Macroeconomics 1102 Discussion Question 5 Part (a) Consumption function: is the relation of consumption with its determinants. Graphically drawn as:. Mathematically it is written as: C = C + c(Y – T) C: Consumption Spending C: Exogenous Consumption c : Marginal Propensity to Consume (0 < c < 1) Y: Aggregate Income T: Taxes Explaining the main components: Exogenous consumption: factors other than disposable income that affect consumption. So when consumers feel optimistic
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Question 1: Assume that Econoland produces haircuts and shirts with inputs of labor. Econoland has 1000 hours of labor available. A haircut requires ½ hour of labor‚ while a shirt requires 5 hours of labor. Construct Econolands PPF. Answer 1: To construct Econolands Production Possibility Frontier (PPF) we first need to understand what is a PPF. A production possibilities frontier (PPF) is a graph showing the different quantities of two goods that an economy can efficiently produce with limited
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Classical and Keynesian Economic Theories Economics can be defined as a social science concerned primarily with description and analysis of the production‚ distribution‚ and consumption of goods and services. There are two main schools of thought when it comes to economics: Classical and Keynesian economics. Each theory takes a different approach to the economic study‚ but neither approach is flawless. First‚ looking at the Classical economics theory‚ it is based largely on the thought that free
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a) The price of natural gas‚ a resource used by manufacturers throughout the United States‚ doubles. Price increases because‚ the companies that sell the spiral notebooks need to mark up their price in order to keep afloat with the rising cost of natural gas. Demand is not affected. The determinant for demand on the TRIBE chart in this scenario would be related goods and services‚ since the price for a good that is used to produce spiral notebooks is increasing‚ thus leading to an increase in the
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Macroeconomics Exam 1 Instructor: Prof. Phelps Name: Results: Class: Period: Date: Read each question carefully then circle the correct answer. When you are finished transfer the answers to the Scantron sheet. Make sure that you enter your name on both the exam and the scantron sheet. You have 1 hour to complete the exam. 1. For economists‚ the word "utility" means: a) versatility and flexibility. b) rationality. c) pleasure or satisfaction.** d) purposefulness
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1. From the definition of GDP we arrive at the following expression: c + i + g + x-m = y = c + s + t Discuss the three important economic relationships that can be derived from this expression related to the definition of GDP and explain each carefully. The expression above depicts two different ways to come up with real GDP for a country. The left side of the expression explains expenditure side of computing real GDP which can be rewritten as: y = c + i + g +x – m In real terms‚ it could
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Starbucks Macro-Environmental Analysis Starbucks is very well positioned to take advantage of sustained income due to a variety of strategic macro-environmental variables affecting its performance. Starbucks stage is the entire world‚ therefore must take into consideration the local countries current technological‚ economic‚ cultural‚ and political/legal environment‚ but also the interplay between countries as well. Starbucks cannot simply adapt completely policies and marketing
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Origin of Earth and Evoluation of the Environment MODULE - 1 Environment through Ages 1 ORIGIN OF EARTH AND EVOLUTION OF THE ENVIRONMENT We live on a beautiful planet called earth‚ along with a wide variety of plants‚ animals and other organisms. Our earth‚ however‚ is part of a vast universe. The universe is about 15 to 20 billion years old. The age of the earth is approximately 4 to 5 billion years‚ while human beings evolved only around 2 million years ago. In this lesson‚ you shall learn
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autotrophic and heterotrophic. Autotrophic organisms make their own food by the process of photosynthesis e.g. plants. Heterotrophic organisms cannot make their own food (i.e. cannot carry out photosynthesis)‚ therefore must eat other organisms to get their nutrients e.g. animals. A food chain is the feeding relationship among organisms or the series of living organisms that eat each other. A food chain shows the transfer of energy from one organism to another. In drawing a food chain‚ we use
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Guide 1. Definitions a. Metabolism- The process by whichc a living organism takes energy from its surroundings and uses it to sustain itself‚ develop and grow. b. Photosynthesis-the process by which an organism uses the energy from the sun to produce its own food c. Autotrophs- organisms that are able to produce their own food d. Heterotrophs- organisms that cannot make their own food and must obtain it from other organisms e. respiration -- the process by which food is converted into usable
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