N. Gregory Mankiw
In this chapter,
look for the answers to these questions:
What determines how much of a good a country will
import or export?
Who benefits from trade? Who does trade harm? Do
1. After 10years, richland real gdp=11046, poorland = 6719.After 20 years, richland
gdp = 12202, poorland = 9030. So approximately poorland takes 30(35->by
solving equation) years to catch up with richland.
2.a Increases by 2.499 times
Base year prices expenditure this year price exp
a) cpi next year=1020/950 =1.074
b) worse of
inflation for 1991=4.2%
c ambiguous, since chocolate can be a kind of top for ice cream(substitutes)
2a supplies will increase(supply curve shifts right)
b supplies will increase(supply curve shifts right)
c supplies will inc
2a. GDP will increase by $1 billion.
b. GDP will increase by $1 billion.(no change)
c. GDP will increase by $1 billion.
d. GDP will increase by $1 billion.(no change)
e. No effect
3 GDP= 100x200+50x100+550x100+200x100
We can get the same answer b
Solutions to Assignment 5
1. a. Consumption increases because a refrigerator is a good purchased by a
b. Investment increases because a house is an investment good.
c. Consumption increases because a car is a good purchased by a hous
Solutions to Assignment 4
37. a. The extra traffic is a negative externality because it imposes a cost on other
b. Figure 1 shows the market for theater tickets. The value of the external cost is
the vertical distance between the priva
(c)Ambiguous. They can be substitute or complement .As some may enjoy eating
chocolate and ice cream together.
2. (a) The US Market supply curve for corn will shift rightwards due to the
improvement of techni
1. Teds opportunity cost of washing a car is equal to waxing 1/3 units of
car while Toms opportunity cost of washing a car is equal to waxing
1/2 units of car. As Ted opportunity cost of washing a car is lower than
that of Tom, he has a comparative advant
Consumption expenditure: $600
Investment expenditure: $100+($125-$100)+$100 = $225
Government purchase expenditure: $200
Net exports: $75-$50 = $25
Thus , GDP= $600+$225+$200+$25 =$1050
7. nominal GDP in year 2010= $5 x 100 +$20 x 300 + $20 x 100