This preview shows page 1. Sign up to view the full content.
ECO202: Tutorial Worksheet 11
1.
Assume that typical consumers in Mexico and Canada buy the quantities and pay the prices
indicated in the accompanying table:
Bread
Car Services
Price
Quantity
Price
Quantity
Mexico
1 peso
400
7 pesos
300
Canada
$1
1000
$2
2000
a.
Compute Canadian consumption per capita in Canadian dollars.
b.
Compute Mexican consumption per capita in pesos.
c.
Suppose a peso is worth 20 cents ($0.20). Compute Mexican consumption per capita in
dollars.
d.
Using the purchasing power parity method and Canadian prices and quantities (see the
Focus box on page 263 of your text), compute Mexican consumption per capita in
dollars.
e.
Under each of the methods used in (c) and (d), how much lower is the standard of living
in Mexico than in Canada? Does the choice of method make a difference?
2.
Consider the production function
N
K
Y
=
.
a.
Compute output when K = 49 and N = 81.
b.
If both capital and labor double, what happens to output?
c.
This is the end of the preview. Sign up
to
access the rest of the document.
This note was uploaded on 12/02/2011 for the course ECON eco200 taught by Professor Wolfson during the Spring '11 term at University of Toronto.
 Spring '11
 Wolfson

Click to edit the document details