CH-8.Ex-2. Key Question Suppose an economy’s real GDP is $30,000 in year 1 and $31,200 in year 2. What is the growth rate of its real GDP? Assume that population is 100 in year 1 and 102 in year 2. What is the growth rate of GDP per capita?
CH-8.EX-11. Key Question If the CPI was 110 last year and is 121 this year, what is this year’s rate of inflation? What is the “rule of 70”? How long would it take for the price level to double if inflation persisted at (a) 2, (b) 5, and (c) 10 percent per year?
According to McConnell and Brue, the rule of 70 is known to give the ability to find the number of years it will take for some measure to double, given its annual percentage increase. This is achieved by dividing the percentage increase into the number 70 (McConnell & Brue, 2005).
CH-20.EX-2. Key Question Graph the accompanying demand data, and then use the midpoint formula for Ed to determine price elasticity of demand for each of the four possible $1 price changes. What can you conclude about the relationship between the slope of a curve and its elasticity? Explain in a nontechnical way why demand is elastic in the northwest segment of the demand curve and inelastic in the southeast segment.
Demand is considered elastic, when the price is higher and demand is low, and is inelastic when the price drops and thus reducing income.
CH-22.EX-7 Key Question A firm has fixed costs of $60 and variable costs as indicated in the table on the following page. Complete the table and check your calculations by referring to question 4 at the end of Chapter 23. a. Graph total fixed cost, total variable cost, and total cost. Explain how the law of diminishing returns influences the shapes of the variable-cost and total-cost...