The demand curve in the market for meat is described by the equation Qd=150−15P, and the supply curve is described by the equation Qs=15+12P, where P is the price measured in a national currency and Q is the quantity of kilograms of meat. Calculate the equilibrium price in this market.

QD=QS

The demand curve in a market is described by the equation Qd=96−17P, and the supply curve is described by the equation Qs=18+3P, where P is the price of gasoline and Q is the quantity of gasoline (in millions of gallons). Suppose the price of gasoline is $3.00 per gallon.

Qd=qs

The government plans on doubling the number of schools and hospitals in the country within the next decade even though it does not currently have the resources.

The point is above the PPF curve

Short run average cost

Total cost/Quantity produced

excess reserves

Total reserves from a demand deposit-required reserves

Consider an economy with multiple banks. Customers deposited $550 billion in cash in banks. As a result, the M1 money supply increased by $2,245 billion.

X=550/(2245+550)*100=19.7

P=MC

at the perfectly competitive firm's profit-maximizing quantity of output

A central bank that wants to increase the quantity of money in the economy will

buy bonds in open market operations

marginal revenue

change in total revenue/change in quantity

Marginal revenue

marginal revenue=change in total revenue/change in quantity

marginal cost

the cost of producing one more unit of a good

marginal cost

the increase in total cost that arises from an extra unit of production

Average Total Cost

total cost divided by the quantity of output

short run average total cost

total cost divided by the quantity of output

average variable cost

variable cost divided by the quantity of output

Suppose that in 2010, an economy's potential GDP was $630 billion, which is $80 billion higher than its real GDP for the same year. In five years, consumption in this economy increased by $50 billion while exports decreased by $25 billion, all other things being equal.

630-80=550 550+50-25=575 630-575=55

Last year, Country A's aggregate demand was $7.3 billion. This year, Country A's citizens replaced $0.6 billion of their consumption of local goods with consumption of American goods. The levels of the other AD components remained unchanged. Calculate this year's aggregate demand in Country A.

7.3-0.6=6.7

In 2007, a country's minimum wage was $7.40 per hour, and inflation was 5.7%. During 2008, inflation stayed the same, and the nominal minimum wage also remained constant.

7.4/100+5.7=7 7.4-7=0.4

Last year, Country A's aggregate demand was $7.5 billion. This year, Country A's citizens replaced $0.4 billion of their consumption of local goods with consumption of American goods. The levels of the other AD components remained unchanged. Calculate this year's aggregate demand in Country A.

7.5-0.4=7.1

A bank holds $70 billion in checking accounts, $120 billion in savings account, and $45 billion in reserves. The bank has also issued loans for $130 billion and purchased 0.6 billion bonds, each worth $45. Calculate the bank's net worth.

70+120=190 130+27+45=202 202-190=12

a bank holds $70 billion in checking accounts, $130 billion in savings account, and $40 billion in reserves. The bank has also issued loans for $140 billion and purchased 0.7 billion bonds, each worth $45.

70+130=200 0.7*45=31.5 140+31.5+40=211.5 211.5-200=11.5

In 2014, the net worth of a bank was $700 billion, and the value of customers' deposits was $350 billion. In 2019, the net worth of the bank increased by $115 billion, and the value of savings accounts increased by $200 billion. Calculate the difference in the bank's total assets between 2014 and 2019.

700+350=1050 350+200=550 815+550=1365 1365-1050=315

A government receives $79 billion in taxes each year. In Year 1, government spending was $71 billion. In Year 2 and Year 3, the budget deficit was $9 billion and $6 billion, respectively. At the end of Year 3, total debt was $60 billion. Calculate total debt at the beginning of Year 1.

79-71=8 -8+9+6=7 7-60=53

Assume that there is a market for loanable bank funds where the equilibrium occurs at a 8% interest rate and a quantity of funds loaned and borrowed is $25 billion. The Fed pursues an expansionary monetary policy, and as a result, the interest rate changes by 2.4 times and the quantity of loaned funds changes by 1.3 times.

8%/2.4=3.3%

Inflation in a country was 8%, and the government created a 14-year program aimed at reducing the inflation rate. The country experienced deflation of 1.1% after 14 years.

8+1.1=9.1 9.10/14=0.65

Last year, a company produced 900 units. It faced fixed costs, which accounted for $200,000. The average variable cost was $1,600 per unit.

$1,600×900 units =$1,440,000 Calculate total cost by adding total variable cost to fixed cost. $200,000+$1,440,000=$1,640,000 The total costs that the company faced last year were $1,640,000 .

money multiplier

1/reserve requirement

In a multi-bank system, after customers deposited additional $720 billion in the bank, M1 money supply increased by $1,080 billion. Calculate the value of loans issued by the bank during the first round of loans. Assume that all the excess reserves are loaned out.

1/x*720*(1-x)=1080 X=720/(1080+720)*100=40 720*(100-40)=432

A 9% change in the price of transportation would change the CPI by 0.9%, while a 8% change in the price of housing would change the CPI by 1.9%. The initial CPI was 207.8. Then, the price of housing decreased by 10%, and the price of transportation increased by 6%.

10%*1.9%/8=2.38 6%*0.09/9%=0.6 2.38-0.60=1.78 207.8*(100-1.78)

Of federal tax revenue, individual income taxes account for 43%, corporate taxes account for 7%, other sources account for 4%, and payroll taxes account for the rest.Calculate the dollar value of the payroll tax revenue if the dollar value of corporate tax revenue is $56 billion. Enter your answer in billions in the box below and round to the nearest whole number if necessary.

100-(43+7+4)=46 56/0.07=800 800*0.46=

Country A lost 9,000 jobs during a recession. 24% of them were in higher-wage occupations, and 58% were in mid-wage occupations. In the subsequent recovery, all these jobs were gained back, but only 11% of them were in higher-wage occupations and 37% of them were in mid-wage occupations

100-24-58=18 100-11-37=52 9000*18=1620 9000*25=4680 4680-1620

A government starts off with a total debt of $97 billion. In Year 1, the budget surplus was $12 billion, and government spending was $116 billion. In Year 2, government revenue from taxes increased by $14 billion, while government spending remained unchanged. In Year 3, government tax revenue and government spending were the same as in Year 2. Calculate the government's total debt at the end of Year 3.

116+12=128 128+14=142 142-116=26 97-(12+26+26)=33

Assume that 255 million people are employed. The number of frictionally unemployed is 12 million people, the number of structurally unemployed is 11 million people, and the number of cyclically unemployed is 14 million people.

12+11+14=37 37+255=292 (12+11/292)*100

Suppose some changes in a market occur. Rent is raised by $120, and the price of raw materials increases by $100 in total. At the same time, sales increase by 26 units. Calculate the average total cost in terms of long-run equilibrium.

120+100=220 220/26=8.46 A:8.46

Suppose the price of a product equals $2.90 per item. The current output level is 250 items. To reach the profit-maximizing level, the firm should increase the total cost by $120. What should be the profit-maximizing quantity to demonstrate productive and allocative efficiency in a perfectly competitive market?

120/2.90=41.3 250+41=291

Consumption spending was $130 billion, investment spending was $20 billion, government spending was $30 billion, spending on exports was $21 billion, and spending on imports was $15 billion. The price level increases, resulting in a decline in investment spending by 15%. Consumption spending decreases by 30%. If other factors stay at the same level, determine aggregate demand after the price level increased.

130*(100%-30%)=91 20*(100%-15%)=17 AD=91+17+30+21-15=144

A basket of goods consists of two items. The price of the first item in Period 3 is $150. The price of the second item in the same period is $110. Total spending increased by $40 in Period 2 compared to Period 1 and in Period 3 compared to Period 2. If Period 2 is the base year, determine the index number for Period 1. Enter your answer in the box below and round your answer to one decimal place.

150+110=260 260-40=220 220-40=180 180/220/100=81.8

Emory received $160 as a nominal return on investment, after the 23% income tax imposed on nominal interest received. The real rate of return on investment was 1.7% due to the inflation rate of 3.3%.

160/100-23=207.79 1.7+3.3=5 207.79/5=4115.8

Assets (in millions) Liabilities & Net Worth (in millions) Reserves $90 Deposits $650 Bonds $170 Loans $450 Net worth $60 The central bank decides to expand the money supply by $35 million using Bank A's bonds. What is the value of the bonds in Bank A after this action? Enter your answer in millions in the box below.

170-35

what is the marginal cost When a monopolist produces 150 units, total cost of production is $15,000. When a monopolist produces 175 units, the total cost is $17,500.

17500-15000=2500 2500/175-150=100

A government started off with a balanced budget. In Year 1, the government spent $18 billion on national defense, $21 billion on social security, $23 billion on health care, $7 billion on interest payments on past borrowing, and $24 billion on other things. In Year 2, the government spent $2 billion less on national defense and $4 billion more on health care, other things being equal. The government receives $72 billion in taxes each year.

18+21+23+7+24=93 93-72=21 93-2+4=95 95-72=23 21+23=44

The government of a small country is negotiating for a huge investment from a foreign company. The company is willing to invest as much as $5 billion. This year, government spending amounted to $19 billion, or 19% of GDP.

19 billion/19%=100 5/100=0.05

onsider a market where the equilibrium price for a good is $20 and the equilibrium quantity is 210 units. Assume that the quantity supplied at an above-equilibrium price is 7 times the equilibrium quantity, and the quantity demanded at the above-equilibrium price is 1/4 the equilibrium quantity. Calculate the surplus in the market at the above-equilibrium price.

210*7=1470 210/4=53 1470-53

Assume that Country A's GDP this year is $300 billion. The government has collected $110 billion in tax revenue. Total government spending is 22% of GDP.Determine whether there is a budget deficit or a budget surplus and calculate its amount. In the box below, enter your answer in billions and as a positive number if there was a budget surplus or as a negative number if there was a budget deficit.

300*0.22=66 -66+110=44

In Country A, consumers spent $300 a month on a basket of goods in 2007 and $360 in 2008. In Country B, the price of the same basket of goods was $5 higher than in Country A in 2007 and $10 higher in 2008.

300+5=305 360+10=370 360-300/300-100=0.2 370-305/305*100=21.3 21.3-20=1.3

Suppose there are 3,000,000 people in a city's labor force. Only 36% of them have a college degree; the others have a high school diploma. The unemployment rate for people without a college degree is 6.4%. Only 1.2% of those with a college degree are unemployed. The city administration starts a social program to provide education for unemployed people with only a high school diploma. It is expected that 31% of these people will receive a college degree.

3000000*(100%-36%)=1920000 1920000*6.4%=122880 122,800*31%=38093 38093-(38093*1.2%)=37636

There are 100 million unemployed people in a country, 32% of which have been unemployed for less than five weeks. The number of people who have been unemployed for five to fourteen weeks is 12 million less than the number of people who have been unemployed for less than five weeks. People who have been unemployed for fifteen to twenty-six weeks account for 13% of the total unemployed population. Calculate the percentage of people who have been unemployed for twenty-seven weeks or more.

32%-(12/100)*100=20% 100%-32%-20%-13%=35%

Assume that a country's total population of people sixteen and over is 430 million, and 60 million of them are classified as out of the labor force. The unemployment rate is 10%. ​​​​Determine the number of employed people.

430-60=370 370*.10=37 37-370

Hassan has $440 in cash and $8,400 in his checking account. He decides to open a savings account, transfer $6,100 into it from his checking account, and withdraw the rest of the money in the checking account as cash.

440+8400=8840 8400-6100=2300 440+2300=2740 8840-2740=6100

Consider a market with a monopoly firm. Sales revenue of this firm is $10,000,000, total cost is $4,750,000, and average cost is $1.90. Another firm wants to enter the market and provide the same product at a lower price. To intimidate the potential competitor, the monopoly firm intends to use predatory pricing.

4750000/1.90=2500000 10,000,000/2,500,000=4 4-1.90=2.1

An economy's M2 money supply was $4,800 billion in 2015. In 2020, M1 money supply in this economy decreased by $285 billion, while the value of savings accounts increased by $510 billion. Calculate the difference in M2 between 2015 and 2020

4800-285+510=5025 5025-4800=225

Mary buys 5 kilograms of vegetables and 4 kilograms of fruit per month. Last year, she monthly spent $2.30 per kilogram of vegetables and $5.80 per kilogram of fruit. This year, the price of vegetables increased by $0.50 per kilogram, and the price of fruit increased by $1.10 per kilogram.

5*2.3+4*5.8=37.1 2.3+0.5=2.8 5.8+1.1=6.9 5-2.8+4*6.9=41.6 41.6-34.7/34.7*100=19.9

Consumption: $5.1 billion Investment: $2.0 billion Government spending: $1.0 billion Exports: $1.4 billion Imports: $0.7 billion This year, Country A's citizens increased their consumption of foreign goods by $0.4 billion. (Their level of consumption of other goods has not changed). Moreover, as compared to last year, private investors spent an additional $0.6 billion on imported building materials used to construct new local manufacturing facilities. Exports remained unchanged, and there was a rightward shift of aggregate demand by $0.8 billion at any price level.

5.1+2.0+1.0+(1.4-0.7)=8.8 8.8+0.8=9.6 5.1+0.4=5.5 2+0.6=2.6 0.7+0.4+0.6=1.7 9.6-5.5-2.6-(1.4-1.7)=1.8

The total adult population in a country is 6,200,000 people. The number of employed people is 7 times greater than the number of unemployed people. The labor force is 60% of the entire adult population.

6200000*.60=3720000 3720000/7+1=465000

The GDP of Country A is 605 billion in the national currency. The GDP per capita in U.S. dollars, according to the PPP-equivalent exchange rate, is $5,250. Calculate the PPP-equivalent exchange rate (in the units of national currency per $1) if the population of this country is 42 million people.

5250*42=220.500 605/220.500=2.744

the components of the money supply in an economy and their values: Coins and currency in circulation: $480 billion Demand deposits and other checking accounts: $695 billion Individual money market mutual fund balances: $155 billion Savings deposits: $545 billion Time deposits: $95 billion Traveler's checks: $11 billion

545+95+155=795

Suppose federal tax revenue is $840 billion per year. In Year 1, 56% of this revenue was collected from individual income taxes, 31% from payroll taxes, 9% from corporate taxes, and the remaining 4% from other sources. In Year 2, the revenue collected from individual taxpayers increased by 6 percentage points, but total federal tax revenue remained the same.

56%+6=62% 840*0.62=

Assume that aggregate demand is $570 billion and that $200 billion of it is consumption spending and $160 billion is investment spending. The Fed conducts an expansionary monetary policy and changes the interest rate from 10% to 9%. Assume that every 1 percentage point change in interest rate results in a 20% change in consumption spending and a 15% change in investment spending. Other components of aggregate demand are the same at the initial and new equilibrium points.

570-200-160=210 10%-9%=1% 200*(100%+20%)=240 160*(100%+15%)=184 210+240+184=634

Assume that in Country A in 2018, GDP was $70 billion. In 2017, the debt-to-GDP ratio was 60%, but in 2018, it decreased by 1.5 times.Determine the total national debt of Country A by 2018. Enter your answer in billions in the box below and round to the nearest whole number if necessary.

60%/1.5=40 70*40%=28

In 2015, the net worth of a bank was $600 billion, and the bank's liabilities were $300 billion. In 2020, the value of customers' deposits in the bank increased by $70 billion, and reserves decreased by $30 billion.

600+300=900 300+70=370 900-30=870 870-370=500

Suppose the total revenue from selling 300 goods in an imperfect market is $6,000. The marginal cost of production is $12. Then, a new, widely available technology makes the market perfectly competitive.

6000/300=20 12-20=8

Suppose Vy lives in Canada and receives a constant income equivalent to US$61,000 per year. She has a plan, under which she is expected to invest 11% of her annual income in U.S. money market funds, save 16% of it in a U.S. savings account to buy a house in the future, and spend the rest on day-to-day expenses in Canada. In 7 years of such spending and investment policy, besides fulfilling her investing and savings goals, Vy also accumulated an additional US$15,860 in her U.S. checking account.Calculate Vy's total c

61000*11%*7=46970 61000*16%*7=68320 46970+68320+15860=131150

Country A has a deposit insurance strategy to protect banks against bank runs. The insurance premium is 1010 cents for every $100$⁢100 in bank deposits for banks where liabilities account for less than 50%50% of assets and 5050 cents for every $100$⁢100 in bank deposits for banks where liabilities account for more than 50%50% of assets. Suppose that an individual wants to make a $10,000$⁢10,000 deposit in a bank that has $1,550$⁢1,550 billion of assets and $620$⁢620 billion of liabilities.

620/1550*100=40 10000/100*.10=10

Marcus invested $4,500 at an interest rate of 8%. Marcus's return will be affected by the inflation rate of 3%.Knowing that the buying power of cash diminishes due to inflation, determine the difference between the initial real return and the one Marcus would receive if the inflation rate is 11%. Enter your answer as a positive number in the box below and round to the nearest whole number if necessary.

8-3=5 4500*5%=225 8-11=-3 4500*-3=-135 225-(-135)=360

Suppose the minimum wage in Country A was originally $8.20 per hour, and this past year the government increased it by $0.70. Now, consider the inflation rate for the year was 5%. If Country A has to adjust the minimum wage for inflation to have the same purchasing power as it did after the government increase, calculate what the new adjusted minimum wage needs to be. Enter your answer in the box below and round to two decimal places if necessary.

8.20+0.7=8.9 8.9/100-5=9.37

In 2014, the net worth of a bank was $800 billion, and the value of customers' deposits was $450 billion. In 2019, the net worth of the bank increased by $135 billion, and the value of savings accounts increased by $250 billion.

800+450=1250 800+135=935 450+250=700 700+935=1635 1635-1250=385

Consider an economy with multiple banks. Customers deposited $800 billion in cash in the banks. As a result, the M1 money supply increased by $4,050 billion. Calculate the reserve requirement set by the central bank for commercial banks if all excess reserves are loaned out.

800/(4050+800)*100=16.5

Country A has a GDP per capita of 8,000 units of national currency, and its population is 14.5 million people. The exchange rate is 3.20 U.S. dollars per 1 unit of national currency. Calculate the total GDP of Country A in U.S. dollars.

8000*3.20=25,600 25,600*14.5=371,200

In 2017, Country A had a GDP per capita of $8,440 and a population of 66.5 million people. In 2018, total GDP increased by 6.1%, and population growth was 0.8% . What was the GDP per capita in 2018?

8440*66.5=561260 561260*(100%+6.1%)=595496.86 66.5*(100%+0.8%)=67.032 595496.86/67.03=

The adult population of a country is 9,600,000 people. Of those, 67% are in the labor force. Usually, there are 225,000 of unemployed people, which is classified as natural unemployment. However, due to a recession, the number of the unemployed people increased to 495,000. Calculate the cyclical unemployment rate due to the recession.

9600000*.67=6432000 495000-225000=270000 270000/6432000*100

Assume that the equilibrium aggregate demand is $970 billion and that $450 billion of it is consumption spending and $220 billion is investment spending. The Fed conducts a contractionary monetary policy; as a result, the equilibrium interest rate changes from 9% to 14%, which in turn affects consumption spending and investment spending. If we compare consumption spending and investment spending at the new equilibrium point with their values at the initial equilibrium point, the difference is 60% and 40%, respectively (both components have changed in the same direction). If other components of aggregate demand are the same for the two equilibrium points, determine the level of aggregate demand that corresponds to the new equilibrium point. Round to the nearest whole number. Enter your answer in billions in the box below.

970-450-220=300 450*(100-60)=180 220*(100%-60%)=132 300+180+132=612

Assume that the economy is in equilibrium, and aggregate supply is described by the following equation: AS=31,000+1,400P. Consumption spending is $91,000, investment spending is $41,000, government spending is $51,000, spending on exports is $36,000, and spending on imports is $46,000. Determine the equilibrium price level in this economy.

AD=91000+41000+51000+36000-46000=173000 AS=AD 173000=31000+1400P P=101

Average profit

Add fixed cost to variable cost then divide the total cost by quantity produced then subtract the average cost from the price

Last year, a company's costs were $2,400,000. The company spent $360,000 on rent and paid $120,000 in interest on a bank loan. The company produced 1,000 units.

Calculate the total variable cost by subtracting the fixed costs (rent and interest) from the total cost: $2,400,000−$360,000−$120,000=$1,920,000 Calculate the average variable cost by dividing the total variable cost by the number of units produced: $1,920,000/1,000=$1,920

Long Run Equilibrium in Perfect Competition

Economic profit is zero

Marginal analysis

Examinging the benefits and costs of choosing a little more or a little less

Short run marginal cost

First calculate the change in total cost, then the change in quantity produced, Then divide the change in total cost by the change in quantity to get marginal cost

Suppose there are only two banks in a country, Bank A and Bank B, each initially having 65%65% of their liabilities in the form of customers' deposits. Bank A had $850$⁢850 billion in assets and $314$⁢314 billion in liabilities, and Bank B had $510$⁢510 billion in assets and $238$⁢238 billion in liabilities. There was a rumor that a bank, which has a lower absolute amount of assets compared to another bank in the economy, would experience a negative worth in the short run. The news triggered a bank run, so depositors withdrew 70%70% of their deposits from the lower-asset bank and put it all into the higher-asset bank, which held these funds as liabilities and did not issue any new loans. To protect against future bank runs, the government put a deposit insurance strategy and obliged the banks to pay the insurance premium for all the currently existing deposits they held. The insurance premium is 1010 cents for every $100$⁢100 in bank deposits for banks where liabilities account for less than 65%65% of assets and 5555 cents for every $100$⁢100 in bank deposits for banks where liabilities account for 65%65% of assets and more.

Initial customer deposits in bank A: 314*.65=204.1 initial customer deposits in bank B 238*.65=154.7 154.70*.7=108.29 314+108.29/850*100=49.68 204.1+108.29=312.39 312.39/100*.10=

Suppose that a monopolist has a constant marginal cost curve. That is, for each unit of output that the monopolist produces, it costs an additional $64. The monopolist's marginal revenue is MR=400−8Q, where Q is the quantity produced. The demand curve is P=400−4Q.

MR-400-8Q 64=400-8Q Q=42 p=400-4q P=400-4q=232

Below are the components of the money supply in an economy and their values Coins and currency in circulation: $480 billion Demand deposits and other checking accounts: $695 billion Individual money market mutual fund balances: $155 billion Savings deposits: $545 billion Time deposits: $95 billion Traveler's checks: $11 billion

M2-M1 545+95+155=795

Suppose a company creates its own differentiated type of sneaker and is thus considered a monopolistically competitive firm. This firm has a constant marginal cost curve. For each unit of output that the monopolistically competitive firm produces, it costs an additional $50. The firm's marginal revenue curve is MR=60−2Q, where Q is the quantity produced. The firm's perceived demand curve is P=60−1Q

MC = MR 50=60-2q q=5 P=60-1q p=60-1(5) p=55

In order for a butcher to produce more ground beef, he must produce less steak.

Productive efficiency

The ________ is the nominal interest rate minus the rate of inflation.

Real interest rate

Consider a cell phone market with an equilibrium price of $400 and an equilibrium quantity of 280 thousand cell phones. Assume that the quantity demanded at a below-equilibrium price is 2 times greater than the equilibrium quantity, and the quantity supplied at the below-equilibrium price is 4 times less than the equilibrium quantity. Calculate the amount of shortage in the market at the below-equilibrium price.

Since the equilibrium quantity is 280 thousand cell phones, the quantity demanded at a below-equilibrium price can be found as 280×2=560 thousand cell phones. Similarly, the quantity supplied at a below-equilibrium price is 2804=70 thousand cell phones. Finally, the shortage can be calculated as the difference between the quantity demanded and the quantity supplied: 560−70=490 thousand cell phones

The government imposes a tax on soda.

Supply of soda is inelastic

Suppose two firms with the same LRAC curve supply goods to one market. For both firms, equilibrium quantity is 4,600 units per month, and equilibrium price is $9 per unit. Firm A invented a new technology, received a patent for it, and increased its sales by 22%. The increase in demand causes the market price to decrease by 12%. If Firm B continues to produce 4,600 units, how will the total revenue for each firm change in a month?

The following answer is correct: Firm B (without patent): −$4,968 Firm A (with patent): $3,047 To calculate how the total revenue for each firm will change in a month after Firm A invented a new technology, first determine their initial revenue. According to the problem statement, both firms were equal, so the total revenue for each firm is as follows: $9×4,600 units =$41,400 Calculate the new output for Firm A after the invention of the new technology by increasing the initial quantity by 22% . 4,600 units ×(100%+22%)=5,612 units After the initial price falls by 12% , the new market price will be $7.92 per unit for each firm.To calculate how the total revenue of each firm will change in a month, determine the difference between the total sales revenues at the new price and the original price. Recall that Firm B (without the patent) does not increase its sales, but it will be forced to sell its goods at the new market price. Firm B (without patent): 4,600×$7.92−$41,400=−$4,968 Firm A (with patent): 5,612×$7.92−$41,400=$3,047

Suppose that due to technological improvements at a firm, the marginal cost of production decreased by $32. However, soon the cost of materials increased, so the marginal cost increased by $75. At the same time, the transportation of materials became cheaper and decreased the marginal cost by $16.

a perfectly competitive market in long-run equilibrium, firms operate where price equals marginal cost. Therefore, if output stays constant, price should change in the same way as marginal cost: decrease by $32, increase by $75, and decrease by $16 again. So, it should increase by $27.

law of diminishing marginal utility

rule stating that the additional satisfaction a consumer gets from purchasing one more unit of a product will lessen with each additional unit purchased

In March, a company employed 80 workers, but in April it expanded. The change in total product due to the expansion amounted to 50 tons. The firm's marginal product for this period was 10 tons.

ΔL=ΔTPMP =50/10=5 workers