Microeconomics: Principles & Policy
14th Edition
ISBN: 9781337794992
Author: William J. Baumol, Alan S. Blinder, John L. Solow
Publisher: Cengage Learning
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Chapter 2, Problem 5DQ
To determine
To compare output produced by large and small firms.
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Microeconomics: Principles & Policy
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- Reflect on the changes in China. Can the country continue to be a manufacturing floor for the rest of the world as more Chinese move up in their income categories? What are the implications of the country’s incredible growth?arrow_forwardGo to a recent issue of The Economist magazine. In the back of each issue is a section called “economic indicators.” That section lists the most recent growth data for a substantial number of countries. Which countries around the world are growing most rapidly according to the most recent data? Which countries around the world are growing more slowly? Flip through the stories in The Economist to see if there is any explanation for the pattern that you observe. Write a brief essay on current general economic conditions around the world.arrow_forwardThe overall cost of living is a lot less in China than it is in the USA or Europe. Why might this be?arrow_forward
- "Given the rate at which scientists are making new discoveries, we will soon reach the point that no further discoveries can be made. Economic growth will come to a stop.” Do you believe this to be an accurate statement? If so, why? If not, why?arrow_forwardA new fertilizer formula improves crop yields. What would be the impact on the country's production function?arrow_forwardIn 1989, America's GDP per capita was approximately 30,000 (measured in today's dollars). How much higher in percentage terms was America's GDP per capita in 2015?arrow_forward
- The local agriculture industry in Trinidad and Tobago has been declining for much of the past 30 years. Several initiatives were launched to tackle the main issues that farmers face (labour shortage, capital, thief, infrastructure, water, etc) and many have failed. Today the sector contributes about 1% to total GDP and we import over 75% of our food. However, we have a few bright spots in agriculture (primary)—poultry, egg, pineapples, water melons, paw paw and pig production—we are almost self-sufficient. 1. If you were asked to use the blue ocean strategy to tackle the issues outlined above, can you describe a new way to deal with those problems (best to choose one problem) by proposing a new start-up? How will it work differently from the current model that farmers use? (Please focus on production of commodities NOT retail or wholesale) (150 words) Make sure you are suggesting your new company can deal with one (though not all) of the issues.arrow_forwardWhat are the current productivity trends in Australia?arrow_forwardEconomics Suppose that there are drastic technological improvements in shoe production at Home such that shoe factories can operate almost completely with computer-aided machines.Consider the following data for the Home country: Computers: Sales revenue = ?c?? = 100 Payments to labor = ??? = 50 Payments to capital = ??? = 50 Percentage decrease in the price = ∆??⁄?? = 0% Shoes: Sales revenue = ???? = 100 Payments to labor = ??? = 5 Payments to capital = ??? = 95 Percentage increase in the price = ∆??⁄?? = 50% a. Which industry is capital intensive? Is this a realistic scenario (i.e., are some industries capital-intensive in some countries and labor- intensive in others)?b. Given the percentage changes in output prices above, calculate the percentage change in the rental on capital.c. How does the magnitude of this change compare with that of labor?d. Which factor gains in real terms, and which factor loses?arrow_forward
- Propose one explanation for why the fastest-growing region will increase faster than other regionsarrow_forwardMany countries import considerable amounts of goods and services from other countries. Yet economists argue that a nation can enjoy a high standard of living only if it can produce a large quantity of goods and services itself. Can you reconcile these two facts?arrow_forwardIn reality, the economies of most countries are mixed rather than being pure market or command economies. Explain the reason for thisarrow_forward
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