I need help with macroeconomics

profileDre_fingerz

Answer the following from the Problems Appendix in the back of your textbook on pp. 326-328, and upload your answers through Blackboard:   Chapter 3: Questions 1 and 10    Chapter 4: Questions 2, 3, 4, and 12

 

 

CHAPTER 3

 

QUESTION 1

 

Determine whether each of the following would increase or decrease the opportunity cost for mothers who choose not to work outside the home. Explain your answer.

 

a.       Higher levels of education for women

 

Increase the opportunity cost. This is because the foregone option which is a raise in the education levels has gone up and hence the benefits from the foregone opportunity are more.

 

b.      Higher unemployment rates for women

 

Decrease in the opportunity costs. This is because the foregone opportunity was employment whose value/rate of employment has gone down and hence he won’t be losing so much.

 

c.       Higher average pay levels for women

 

Increase in the opportunity cost. The foregone option in this scenario is employment whose value has gone up since the average pay levels for women have gone up.

 

d.      Lower demand for labour in industries that traditionally employ large numbers of women

 

Decrease in the opportunity cost. This is because in the scenario, the foregone option is employment. The industries that employed women have a low demand for the women to employ. The choice she chose was to be a stay home mum is more beneficial since the demand for labour is down.

 

QUESTION 10

 

Suppose taxes are related to income as follows

 

Income                                 Taxes

 

$ 1,000                                  $ 200

 

$    2,000                                 $ 350

 

$    3,000                                 $ 450

 

 

 

 

 

What percentage of income is paid in  taxes at each level

 

$1000 = 200/1000*100

 

            = 20%

 

$2,000 = 350/2000*100

 

             =35%

 

$3,000 = 450/3000*100

 

               =15%

 

a.       Is the tax rate progressive, proportional or regressive

 

Progressive tax rates

 

b.      What is the margin tax rate on the first $1,000 of income?

 

=20/100*1000

 

=200

 

   The second $1,000?

 

= 35/100*1000

 

=350

 

                 The third $1000

 

                   = 15/100*1000

 

                    = 150

 

                                  

 

  CHAPTER FOUR

 

QUESTION 2

 

For each of the following pair of goods, determine whether the goods are substitutes, compliments or unrelated

 

a.       Peanut butter and jelly – substitute goods

 

b.      Private and public transportation – substitute goods

 

c.       Coke and Pepsi -  substitute goods

 

d.      Alarm clocks and automobiles-unrelated goods

 

e.       Golf clubs and golf balls-complementary goods

 

 

 

 

 

QUESTION 3

 

List five things that are held constant along a market demand curve, and identify the change that would shift the demand curve to the right-that is what would increase demand.

 

Factors that are held constant include:

 

Ø  Income of the consumer

 

Ø  Change in taste and preferences

 

Ø  Season

 

Ø  Future expectations of the market

 

Ø  Prices of related goods

 

Changes that would shift the demand curve to the right include:

 

Ø  Rise in the income of consumers

 

Ø  Peak season of the product

 

Ø  Fall in price of the complementary product

 

Ø  Rise in price of a substitute

 

Ø  Change in preference and taste and they now prefer the subject product

 

 

 

QUESTION 4

 

Why is a firm willing and able to increase the quantity supplied as the product price increases?

 

This is because there is an increase in the profit margin since increased supply means that there is more making of profit. This could be because the production costs of mass goods is lower.

 

QUESTION 12

 

Assume the market for corn is depicted as in the table below

 

a.       Complete the table below

 

b.      What market pressure occurs when quantity demanded exceeds quantity supplied? Explain.

 

Upward pressure. This is because the pressure caused by demand exceeding supply leads to an increase in the price of the product.

 

c.       What market pressure occurs when quantity supplied exceeds quality demanded. Explain

 

Downward pressure. This is because the supply is more than demanded and hence a reduction in price.

 

d.      What is the equilibrium price?

 

$ 2.20

 

e.       What could change the equilibrium price?

 

An increase in the demand of a product exceeding the supply of the product

 

An increase in supply exceeding the amount that is being supplied.

 

f.        At each price in the first column of the table below, how much is sold?

 

   $1.80 = 200                                 $ 2.40 = 230 

 

   $2.00 = 230                                  $2.60 = 200

 

   $2.20 = 270                                   $ 2.80 = 180                   

 

 

 

 

 

 

 

 

 

                    

 

Price per bushel

  ($)

Quantity demanded

(millions of bushels)

Quantity supplied

(millions of bushels)

Surplus/

shortage

Will price rise or fall

1.80

320

200

120

Rise in price

2.00

300

230

70

Rise in price

2.20

270

270

0

Price remains constant

2.40

230

300

70

Fall in price

2.60

200

330

130

Fall in price

2.80

180

350

170

Fall in price

 

    • 8 years ago
    • 20
    Answer(1)

    Purchase the answer to view it

    blurred-text
    NOT RATED
    • attachment
      microecon.docx