EBK ESSENTIALS OF ECONOMICS
7th Edition
ISBN: 8220102452107
Author: Mankiw
Publisher: CENGAGE L
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Chapter 15, Problem 1QCMC
To determine
The contribution to
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Question 25
Classify each of the following items as a final good or an intermediate good, and classify the expenditure on each final good as consumption expenditure or investment:
Item 1. New aircraft bought by Southwest Airlines
Item 2. Jet engines bought by Boeing
Item 3. The ringtone you bought today
Item 4. A new apartment building
Item 1 is _______ and item 2 is _______.
A.
an intermediate good;
an intermediate good
B.
a final good that is investment;
an intermediate good
C.
a final good that is investment;
a final good that is consumption expenditure
D.
an intermediate good;
a final good that is consumption expenditure
Item 3 is _______ and item 4 is _______.
A.
a final good that is consumption expenditure;
a final good that is investment
B.
a final good that is consumption expenditure;
an intermediate good
C.
a final good that is investment;
a final good that is investment
D.
a final good that is…
Suppose you have the following information about production levels of
Ibs. of caviar and bottles of wine, and the market-clearing prices for each
of the nine allocations:
5.
Caviar
Wine
Pricecaviar
Pricewine
GDP
Allocation
$50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
$166.67
187.50
$350.00
175.00
A
90
100
B
80
200
214.29
250.00
300.00
116.67
87.50
70
300
60
400
E
50
500
70.00
375.00
500.00
58.33
50.00
F
40
600
G
30
700
H
20
800
750.00
43.75
I
10
900
1500.00
38.89
A. How much wine must be sacrificed to produce 1 more lb. of caviar?
B. Is allocation point A efficient? (As in class, prove your conclusion with math)
C. Which allocation point is efficient? (As in class, prove your conclusion with
math)
D. Suppose government assesses a tax of $40 per bottle of wine, but no tax on caviar.
i)
what will be the new equilibrium? Why?
ii)
how much of the tax is forward shifted? Explain
iii)
how much of the tax is backward shifted? Explain
Chapter 15 Solutions
EBK ESSENTIALS OF ECONOMICS
Ch. 15.1 - Prob. 1QQCh. 15.2 - Prob. 2QQCh. 15.3 - Prob. 3QQCh. 15.4 - Prob. 4QQCh. 15.5 - Prob. 5QQCh. 15 - Prob. 1QRCh. 15 - Prob. 2QRCh. 15 - Prob. 3QRCh. 15 - Prob. 4QRCh. 15 - Prob. 5QR
Ch. 15 - Prob. 6QRCh. 15 - Prob. 7QRCh. 15 - Prob. 8QRCh. 15 - Prob. 1QCMCCh. 15 - Prob. 2QCMCCh. 15 - Prob. 3QCMCCh. 15 - Prob. 4QCMCCh. 15 - Prob. 5QCMCCh. 15 - Prob. 6QCMCCh. 15 - Prob. 1PACh. 15 - Prob. 2PACh. 15 - Prob. 3PACh. 15 - Prob. 4PACh. 15 - Prob. 5PACh. 15 - Prob. 6PACh. 15 - Prob. 8PACh. 15 - Prob. 9PACh. 15 - Prob. 10PACh. 15 - Prob. 11PA
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