Macroeconomics Multiple Questions - Fill in the table below The current wage is \$100 and the price of output(Q is \$30 Each box is worth of a point Enter

# Macroeconomics Multiple Questions - Fill in the table below...

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Fill in the table below. The current wage is \$100 and the price of output (Q) is \$30. Each box is worth ½ of a point. Enter whole numbers only (no commas, no decimals, no dollar signs) and if a value is negative, be sure to enter the negative sign. L Q MP L MRP Marginal Profit Total Profit 0 0 - - - - - - - - - - - - - - - - - - - - - 0 1 6 6 180 80 80 2 14 8 240 140 220 3 19 5 150 50 270 4 23 4 120 20 290 5 26 3 90 -10 280 6 28 2 60 - 40 240 2. Use the table from question 1 to complete the next six questions. Enter the correct values in the boxes below. Enter only whole numbers (no commas, no decimals, no dollar signs). Each fill-in-the- blank below is worth 3 points. This profit maximizing firm will hire 3 workers. 3. This profit maximizing firm will produce 22 units of output. 4. This firm’s maximum profit equals 60 . Now suppose that the wage falls to \$170. You will need to recalculate the values from the table, given this new wage, to answer the questions below. This profit maximizing firm will now hire 4 workers. 6. This profit maximizing firm will now produce 28 units of output. 7. This firm’s maximum profit now equals 160 . 8. Use the following information to answer the next nine questions. Each fill-in-the-blank is worth 3 points. If your answer is in decimal form, enter it with 2 decimal places. For example, if your answer is .4, enter it into the fill-in-the-blank as .40, or if your answer is 1.4, enter it into the fill-in-the-blank as 1.40. If there are no decimals in your answer, you will simply enter the number; so if your answer is 2, enter 2 with no decimals. Do not use commas. Suppose the economy is characterized as follows: AE = C + I + G + (X-M) C = 800 + .75(Y – T) - 30 (r) I = 600 – 50(r) G = 300 X- M = -25 T = 80 r = 5 Price level P is fixed at 1 (P=1) I=600–50(5) = 350. C=800+ .75(Y – 80) - 30 (5) C=800+0.75Y–60–150 C=590+0.75Y AE = C + I + G + (X-M) AE = 590+0.75Y+350+300-25 AE= 0.75Y+1215 Equilibrium Output C=590+0.75Y I = 350 The equilibrium condition is: Y = C+I Replace C with its expression and I with 350 to get: Y = 590 + 0.75 Y + 350 Y=590+0.75Y+450 0.25Y=940 0.25Y=1040 Y=3,760 Y=4,160 Equilibrium Consumption C=590+0.75(3760) C=590+0.75(4,160) C=3,410 C=3,710 Use the information above to get expressions for the consumption function and the AE equation.  #### You've reached the end of your free preview.

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