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Economics assignment

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Question;TCO A) Suppose;you are hired to manage a small manufacturing facility that produces;Widgets.;(a.) You know;from data collected on the Widget Market that market demand has recently;decreased and market supply has recently increased. As manager of the facility;what decisions should you make regarding production levels and pricing for your;Widget facility?;Remember that;supply and demand are about the market supply and market demand, which is;bigger than your own company. You are;being given data on supply and demand for the whole market, and are being asked;what effect that has on you as a small part of that market.(b.);Now, suppose that following the supply and demand changes in (a), a substitute;good goes down in price, and your costs of production decrease. What new decisions will you make regarding;production levels and pricing for your Widget facility?(TCO B) Here is some data on the demand for marshmallows;Price Quantity;$10 1100;$;8 1300;$;6 1700;$;4 2300;$;2 3100;(a.) Is;demand elastic or inelastic in the $6-$8 price range? How do you know?(b.);If the table represents the demand faced by a monopoly firm, then what is that;firm?s marginal revenue as it increases output from 1700 units to 2300 units?;Show all work.TCO;C) You have been hired to manage a small;manufacturing facility which has cost and production data given in the table;below.;Total Total;Workers Labor Cost Output;Revenue;1 $500 100 $700;2 1000 280 1150;3 1500 440 1440;4 2000 540;1570;5 2500 600 1670;6 3000 630 1710;7 3500 640 1730;(a.);What is the marginal product of the second worker? (b.);What is the marginal revenue product of the fourth worker? (c.);What is the marginal cost of the first worker? (d.);Based on your knowledge of marginal analysis, how many workers should you hire?;Explain you answer.TCO;C) Answer the next questions on the;basis of the following cost data for a firm in pure competition: (a.);Refer to the above data. If the product;price is $75, at its optimal output, will the firm realize an economic profit;break even, or incur an economic loss?;How much will the profit or loss be?;Show all calculations. (b.) Refer to the above data. If the product price is $100, at its optimal;output, will the firm realize an economic profit, break even, or incur an;economic loss? How much will the profit;or loss be? Show all calculations.TCO;D) A software producer has fixed costs;of $18,000 per month and her Total Variable Costs (TVC) as a function of output;Q are given below;Q TVC Price TC TR MR MC;1,000 $15,000 $25 33000 25000 - -;2,000 20,000 24 38000 48000 23 5;3,000 30,000 23 48000 69000 21 10;4,000 50,000 22 68000 88000 19 20;5,000 80,000 20 98000 100000;21 30;(a.) If;software can only be produced in the quantities above, what should be the;production level if the producer operates in a monopolistic competitive market;where the price of software at each possible quantity is also listed above?;Why? (Show all work).(b.);What should be the production level if fixed costs rose to $48,000 per month?;Explain.(TCO;F);(a.);Suppose nominal GDP in 1999 was $100 billion and in 2001 it was $260;billion. The general price index in 1999;was 100, and in 2001 it was 180. Between;1999 and 2001, the real GDP rose by what percent?;(b.);Use the following scenario to answer questions (b1) and (b2).;In;a given year in the United States, the total number of residents is 230;million, the number of residents under the age of 16 is 38 million, the number;of institutionalized adults is 15 million, the number of adults who are not;looking for work is 27 million, and the number of unemployed is 12 million.;(b1.) Refer to the data in the above;Scenario. What is the size of the labor;force in the United States for the given year? (b2.) Refer to the data in the above;Scenario. What is the unemployment rate;in the United States for the given year? (TCO G and H);(a.);What are the arguments for and against the use of fiscal policy to fight;inflation, lower unemployment, and raise GDP (Keynesian and Monetarist)?(b.) Any change in the;economy?s total expenditures would be expected to translate into a change in;GDP that was larger than the initial change in spending. This phenomenon is;known as the multiplier effect. Explain how the multiplier effect works. (c.);You are told that 80 cents out of every extra dollar pumped into the economy;goes toward consumption (as opposed to saving). Estimate the GDP impact of a;positive change in government spending that equals $10 billion. (TCO G);(a.);Third National Bank is fully loaned up with reserves of $20,000 and demand;deposits equal to $100,000. The reserve ratio is 20%. Households deposit $5,000;in currency into the bank. How much excess reserves does the bank now have, and;what is the maximum amount of new money that can be created in the banking;system as a result of this deposit? Show;all work. (b.);What is the discount rate in the banking system, and explain how the Fed;manipulates this rate in order to achieve macroeconomic objectives. TCO;E and I) Let the exchange rate be;defined as the number of dollars per British pound. Assume there is a decrease in U.S. interest;rates relative to that of Britain.;(a.) Would;this event cause the demand for the dollar to increase or decrease relative to;the demand for the pound? Why?(a.) Has;the dollar appreciated or depreciated in value relative to the pound?(c.);Does this change in the value of the dollar make imports cheaper or more;expensive for Americans? Are American;exports cheaper or more expensive for importers of U.S. goods in Great;Britain? Illustrate by showing the price;of a U.S. cell phone in Britain, before and after the change in the exchange;rate. (d.);If you had a business exporting goods to Britain, and;U.S. interest rates fell as they have in this example, would you plan to expand;production or cut back? Why?

 

Paper#57386 | Written in 18-Jul-2015

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