Suppose an economy produces steel, wheat, and oil. The steel industry produces $100,000 inrevenue, spends $4,000 on oil, $10,000 on wheat, pays workers $80,000. The wheat industryproduces $150,000 in revenue, spends $20,000 on oil, $10,000 on steel, and pays workers$90,000. The oil industry produces $200,000 in revenue, spends $40,000 on wheat, $30,000 onsteel, and pays workers $100,000. There is no government. There are neither exports norimports, and none of the industries accumulate or decumulate inventories. Output not sold toother sectors is sold as final goods.1. Summarize this information in a table similar to the one in the lecture notes.2. Calculate GDP using the production and income methods. Show your calculations.3. A government is introduced. First consider this policy: the government taxes oilproducers $10,000, and distributes this revenue to workers. Recalculate GDP using theincome approach.4. Now consider this policy: the government taxes oil producers $10,000, and uses therevenue to purchase steel. (Assume that total steel production is unchanged.)Recalculate GDP.5. Now assume that the wheat producer uses $10,000 of imported fertilizer. Output isunchanged. There are no exports. Again, calculate GDP using the production and incomemethods. Show your calculations.

2) Gross Domestic Product or GDP is the sum total of the money value of all goods and services…

Answered: Suppose an economy produces steel,…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1. How does an increase in labor-productivity increase income? a. An increase in productivity, increases the marginal product of labor which increases the demand for labor. As demand for labor increases, the wage rate increases. b. An increase in productivity, decreases the marginal product of labor which increases the demand for labor. As demand for labor increases, the wage rate increases. c. An increase in productivity, increases the marginal product of labor which decreases the demand for labor. As demand for labor decreases, the wage rate increases. d. An increase in productivity, increases the marginal product of labor which decreases the demand for labor. As demand for labor decreases, the wage rate decreases.
Why are prices of agricultural commodities volatile? Discuss, drawing on economic theory and using examples. taking the wheat market as an example. What happens to the income of all wheat growers if the wheat supplied increases, with no other changes? What happens to the income of all wheat growers if the wheat supplied decreases, with no other changes?
1. Suppose an economy produces steel, wheat, and oil. The steel industry produces $80,000 in revenue, spends $4,000 on oil, $8,000 on wheat, pays workers $60,000. The wheat industry produces $120,000 in revenue, spends $20,000 on oil, $10,000 on steel, and pays workers $80,000. The oil industry produces $180,000 in revenue, spends $20,000 on wheat, $20,000 on steel, and pays workers $80,000. There is no government. There are neither exports nor imports, and none of the industries accumulate or deaccumulate inventories. Calculate GDP using the production and income approaches. Please provide what rules/formulas are used to solve this and the final answer.
Consider the given simple economy. Sheepnip Co. makes sheep feed. Better-bald Inc. purchases sheep feed for the sheep it raises and sells wool. Sweeter Sweaters Inc. makes and sells wool sweaters. Sheepnip Co. Better-bald Inc. Sweeter Sweaters Inc. $0.00 $1900 $0.00 $0.00 $0.00 $3150 $700 $300 $550 $400 $100 $50 $700 $100 $650 $100 $750 $800 What is the total payments (income) to factors of Better-bald Inc.? Sheep feed Wool Wages Interest payments Rent Profits What is the total payments (income) to factors of Sweeter Sweaters Inc.? What is the GDP for this economy?
Consider the given simple economy. Sheepnip Co. makes sheep feed. Better-bald Inc. purchases sheep feed for the sheep it raises and sells wool. Sweeter Sweaters Inc. makes and sells wool sweaters. Sheepnip Co. Better-bald Inc. Sweeter Sweaters Inc. $0.00 $1900 $0.00 $0.00 $0.00 $3150 $700 $300 $550 Interest payments $400 $100 $50 Rent $700 $100 $650 Profits $100 $750 $800 What is the total payments (income) to factors of Better-bald Inc.? Sheep feed Wool Wages What is the total payments (income) to factors of Sweeter Sweaters Inc.? What is the GDP for this economy? S
Let's think of an economy with two industries and these industries be water and electricity companies. Electricity company, electricity using water and electricity; The water company also produces water using water and electricity. With the output of both companies measured in TL, 0.1 TL electricity and 0.1 TL water is required to produce 1 TL of electricity, 0.8 TL electricity and 0.2 TL water to produce 1 TL water. As the demand of the foreign sector is 18.000 TL electricity and 12.000 TL water production, X1 = total output of the electricity company, X2 = total output of the water company, electricity and waterCalculate the total output required for the companies to meet both external and internal demand by any matrix method.
25. Did you know that Peanut butter cookies can be made with just 3 ingredients: sugar, eggs, and peanut butter? Suppose that the Superior Nut Company imports peanuts for $3,000,000 and crushes them into peanut butter that it sells to Carlo's Bakery for $5,000,000. Carlo's Bakery imports eggs and sugar for $4,000,000 and uses the ingredients to make peanut butter cookies which it sells for $15,000,000. If you use the expenditure on final goods method to calculating GDP then the contribution to GDP here is (expenditure on final goods) – (expenditure on imports) = $8,000,000. If you use the value added method you calculate the value added by each company and add them together. It should give you the same result. What was the value added by Carlo's Bakery? (yes, it is in the millions and you have to type the Os)
1. Demand in two perfectly competitive markets increases by the same amount in each market. In market A, the demand is an elastic demand. In market B, the demand is an inelastic demand. Everything else is the same in both markets. In which market will the effect on the total spending in the market be the greatest? a. The effects on total spending will be the same in each market.b. Total spending will change by more in market A.c. Total spending will change by more in market B.d. One cannot tell what the relative changes in total spending will be.
Q3. Forecast the demand for the rice for a country for the year 2019 on the basis of 7-year data given in table: Year 2012 2013 2014 2015 2016 2017 2018 Population (millions) 10 12 15 20 25 30 40 Rice consumed (million tonnes) 40 50 60 70 80 90 100
A firm produces a good and generates $6 million in receipts. Wages are $1 million, rent is $500,000, and interest payments are $1 million. Then A. profits are $3.5 million, the cost of production is $6 million, and households receive income equal to $6 million. O B. profits are $1.5 million, the cost of production is $6 million, and households receive income equal to $2.5 million. C. profits are $500,000, the cost of production is $2.5 million, and households receive income equal to $4.5 million. O D. profits are $500,000, the cost of production is $5 million, and households receive income equal to $4.5 million.
Suppose that United States produces 10, 000, 000 barrels of oil and 1,000 bushels of wheat each week. Suppose that China produces 11305 barrels of oil and 11305 bushels of wheat each week. In autarky, what is the largest amount of wheat United States can consume every week?
uestion 3 How will an increase in labor productivity affect equilibrium in the labor market? O The demand for labor will decrease because fewer workers will be needed to produce the same output. The equilibrium wage and quantity of labor will decrease. O The demand for jobs will increase and the equilibrium wage and quantity of labor will increase. O The supply of labor will increase and the equilibrium wage and quantity of labor will increase. O The demand for labor will increase and the equilibrium wage and quantity of labor will increase.

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