Quantitative Reasoning for Business

Topics: Gross domestic product, Variable cost, Inflation Pages: 5 (904 words) Published: August 23, 2010

Order of Operations and Dependent and Independent Variables

Melissa Barron
Phoenix University
QRB/501

Chapter 7 Study Question 12

12. Key Question The following table shows nominal GDP and an appropriate price index for a group of selected years. Compute real GDP. Indicate in each calculation whether you are inflating or deflating the nominal GDP data.

Nominal GDP,Price IndexReal GDP,
Year Billions(1996-100) Billions

1960$527.422.19$2,376.85
1968$911.526.29$3,467.1
1978$2295.948.22$4,761.3
1988$4742.580.22$5,911.9
1998$8790.2103.22$8,515.8

Chapter 8 Study Question 2 & 11

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?

A. ( 2 year – 1 year ) / 1 year x 100 =B. ( 102 – 100 ) / 100 x 100 = (31,200 – 30,000) / 30,000 x 100 ( 2 ) / 100 x 100 = 1,200 / 30,000 x 1002%
4%

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. A. 121 – 110 x 100 =

110
11 x 100 =
110
0.1 x 100 =
10%
B. The Rule of 70 tells us that we can find the number of years it will take for some measure to double, given it’s annual percentage increase, by dividing that percentage increase into the number 70. C. A) 2B) 5 C) 10

70 = 70 = 70 =
2 5 10
= 35 = 14 = 7

Chapter 22 Study Question 7
Total Total Total Total Average Average Average Marginal Product Fixed Cost Variable Cost Cost Fixed Cost Variable Cost Total Cost Cost 0 $60 $0 $60 $0 $0 $0 $0 1 $60 $45 $105 $60 $45 $105 $45 2 $60 $85 $145 $30 $42.5 $72.5 $40 3 $60 $120 $180 $20 $40 $60 $35 4 $60 $150 $210 $15 $37.5 $52.5 $30 5 $60 $185 $245 $12 $37 $49 $35 6 $60 $225 $285 $10 $37.5 $47.5 $40 7 $60 $270 $330 $8.6 $38.6 $47.14 $45 8 $60 $325 $385 $7.5 $40.63 $48.13 $55 9 $60 $390 $450 $6.7 $43.33 $50 $65 10 $60 $465 $525 $6 $46.5 $52.5 $75

Chapter 3 Exercise E3.6
E3.6. ROI Analysis Using DuPont Model.
A. Firm D has net income of $27,900
sales of $930,000
average total assets $465,000
Calculate the firm’s margin , turnover , and ROI.
Return on
Investment = Margin x Turnover
Net income x Sales
Sales Average total...
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