Economics (Irwin Economics)
21st Edition
ISBN: 9781259723223
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Chapter 42, Problem 5DQ
To determine
The vicious circle of poverty and the factors of rapid growth rate.
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(a) unemployment in the originating nation, (b) remittances
* How might the output and income gains from immigration
shown by the simple immigration model be affected by
themployment in the originating nation, (b) remittances
inmigrants to the home country, and (c) backflows of
migrants to the home country? LO23.3
migrants to the home country? LO23.3
shown by the simple immigration model be affected by
6. LO 2 Suppose that z, the marginal product of efficiency units of labour, increases in the
endogenous growth model. What effects does this have on the rates of growth and the
levels of human capital, consumption, and output? Explain your results.
A software company in Silicon Valley uses programmers (labor) and computers (capital) to produce apps for mobile devices. The firm estimates that when it comes to labor, MPL = 5 apps per month while PL = $1,000 per month. And when it comes to capital, MPC = 8 apps per month while PC = $1,000 per month. If the company wants to maximize its profits, it should: LO16.5 a. Increase labor while decreasing capital. b. Decrease labor while increasing capital. c. Keep the current amounts of capital and labor just as they are. d. None of the above.
Chapter 42 Solutions
Economics (Irwin Economics)
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- 4. What are the four supply factors of economic growth? What is the demand factor? What is the efficiency factor? Illustrate these factors in terms of the production possibilities curve. LO8.3arrow_forward3. Suppose that there are two countries with dif- ferent levels of total factor productivity, and that these differences exist because of barriers to technology adoption in the low-productivity country. Also suppose that these two countries do not trade with each other. Now, suppose that residents of each country were free to live in either country. What would happen, and what conclusions do you draw from this?arrow_forward"Consider the simple production model studied in class, but with different exponents. Suppose that the production function is Cobb-Douglas. The exponent on capital is 0.1 and the exponent on labor is 0.9. The data for this economy is A=10, KO=300 and the initial population is LO-30. We will assume that everyone in this country works so that population equals employment and per-person GDP equals per-worker GDP. Now suppose that the country receives foreign aid that is used to invest in infrastructure and electric vehicles. As a result, over the next few years, the economyos capital stock doubles to K1=600. Fortunately, no one is killed during the hurricane. In the Capital market the Demand will and the Supply will As a result, the rental rate will Shift to the Right; Remain unaffected; Increase Shift to the Left; Remain unaffected; Fall Shift to the Left; Shift to the Right; Fall Remain unaffected; Shift to the Right; Fallarrow_forward
- "Consider the simple production model studied in class, but with different exponents. Suppose that the production function is Cobb-Douglas. The exponent on capital is 0.1 and the exponent on labor is 0.9. The data for this economy is A=10, K0-300 and the initial population is LO-30. We will assume that everyone in this country works so that population equals employment and per-person GDP equals per-worker GDP. Now suppose that the country receives foreign aid that is used to invest in infrastructure and electric vehicles. As a result, over the next few years, the economyos capital stock doubles to K1=600. Fortunately, no one is killed during the hurricane. In the initial final equilibrium, per-worker GDP will be..." Between 12.3% and 14.4% higher than in the initial equilibrium. Between 7.0% and 8.0% higher than in the initial equilibrium. Between 4.4% and 6.6% lower than in the initial equilibrium. None of the above.arrow_forwardIf the rate of total factor productivity growth is 3%, the growth rate of the capital stock is 4%, the growth rate of the labor force is 2%, and the share of capital is .5, then the growth rate of output per worker is 4%, while the growth rate of output is O 2%. the growth rate of output is 4%, while the growth rate of output per worker is O 2%. None of the above the growth rate of output is 6%, while the growth rate of output per worker is O 4%. the growth rate of output per worker is 6%, while the growth rate of output is 4%.arrow_forwardIf Real GDP was $9,542 billion in year 2 and it had been $9,300 billion in year 1, what was the approximate economic growth rate during this time period? Select one: O a. 9.7 percent O b. 2.4 percent O c. 3.5 percent O d. 2.6 percentarrow_forward
- Explain why U.S. potential GDP per worker per week is greater than that in Europe. What could induce Europeans to work the same hours as Americans and would that close the gap between potential GDP per worker in the two economies? U.S. potential GDP per worker per week is greater than that in Europe because O A. U.S. workers work fewer hours on average but they are more productive than Europeans O B. U.S. workers are more productive per hour of work and they work longer hours than Europeans C. the supply of labor in America is smaller than the supply of labor in Europe O D. the United States uses less capital but they use it more effectively Click to select your answer and then click Check Answer. 2. parts remaining Clear All MacBook Air 80 888 000 000 esc F1 F2 F3 F4 F5 F6 F7 F8 ! @ # $ 1 2 3 4 5 6 7 Q W E Y tab A S D F G H * 00 T Rarrow_forwardSelect one or more: O a. If Country C's GDP per capita rises from $2,500 to 7,500, and Country D's GDP per capita rises from $6,000 to 18,000, the ratio of GDP per capita between the two countries is unchanged. O b. If a country's GDP doubles every 50 years on a ratio scale graph against time it will rise at an increasing rate. O c. Country B is growing a higher percentage rate than Country A, but Country A is 5 times richer than Country B. On a linear scale graph against time the gap between the two lines must be narrowing. O d. Country E is growing at the same percentage rate as Country F, but Country E is 3 times richer than Country F. On a log scale graph against time the gap between the two lines will be constant.arrow_forwardSuppose that the share of population employed in Country B is 60 percent, and that Countries B and D have the same real GDP per capita. Based on the information in the table, what share of Country D's population must be employed? Country Population (millions) Average Labor Productivity ($) 2,000 A B с O E Select one: a. 24 percent O b. 12 percent O c. 8.3 percent O d. 83.3 percent 100 150 75 250 95 10,000 25,000 50,000 60,000arrow_forward
- 7. LO 2, 4 Suppose that a consumer can earn a higher wage rate for working overtime. That is, for the first q hours the consumer works, he or she receives a real wage rate of w, and for hours worked more than q he or she receives w, where W2>W1. Suppose that the consumer pays no taxes and receives no nonwage income, and he or she is free to choose hours of work. (a) Draw the consumer's budget constraint, and show his or her optimal choice of consump- tion and leisure (b) Show that the consumer would never work hours, or anything very close to q Explain the intuition behind this. (c) Determine what hours. happens if the overtime wage rate w2 increases. Explain your results in terms of income and substitution effects. You must consider the case of a worker who initially works overtime, and a worker who initially does not work overtime.arrow_forwardConsider the economies of Tralfamadore and Sporon, both of which produce agricultural products using only land and labour. The following tables show the supply of land, population size, and real GDP for these two economies from 2020 to 2023. Complete the last column of the following two tables by calculating real GDP per capita for the two economies. Tralfamadore Land Real GDP (Dollars) Real GDP per Capita (Dollars) Year (Hectares) Population 2020 20,000 500 4,500 2021 20,000 1,000 10,000 2022 20,000 1,500 16,500 2023 20,000 2,000 24,000 Sporon Land Real GDP Real GDP per Capita (Dollars) Year (Hectares) Population (Dollars) 2020 20,000 1,000 15,000 2021 20,000 2,000 28,000 2022 20,000 3,000 36,000 2023 20,000 4,000 40,000 Rapid population growth tends to threaten economic growth in economies with higher or lower land-labour ratios.arrow_forwardAccording to the text, European countries' growth rates of real GDP per capita Select one: O a. decreased in the first two decades after 1980 and then increased in the following two decades. O b. decreased during each of the four decades beginning 1980. O c. followed a random pattern during the four decades beginning 1980. O d. remained constant during each of the four decades beginning 1980.arrow_forward
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