曼昆版宏观经济学第一课课后答案英文版
曼昆《宏观经济学》(第6、7版)课后习题详解(第1章 宏观经济学科学)
曼昆《宏观经济学》（第6、7版）第1篇导言课后习题详解跨考网独家整理最全经济学考研真题，经济学考研课后习题解析资料库，您可以在这里查阅历年经济学考研真题，经济学考研课后习题，经济学考研参考书等内容，更有跨考考研历年辅导的经济学学哥学姐的经济学考研经验，从前辈中获得的经验对初学者来说是宝贵的财富，这或许能帮你少走弯路，躲开一些陷阱。
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一、概念题1．宏观经济学（macroeconomics）答：宏观经济学与微观经济学相对，是一种现代的经济分析方法。
它以国民经济总体作为考察对象，研究经济生活中有关总量的决定与变动，解释失业、通货膨胀、经济增长与波动、国际收支及汇率的决定与变动等经济中的宏观整体问题，所以又称之为总量经济学。
宏观经济学的中心和基础是总需求—总供给模型。
具体来说，宏观经济学主要包括总需求理论、总供给理论、失业与通货膨胀理论、经济增长与经济周期理论、开放经济理论、宏观经济政策等内容。
对宏观经济问题进行分析与研究的历史十分悠久，但现代意义上的宏观经济学直到20世纪30年代才得以形成和发展起来。
现代宏观经济学诞生的标志是凯恩斯于1936年出版的《就业、利息和货币通论》。
宏观经济学在20世纪30年代奠定基础，二战后逐步走向成熟并得到广泛应用，20世纪60年代后的“滞胀”问题使凯恩斯主义的统治地位受到严重挑战并形成了货币主义、供给学派、理性预期等学派对立争论的局面，20世纪90年代新凯恩斯主义的形成又使国家干预思想占据主流。
宏观经济学是当代发展最为迅猛，应用最为广泛，因而也是最为重要的经济学学科。
2．实际GDP（real GDP）答：实际GDP指用以前某一年的价格作为基期的价格计算出来的当年全部最终产品的市场价值。
它衡量在两个不同时期经济中的产品产量变化，以相同的价格或不变金额来计算两个时期所生产的所有产品的价值。
在国民收入账户中，以2010年的价格作为基期来计算实际GDP，意味着在计算实际GDP时，用现期的产品产量乘以2010年的价格，便可得到以2010年价格出售的现期产出的价值。
曼昆中级宏观经济学(英文) (1)
Macroeconomics Chapter 1
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Macroeconomics Chapter 1
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Macroeconomics Chapter 1
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Macroeconomics Chapter 1
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Macroeconomics Chapter 1
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没有单一的模型能够说明我们关注的所 有问题：
Why does the cost of living keep rising? Why are millions of people unemployed? Why are there recessions? Can
policymakers do anything? Should they? What is the government deficit? How does
对古典经济学理论的著名 批评：
长期是对当前事情的一个误导。在长期中我们
都会死。如果在暴风雨季节，经济学家只能告
诉我们，暴风雨在长期中会过去，海洋必将平
静，那么他们给自己的任务就太容易且无用了
总需求与总供给 41
曼昆微观经济学课后练习英文答案完整版
曼昆微观经济学课后练习英文答案集团标准化办公室：[VV986T-J682P28-JP266L8-68PNN]the link between buyers’ willingness to pay for a good and the demandcurve.how to define and measure consumer surplus.the link between sellers’ costs of producing a good and the supply curve.how to define and measure producer surplus.that the equilibrium of supply and demand maximizes total surplus in amarket.CONTEXT AND PURPOSE:Chapter 7 is the first chapter in a three-chapter sequence on welfare economics and market efficiency. Chapter 7 employs the supply and demand model to develop consumer surplus and producer surplus as a measure of welfare and market efficiency. These concepts are then utilized in Chapters 8 and 9 to determine the winners and losers from taxation and restrictions on international trade.The purpose of Chapter 7 is to develop welfare economics—the study of how the allocation of resources affects economic well-being. Chapters 4 through 6 employed supply and demand in a positive framework, which focused on the question, “What is the equilibrium price and quantity in a market” This chapter now addresses the normative question, “Is the equilibrium price and quantity in a market the best possible solution to the resource allocation problem, or is it simply the price and quantity that balance supply and demand” Students will discover that under most circumstances the equilibrium price and quantity is also the one that maximizes welfare.KEY POINTS:Consumer surplus equals buyers’ willingness to pay for a good minus the amount they actually pay for it, and it measures the benefit buyers get from participating in a market. Consumer surplus can be computed by finding the area below the demand curve and above the price.Producer surplus equals the amount sellers receive for their goods minus their costs of production, and it measures the benefit sellers get from participating in a market. Producer surplus can be computed by finding the area below the price and above the supply curve.An allocation of resources that maximizes the sum of consumer and producer surplus is said to be efficient. Policymakers are often concerned with the efficiency, as well as the equality, of economic outcomes.The equilibrium of supply and demand maximizes the sum of consumer andproducer surplus. That is, the invisible hand of the marketplace leadsbuyers and sellers to allocate resources efficiently.Markets do not allocate resources efficiently in the presence of market failures such as market power or externalities.CHAPTER OUTLINE:I. Definition of welfare economics: the study of how the allocation of resources affects economic well-being.A. Willingness to Pay1. Definition of willingness to pay: the maximum amount that a buyer will pay for a good.2. Example: You are auctioning a mint-condition recording of Elvis Presley’s first album. Four buyers show up. Their willingness to pay is as follows:If the bidding goes to slightly higher than $80, all buyersdrop out except for John. Because John is willing to paymore than he has to for the album, he derives some benefitfrom participating in the market.3. Definition of consumer surplus: the amount a buyer is willing to payfor a good minus the amount the buyer actually pays for it.4. Note that if you had more than one copy of the album, the price in the auction would end up being lower (a little over $70 in the case of two albums) and both John and Paul would gain consumer surplus.B. Using the Demand Curve to Measure Consumer Surplus1. We can use the information on willingness to pay to derive a demandmarginal buyer . Because the demand curve shows the buyers’ willingness to pay, we can use the demand curve to measure c onsumer surplus.C. How a Lower Price Raises Consumer Surplussurplus because they are paying less for the product than before (area A on the graph).b. Because the price is now lower, some new buyers will enter the market and receive consumer surplus on these additional units of output purchased (area B on the graph).D. What Does Consumer Surplus Measure?1. Remember that consumer surplus is the difference between the amount that buyers are willing to pay for a good and the price that they actually pay.2. Thus, it measures the benefit that consumers receive from the good as the buyers themselves perceive it.III. Producer SurplusA. Cost and the Willingness to Sell1. Definition of cost: the value of everything a seller must give up to produce a good .2. Example: You want to hire someone to paint your house. You accept bidsfor the work from four sellers. Each painter is willing to work if the priceyou will pay exceeds her opportunity cost. (Note that this opportunity costthus represents willingness to sell.) The costs are:sellers will drop out except for Grandma. Because Grandma receives more than she would require to paint the house, she derives some benefit from producing in the market.4. Definition of producer surplus: the amount a seller is paid for a good minus the seller’s cost of providing it.5. Note that if you had more than one house to paint, the price in the auction would end up being higher (a little under $800 in the case of two houses) and both Grandma and Georgia would gain producer surplus.ALTERNATIVE CLASSROOM EXAMPLE:Review the material on price ceilings from Chapter 6. Redraw themarket for two-bedroom apartments in your town. Draw in a priceceiling below the equilibrium price.Then go through:consumer surplus before the price ceiling is put into place. consumer surplus after the price ceiling is put into place. You will need to take some time to explain the relationship between the producers’ willingness to sell and the cost of producing the good. The relationship between cost and the supply curve is not as apparent as the relationship between the It is important to stress that consumer surplus is measured inmonetary terms. Consumer surplus gives us a way to place amonetary cost on inefficient market outcomes (due to governmentB. Using the Supply Curve to Measure Producer Surplus1. We can use the information on cost (willingness to sell) to derive a2.the cost of the marginal seller. Because the supply curve shows the sellers’ cost (willingness to sell), we can use the supply curve to measure producer surplus.C. How a Higher Price Raises Producer Surplussurplus because they are receiving more for the product than before (area C on the graph).b. Because the price is now higher, some new sellers will enter the market and receive producer surplus on these additional units of output sold (area D on the graph).D. Producer surplus is used to measure the economic well-being of producers,ALTERNATIVE CLASSROOM EXAMPLE:Review the material on price floors from Chapter 6. Redraw the marketfor an agricultural product such as corn. Draw in a price supportabove the equilibrium price.Then go through:producer surplus before the price support is put in place.producer surplus after the price support is put in place.Make sure that you discuss the cost of the price support tomuch like consumer surplus is used to measure the economic well-being of consumers.IV. Market EfficiencyA. The Benevolent Social Planner1. The economic well-being of everyone in society can be measured by total surplus, which is the sum of consumer surplus and producer surplus:Total Surplus = Consumer Surplus + Producer SurplusTotal Surplus = (Value to Buyers – Amount Paid byBuyers) +(Amount Received by Sellers – Cost to Sellers)Because the Amount Paid by Buyers = Amount Received bySellers:2. Definition of efficiency: the property of a resource allocation of maximizing the total surplus received by all members of society .3. Definition of equality: the property of distributing economicprosperity uniformly the members of society .a. Buyers who value the product more than the equilibrium price will purchase the product; those who do not, will not purchase the product. Inother words, the free market allocates the supply of a good to the buyers who value it most highly, as measured by their willingness to pay.b. Sellers whose costs are lower than the equilibrium price will produce the product; those whose costs are higher, will not produce the product. Inother words, the free market allocates the demand for goods to the sellers who can produce it at the lowest cost.value of the product to the marginal buyer is greater than the cost to the marginal seller so total surplus would rise if output increases.Pretty Woman, Chapter 6. Vivien (Julia Roberts) and Edward(Richard Gere) negotiate a price. Afterward, Vivien reveals shewould have accepted a lower price, while Edward admits he wouldhave paid more. If you have done a good job of introducingconsumer and producer surplus, you will see the light bulbs gob. At any quantity of output greater than the equilibrium quantity, the value of the product to the marginal buyer is less than the cost to the marginal seller so total surplus would rise if output decreases.3. Note that this is one of the reasons that economists believe Principle #6: Markets are usually a good way to organize economic activity.C. In the News: Ticket Scalping1. Ticket scalping is an example of how markets work to achieve anefficient outcome.2. This article from The Boston Globe describes economist Chip Case’sexperience with ticket scalping.D. Case Study: Should There Be a Market in Organs?1. As a matter of public policy, people are not allowed to sell their organs.a. In essence, this means that there is a price ceiling on organs of $0.b. This has led to a shortage of organs.2. The creation of a market for organs would lead to a more efficientallocation of resources, but critics worry about the equity of a market system for organs.V. Market Efficiency and Market FailureA. To conclude that markets are efficient, we made several assumptions about how markets worked.1. Perfectly competitive markets.2. No externalities.B. When these assumptions do not hold, the market equilibrium may not be efficient.C. When markets fail, public policy can potentially remedy the situation. SOLUTIONS TO TEXT PROBLEMS:Quick Quizzes1. Figure 1 shows the demand curve for turkey. The price of turkey is P 1and the consumer surplus that results from that price is denoted CS. Consumer surplus is the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it. It measures the benefit to buyers ofparticipating in a market.Figure 1 Figure 22. Figure 2 shows the supply curve for turkey. The price of turkey is P 1and the producer surplus that results from that price is denoted PS. Producer surplus is the amount sellers are paid for a good minus the sellers’ cost of providing it (measured by the supply curve). It measures the benefit to sellers of participating in a market.It would be a good idea to remind students that there are circumstances when the market process does not lead to the most efficient outcome. Examples include situations such as when a firm (or buyer) has market power over price or when there areFigure 33. Figure 3 shows the supply and demand for turkey. The price of turkey is P, consumer surplus is CS, and producer surplus is PS. Producing more turkeys 1than the equilibrium quantity would lower total surplus because the value to the marginal buyer would be lower than the cost to the marginal seller on those additional units.Questions for Review1. The price a buyer is willing to pay, consumer surplus, and the demand curve are all closely related. The height of the demand curve represents the willingness to pay of the buyers. Consumer surplus is the area below the demand curve and above the price, which equals the price that each buyer is willing to pay minus the price actually paid.2. Sellers' costs, producer surplus, and the supply curve are all closely related. The height of the supply curve represents the costs of the sellers. Producer surplus is the area below the price and above the supply curve, which equals the price received minus each seller's costs of producing the good.Figure 43. Figure 4 shows producer and consumer surplus in a supply-and-demand diagram.4. An allocation of resources is efficient if it maximizes total surplus, the sum of consumer surplus and producer surplus. But efficiency may not be the only goal of economic policymakers; they may also be concerned about equitythe fairness of the distribution of well-being.5. The invisible hand of the marketplace guides the self-interest of buyers and sellers into promoting general economic well-being. Despite decentralized decision making and self-interested decision makers, free markets often lead to an efficient outcome.6. Two types of market failure are market power and externalities. Market power may cause market outcomes to be inefficient because firms may cause price and quantity to differ from the levels they would be under perfect competition, which keeps total surplus from being maximized. Externalities are side effects that are not taken into account by buyers and sellers. As a result, the free market does not maximize total surplus.Problems and Applications1. a. Consumer surplus is equal to willingness to pay minus the price paid. Therefore, Melissa’s willingness to pay must be $200 ($120 + $80).b. Her consumer surplus at a price of $90 would be $200 $90 = $110.c. If the price of an iPod was $250, Melissa would not have purchased one because the price is greater than her willingness to pay. Therefore, she would receive no consumer surplus.2. If an early freeze in California sours the lemon crop, the supply curve for lemons shifts to the left, as shown in Figure 5. The result is a rise in the price of lemons and a decline in consumer surplus from A + B + C to just A. So consumer surplus declines by the amount B + C.Figure 5 Figure 6In the market for lemonade, the higher cost of lemons reduces the supply of lemonade, as shown in Figure 6. The result is a rise in the price of lemonade and a decline in consumer surplus from D + E + F to just D, a loss of E + F. Note that an event that affects consumer surplus in one market oftenhas effects on consumer surplus in other markets.3. A rise in the demand for French bread leads to an increase in producer surplus in the market for French bread, as shown in Figure 7. The shift of the demand curve leads to an increased price, which increases producer surplusfrom area A to area A + B + C.Figure 7The increased quantity of French bread being sold increases the demandfor flour, as shown in Figure 8. As a result, the price of flour rises, increasing producer surplus from area D to D + E + F. Note that an event that affects producer surplus in one market leads to effects on producer surplus in related markets.Figure 84. a.Figure 9b. When the price of a bottle of water is $4, Bert buys two bottles of water. His consumer surplus is shown as area A in the figure. He values hisfirst bottle of water at $7, but pays only $4 for it, so has consumer surplus of $3. He values his second bottle of water at $5, but pays only $4 for it, so has consumer surplus of $1. Thus Bert’s total consumer surplus is $3 + $1 = $4, which is the area of A in the figure.c. When the price of a bottle of water falls from $4 to $2, Bert buys three bottles of water, an increase of one. His consumer surplus consists of both areas A and B in the figure, an increase in the amount of area B. He gets consumer surplus of $5 from the first bottle ($7 value minus $2 price), $3from the second bottle ($5 value minus $2 price), and $1 from the third bottle ($3 value minus $2 price), for a total consumer surplus of $9. Thus consumer surplus rises by $5 (which is the size of area B) when the price of a bottle of water falls from $4 to $2.5. a.Figure 10b. When the price of a bottle of water is $4, Ernie sells two bottles of water. His producer surplus is shown as area A in the figure. He receives $4 for his first bottle of water, but it costs only $1 to produce, so Ernie has producer surplus of $3. He also receives $4 for his second bottle of water, which costs $3 to produce, so he has producer surplus of $1. Thus Ernie’s total producer surplus is $3 + $1 = $4, which is the area of A in the figure.c. When the price of a bottle of water rises from $4 to $6, Ernie sells three bottles of water, an increase of one. His producer surplus consists of both areas A and B in the figure, an increase by the amount of area B. He gets producer surplus of $5 from the first bottle ($6 price minus $1 cost), $3 from the second bottle ($6 price minus $3 cost), and $1 from the third bottle ($6 price minus $5 price), for a total producer surplus of $9. Thus producer surplus rises by $5 (which is the size of area B) when the price of a bottle of water rises from $4 to $6.6. a. From Ernie’s supply schedule and Bert’s demand schedule, thean equilibrium quantity of two.b. At a price of $4, consumer surplus is $4 and producer surplus is $4, as shown in Problems 3 and 4 above. Total surplus is $4 + $4 = $8.c. If Ernie produced one less bottle, his producer surplus would decline to $3, as shown in Problem 4 above. If Bert consumed one less bottle, hisconsumer surplus would decline to $3, as shown in Problem 3 above. So total surplus would decline to $3 + $3 = $6.d. If Ernie produced one additional bottle of water, his cost would be $5, but the price is only $4, so his producer surplus would decline by $1. If Bert consumed one additional bottle of water, his value would be $3, but the price is $4, so his consumer surplus would decline by $1. So total surplus declines by $1 + $1 = $2.7. a. The effect of falling production costs in the market for stereos results in a shift to the right in the supply curve, as shown in Figure 11. As a result, the equilibrium price of stereos declines and the equilibriumquantity increases.Figure 11b. The decline in the price of stereos increases consumer surplus from area A to A + B + C + D, an increase in the amount B + C + D. Prior to the shift in supply, producer surplus was areas B + E (the area above the supply curve and below the price). After the shift in supply, producer surplus is areas E + F + G. So producer surplus changes by the amount F + G – B, which may be positive or negative. The increase in quantity increases producer surplus, while the decline in the price reduces producer surplus. Because consumer surplus rises by B + C + D and producer surplus rises by F + G – B, total surplus rises by C + D + F + G.c. If the supply of stereos is very elastic, then the shift of the supply curve benefits consumers most. To take the most dramatic case, suppose the supply curve were horizontal, as shown in Figure 12. Then there is no producer surplus at all. Consumers capture all the benefits of falling production costs, with consumer surplus rising from area A to area A + B.Figure 128. Figure 13 shows supply and demand curves for haircuts. Supply equals demand at a quantity of three haircuts and a price between $4 and $5. Firms A, C, and D should cut the hair of Ellen, Jerry, and Phil. Oprah’s willingnessto pay is too low and firm B’s costs are too high, so they do not participate. The maximum total surplus is the area between the demand and supply curves, which totals $11 ($8 value minus $2 cost for the first haircut, plus $7 value minus $3 cost for the second, plus $5 value minus $4 cost for the third).Figure 139. a. The effect of falling production costs in the market for computers results in a shift to the right in the supply curve, as shown in Figure 14. As a result, the equilibrium price of computers declines and the equilibrium quantity increases. The decline in the price of computers increases consumer surplus from area A to A + B + C + D, an increase in the amount B + C + D.Figure 14 Figure 15Prior to the shift in supply, producer surplus was areas B + E(the area above the supply curve and below the price). After theshift in supply, producer surplus is areas E + F + G. So producersurplus changes by the amount F + G – B, which may be positive ornegative. The increase in quantity increases producer surplus,while the decline in the price reduces producer surplus. Becauseconsumer surplus rises by B + C + D and producer surplus rises byF +G – B, total surplus rises by C + D + F + G.b. Because typewriters are substitutes for computers, the decline in the price of computers means that people substitute computers for typewriters, shifting the demand for typewriters to the left, as shown in Figure 15. The result is a decline in both the equilibrium price and equilibrium quantity of typewriters. Consumer surplus in the typewriter market changes from area A + B to A + C, a net change of C – B. Producer surplus changes from area C + D + E to area E, a net loss of C + D. Typewriter producers are sad about technological advances in computers because their producer surplus declines.c. Because software and computers are complements, the decline in the price and increase in the quantity of computers means that the demand for software increases, shifting the demand for software to the right, as shown in Figure 16. The result is an increase in both the price and quantity of software. Consumer surplus in the software market changes from B + C to A + B, a net change of A – C. Producer surplus changes from E to C + D + E, an increase of C + D, so software producers should be happy about the technological progress in computers.Figure 16d. Yes, this analysis helps explain why Bill Gates is one the world’s richest people, because his company produces a lot of software that is a complement with computers and there has been tremendous technological advance in computers.10. a. With Provider A, the cost of an extra minute is $0. WithProvider B, the cost of an extra minute is $1.b. With Provider A, my friend will purchase 150 minutes [= 150 –(50)(0)]. With Provider B, my friend would purchase 100 minutes [=150 – (50)(1)].c. With Provider A, he would pay $120. The cost would be $100 with Provider B.Figure 17d. Figure 17 shows the friend’s demand. With Provider A, he buys 150minutes and his consumer surplus is equal to (1/2)(3)(150) – 120= 105. With Provider B, his consumer surplus is equal to(1/2)(2)(100) = 100.e. I would recommend Provider A because he receives greater consumer surplus.11. a. Figure 18 illustrates the demand for medical care. If each procedure has a price of $100, quantity demanded will be Q1 procedures.Figure 18b. If consumers pay only $20 per procedure, the quantity demanded will be Qprocedures. Because the cost to society is $100, the number of procedures 2performed is too large to maximize total surplus. The quantity that maximizes total surplus is Q1 procedures, which is less than Q2.c. The use of medical care is excessive in the sense that consumers get procedures whose value is less than the cost of producing them. As a result, the economy’s total surplus is reduced.d. To prevent this excessive use, the consumer must bear the marginal cost of the procedure. But this would require eliminating insurance. Another possibility would be that the insurance company, which pays most of the marginal cost of the procedure ($80, in this case) could decide whether the procedure should be performed. But the insurance company does not get the benefits of the procedure, so its decisions may not reflect the value to the consumer.。
曼昆微观经济学英文版课后练习题第一章知识交流
曼昆微观经济学英文版课后练习题第一章知识交流Chapter 1Ten Principles of EconomicsMultiple Choice1. The word that comes from the Greek word for "one who manages a household" isa. market.b. consumer.c. producer.d. economy.ANS: D DIF: 1 REF: 1-0TOP: Economy MSC: Definitional2. The word “economy” comes from the Greek word oikonomos, which meansa. “environment.”b. “production.”c. “one who manages a household.”d. “one who makes decisions.”ANS: C DIF: 1 REF: 1-0TOP: Economy MSC: Definitional3. Resources area. scarce for households but plentiful for economies.b. plentiful for households but scarce for economies.c. scarce for households and scarce for economies.d. plentiful for households and plentiful for economies.ANS: C DIF: 1 REF: 1-0TOP: Resources, Scarcity MSC: Interpretive4. Economics deals primarily with the concept ofa. scarcity.b. poverty.c. change.d. power.ANS: A DIF: 1 REF: 1-0TOP: Scarcity MSC: Definitional5. Which of the following questions is not answered by the decisions that every society must make?a. What determines consumer preferences?b. What goods will be produced?c. Who will produce the goods?d. Who will consume the goods?ANS: A DIF: 2 REF: 1-0TOP: Economies MSC: Interpretive6. The overriding reason as to why households and societies face many decisions is thata. resources are scarce.b. goods and services are not scarce.c. incomes fluctuate with business cycles.d. people, by nature, tend to disagree.ANS: A DIF: 2 REF: 1-0TOP: Scarcity MSC: Interpretive7. The phenomenon of scarcity stems from the fact thata. most economies’ production methods are not very good.b. in most economies, wealthy people consume disproportionate quantities of goods and services.c. governments restricts production of too many goods and services.d. resources are limited.ANS: D DIF: 2 REF: 1-0TOP: Scarcity MSC: Interpretive8. Approximately what percentage of the world's economies experience scarcity?a. 25%b. 50%c. 75%d. 100%ANS: D DIF: 1 REF: 1-0TOP: Scarcity MSC: Interpretive9. When a society cannot produce all the goods and services people wish to have, it is said that the economy isexperiencinga. scarcity.b. shortages.c. inefficiencies.d. inequities.ANS: A DIF: 2 REF: 1-0TOP: Scarcity MSC: Interpretive10. For society, a good is not scarce ifa. at least one individual in society can obtain all he or she wants of the good.b. firms are producing the good at full capacity.c. all members of society can have all they want of the good.d. those who have enough income can buy all they want of the good.ANS: C DIF: 1 REF: 1-0TOP: Scarcity MSC: Interpretive11. Which of the following products would be consideredscarce?a. golf clubsb. Picasso paintingsc. applesd. All of the above are correct.ANS: D DIF: 2 REF: 1-0TOP: Scarcity MSC: Interpretive12. Economics is the study ofa. production methods.b. how society manages its scarce resources.c. how households decide who performs which tasks.d. the interaction of business and government.ANS: B DIF: 1 REF: 1-0TOP: Economies, Scarcity MSC: Definitional13. Economics is the study ofa. how society manages its scarce resources.b. the government's role in society.c. how a market system functions.d. how to increase production.ANS: A DIF: 1 REF: 1-0TOP: Economies, Scarcity MSC: Definitional14. In most societies, resources are allocated bya. a single central planner.b. a small number of central planners.c. those firms that use resources to provide goods and services.d. the combined actions of millions of households and firms.ANS: D DIF: 1 REF: 1-0TOP: Resource allocation MSC: Interpretive15. The adage, "There is no such thing as a free lunch," isused to illustrate the principle thata. goods are scarce.b. people face tradeoffs.c. income must be earned.d. households face many decisions.ANS: B DIF: 2 REF: 1-1TOP: Tradeoffs MSC: Interpretive16. The adage, "There is no such thing as a free lunch," meansa. even people on welfare have to pay for food.b. the cost of living is always increasing.c. to get something we like, we usually have to give up another thing we like.d. all costs are included in the price of a product.ANS: C DIF: 1 REF: 1-1TOP: Tradeoffs MSC: Definitional17. Economists use the phrase "There is no such thing as a free lunch," to illustrate the principle thata. inflation almost always results in higher prices over time.b. nothing is free in a market economy.c. making decisions requires trading off one goal against another.d. if something looks too good to be true, it probably is not worth pursuing.ANS: C DIF: 2 REF: 1-1TOP: Tradeoffs MSC: Interpretive18. Which of the following statements best represents the principle represented by the adage, "There is no such thing asa free lunch"?a. Melissa can attend the concert only if she takes her sisterwith her.b. Greg is hungry and homeless.c. Brian must repair the tire on his bike before he can ride it to class.d. Kendra must decide between going to Colorado or Cancun for spring break.ANS: D DIF: 3 REF: 1-1TOP: Tradeoffs MSC: Applicative19. The principle that "people face tradeoffs" applies toa. individuals.b. families.c. societies.d. All of the above are correct.ANS: D DIF: 1 REF: 1-1TOP: Tradeoffs MSC: Applicative20. A typical society strives to get the most it can from its scarce resources. At the same time, the society attempts to distribute the benefits of those resources to the members of the society in a fair manner. In other words, the society faces a tradeoff betweena. guns and butter.b. efficiency and equity.c. inflation and unemployment.d. work and leisure.ANS: B DIF: 1 REF: 1-1TOP: Efficiency, Equity MSC: Interpretive21. Guns and butter are used to represent the classic societal tradeoff between spending ona. durable and nondurable goods.b. imports and exports.c. national defense and consumer goods.d. law enforcement and agriculture.ANS: C DIF: 1 REF: 1-1TOP: Tradeoffs MSC: Interpretive22. When society requires that firms reduce pollution, there isa. a tradeoff because of reduced incomes to the firms' owners and workers.b. a tradeoff only if some firms are forced to close.c. no tradeoff, since the cost of reducing pollution falls only on the firms affected by the requirements.d. no tradeoff, since everyone benefits from reduced pollution.ANS: A DIF: 3 REF: 1-1TOP: Tradeoffs MSC: Applicative23. A tradeoff exists between a clean environment and a higher level of income in thata. studies show that individuals with higher levels of income actually pollute less than low-income individuals.b. efforts to reduce pollution typically are not completely successful.c. laws that reduce pollution raise costs of production and reduce incomes.d. by employing individuals to clean up pollution, employment and income both rise.ANS: C DIF: 2 REF: 1-1TOP: Tradeoffs MSC: Applicative24. Which of the following phrases best captures the notion of efficiency?a. absolute fairnessb. equal distributionc. minimum wasted. equitable outcomeANS: C DIF: 1 REF: 1-1TOP: Efficiency MSC: Interpretive25. Which of the following is true?a. Efficiency refers to the size of the economic pie; equity refers to how the pie is divided.b. Government policies usually improve upon both equity and efficiency.c. As long as the economic pie continually gets larger, no one will have to go hungry.d. Efficiency and equity can both be achieved if the economic pie is cut into equal pieces.ANS: A DIF: 2 REF: 1-1TOP: Efficiency, Equity MSC: Interpretive26. Efficiency means thata. society is conserving resources in order to save them for the future.b. society's goods and services are distributed equally among society's members.c. society's goods and services are distributed fairly, though not necessarily equally, among society's members.d. society is getting the maximum benefits from its scarce resources.ANS: D DIF: 1 REF: 1-1TOP: Efficiency MSC: Definitional27. Economists use the word equity to describe a situation in whicha. each member of society has the same income.b. each member of society has access to abundant quantities of goods and services, regardless of his or her income.c. society is getting the maximum benefits from its scarce resources.d. the benefits of society's resources are distributed fairly among society's members.ANS: D DIF: 2 REF: 1-1TOP: Equity MSC: Interpretive28. Senator Smith wants to increase taxes on people with high incomes and use the money to help the poor. Senator Jones argues that such a tax will discourage successful people from working and will therefore make society worse off. An economist would say thata. we should agree with Senator Smith.b. we should agree with Senator Jones.c. a good decision requires that we recognize both viewpoints.d. there are no tradeoffs between equity and efficiency.ANS: C DIF: 2 REF: 1-1TOP: Efficiency, Equity MSC: Applicative29. Which of the following words and phrases best captures the notion of equity?a. minimum wasteb. maximum benefitc. samenessd. fairnessANS: D DIF: 1 REF: 1-1TOP: Equity MSC: Definitional30. When government policies are enacted,a. equity can usually be enhanced without an efficiency loss, but efficiency can never be enhanced without anequity loss.b. efficiency can usually be enhanced without an equity loss, but equity can never be enhanced without anefficiency loss.c. it is always the case that either efficiency and fairness are both enhanced, or efficiency and equity are bothdiminished.d. None of the above are correct.ANS: D DIF: 2 REF: 1-1TOP: Government, Efficiency, Equity MSC: Applicative31. A likely effect of government policies that redistribute income and wealth from the wealthy to the poor is that those policiesa. enhance equity.b. reduce efficiency.c. reduce the reward for working hard.d. All of the above are correct.ANS: D DIF: 2 REF: 1-1TOP: Government, Efficiency, Equity MSC: Interpretive32. When the government implements programs such as progressive income tax rates, which of the following is likely to occur?a. Equity is increased and efficiency is increased.b. Equity is increased and efficiency is decreased.c. Equity is decreased and efficiency is increased.d. Equity is decreased and efficiency is decreased.ANS: B DIF: 2 REF: 1-1TOP: Government, Efficiency, Equity MSC: Interpretive33. As a result of a successful attempt by government to cut the economic pie into more equal slices,a. it is easier to cut the pie, and therefore the economy can produce a larger pie.b. the government can more easily allocate the pie to those most in need.c. the pie gets smaller, and there will be less pie overall.d. government will spend too much time cutting and it causes the economy to lose the ability to produce enough pie for everyone.ANS: C DIF: 3 REF: 1-1TOP: Government, Efficiency, Equity MSC: Analytical34. When the government attempts to improve equity in an economy the result is oftena. an increase in overall output in the economy.b. additional government revenue since overall income will increase.c. a reduction in equity.d. a reduction in efficiency.ANS: D DIF: 2 REF: 1-1TOP: Government, Efficiency, Equity MSC: Interpretive。
曼昆宏观经济学英语课后题答案之欧阳与创编
CHAPTER 23: MEASURING A NATION’S INCOMETrue/False Indicate whether the statement is true or false.1. T he circular flow diagram describes all transactions between households andfirms in a simple economy and shows the equality of expenditures and income.ANSWER: TPOINTS: 0 / 12. G ross domestic product includes most items produced and sold illicitly.ANSWER: FPOINTS: 0 / 13. N et national product is the total income of a nation’s residents minus losses fromdepreciation.ANSWER: TPOINTS: 0 / 14. D isposable personal income is the income that households and unincorporatedbusiness have left after satisfying all their obligations to the government. Itequals personal income minus personal taxes and certain non-tax payments togovernment.ANSWER: TPOINTS: 0 / 15. T he purchase of new houses by households is included in the calculation ofpersonal consumption expenditures of GDP.ANSWER: FPOINTS: 0 / 1Multiple Choice Identify the choice that best completes the statement or answers the question.1. W hen GDP falls,a. income and expenditure must both fall.b. income and expenditure can both rise.c. income must fall, but expenditure may rise or fall.d. expenditure must fall, but income may rise or fall.ANSWER: APOINTS: 0 / 12. I ncome equals expenditure becausea. firms always pay out all their revenue as income to someone.b. each time a sale is made, there is a buyer and a seller.c. households own the factors of production used to generate incomes.d. All of the above are correct.ANSWER: BPOINTS: 0 / 13. I f a province makes the production and sale of illicit drugs legal, then GDPa. must increase.b. must decrease.c. wouldn't change.d. may increase or decrease.ANSWER: APOINTS: 0 / 14. W hen a government provides subsidies to encourage growth of smallbusinesses, the subsidies woulda. be included in GDP because they are invested by businesses.b. be included in GDP because they are a form of government spending.c. not be included in GDP because they are transfer payments.d. may or may not be included in GDP, depending on how the funds areused.ANSWER: CPOINTS: 0 / 15. D iesel fuel isa. always considered a final good.b. counted as an intermediate good if a company uses it to providetransportation services.c. counted as a final good if a farmer uses it to run a tractor to grow crops.d. Both b and c are correct.ANSWER: BPOINTS: 0 / 16. G ross domestic producta. is the market value of all final goods and services produced within acountry in a given period (usually a year)b. is the income in the hands of individuals after deducting income taxes;income available to households to spend and savec. is the value of goods and services purchased by all levels ofgovernment— federal, provincial, and local—in a given periodd. is the market value of all final goods and services produced by permanentresidents of a nation in a given time periodANSWER: APOINTS: 0 / 17. M acroeconomics is that branch of economics that studiesa. the conditions of individual marketsb. the influence of governments on individual marketsc. economy-wide phenomenad. only the private sector of the economyANSWER: CPOINTS: 0 / 18. S uppose that nominal GDP is $6,000 billion and real GDP is $3,000. What is theGDP price deflator?a. 125b. 150c. 200d. 250ANSWER: CPOINTS: 0 / 19. T he purchase of final goods and services by households is calleda. investmentb. public sector expenditurec. consumptiond. net exportsANSWER: CPOINTS: 0 / 110. I nvestment is the purchase of capital equipment, inventories, anda. structuresb. non-durable goodsc. depreciationd. import investmentANSWER: APOINTS: 0 / 111. T ransfer paymentsa. are included in GDP because they are forms of incomeb. are included in GDP because goods and services have been produced inthe transferc. are NOT included in the GDP because goods and services have not beenproduced in the transferd. are included in GDP because they represent the production of transfers ofgoods and services to foreign countriesANSWER: CPOINTS: 0 / 112. W hich of the following would be considered consumption expenditure?a. The Smiths buy a home built in 1990.b. The federal government pays the salary of a captain in the Armed Forces.c. The Hostlers buy a new car that was manufactured in Germany.d. The government buys food for its armed forces.ANSWER: CPOINTS: 0 / 113. T he method that measures GDP in relationship to the size of the population iscalleda. GNPb. worker GDPc. GDP per persond. capital GDPANSWER: CPOINTS: 0 / 114. T he components of GDP area. C + I + Gb. NX + G + Cc. C + G + NXd. C + I + G + NXANSWER: DPOINTS: 0 / 115. S uppose nominal GDP is $7700 and the GDP deflator is 110. Real GDP isa. $7700b. $7000c. $847,000d. $8470ANSWER: BPOINTS: 0 / 1Short Answer1. W hat are the components of gross domestic product (GDP)?RESPONSE:ANSWER: The components of GDP are: (1) consumption spending byhouseholds on goods and services, with the exception ofpurchases of new housing; (2) Investment spending on capitalequipment, inventories, and structures, including householdpurchases of new housing; (3) government purchases or spendingon goods and services by the local, provincial, and federal levelsgovernments; and (4) net exports which is spending ondomestically produced goods and services by foreigners (exports)minus spending on foreign goods and services by domesticresident (imports).POINTS: -- / 12. D ifferentiate between gross domestic product (GDP) and gross national product(GNP).RESPONSE:ANSWER: GDP is the value of all final goods and services produced within acountry in a given year; while GNP is the total income earned by anation’s permanent residents or nationals (that is, Canadians).GNP differs from GDP by including income that citizens of thenation (Canada) earned aboard, and excluding income thatforeigners earn in the particular country (E.g. in Canada).POINTS: -- / 13. D ifferentiate between real GDP and nominal GDP.RESPONSE:ANSWER: Nominal GDP is the value of all final goods and services produced within a country in a year and valued at current prices; and realGDP is the GDP valued at constant base year prices. Real GDPis not affected by changes in the level of prices, so it reflects onlychanges in the amounts being produced.POINTS: -- / 14. E xplain why GDP is not considered a perfect measure of well- being?RESPONSE:ANSWER: GDP is not considered a perfect measure of well-being becausesome of the factors that contribute to a good life areomitted. These would include: leisure time, the quality of theenvironment, the distribution of income, and the production ofgoods and services that did not pas through the market (forexample, housework done by the homemaker, and volunteer work) POINTS: -- / 15. H ow do economists measure economic growth?RESPONSE:ANSWER: Economists measure economic growth as the percentage changein real GDP from one period to another. This is because changesin real GDP reflect only changes in the amounts being produced.POINTS: -- / 1CHAPTER 24: MEASURING THE COST OF LIVINGTrue/False Indicate whether the statement is true or false.1. T he GDP deflator reflects the prices of goods and services bought byconsumers, and the consumer price index reflects the price of all final goods and services produced domestically.ANSWER: FPOINTS: 0 / 12. T he consumer price index compares the price of a fixed basket of goods andservices to the price of the basket in the base year. On the other hand, the GDP deflator compares the price of currently produced goods and services to the price of the same goods and services in the base years.ANSWER: TPOINTS: 0 / 13. I ndexation refers to the automatic correction of a dollar amount for the effects ofinflation by law or contract.ANSWER: TPOINTS: 0 / 14. L ong term contracts between firms and unions will sometimes include partial orcomplete indexation of the wage to the consumer price index. This is called a cost-of-living allowance clause.ANSWER: TPOINTS: 0 / 15. T he core inflation rate is the consumer price index with the exclusion of the mostvolatile components such as energy and food.ANSWER: TPOINTS: 0 / 1Multiple Choice Identify the choice that best completes the statement or answers the question.1. I n the CPI, goods and services are weighted according toa. how much a typical consumer buys of each item.b. whether the items are necessities or luxuries.c. how much of each item is produced in the domestic economy.d. how much is spent on them in the national income accounts.ANSWER: APOINTS: 0 / 12. B y not taking into account the possibility of consumer substitution, the CPIa. understates the standard of living.b. overstates the cost of living.c. neither overstates nor understates the cost of living.d. doesn't accurately reflect the cost of living, but it is unclear if it overstates orunderstates the cost of living.ANSWER: BPOINTS: 0 / 13. I f the prices of Brazilian-made shoes imported into Canada increases, thena. both Canada’s GDP deflator and it’s consumer price index will increase.b. neither Canada’s GDP deflator nor it’s consumer price index will increase.c. Canada’s GDP deflator will increase but its CPI will not increase.d. Canada’s consumer price index will increase, but its GDP deflator won’tchange.ANSWER: DPOINTS: 0 / 14. I f increases in the prices of Canadian car insurance causes the CPI to increase by3 percent, the GDP deflator will likely increase bya. more than 3 percent.b. 3 percent.c. less than 3 percent.d. All of the above are correct.ANSWER: CPOINTS: 0 / 15. T he real interest rate tells youa. how quickly your savings account will grow.b. how quickly the purchasing power of your savings account will grow.c. the size of your savings account.d. the purchasing power of your savings account.ANSWER: BPOINTS: 0 / 16. I nflation refers toa. a temporary increase in the price level due to higher tax ratesb. a large increase in food and gasoline pricesc. a situation in which the economy's overall price level is risingd. an increase in the purchasing power of the dollarANSWER: CPOINTS: 0 / 17. I f nominal interest rates increase from 8 percent to 10 percent while inflationincreases from 3 percent to 12 percenta. the real interest rate falls from 5 percent to –2 percentb. the real interest rate rises from –2 percent to 5 percentc. the real interest rate falls from 8 percent to 12 percentd. the real interest rate rises from 8 percent to 12 percentANSWER: APOINTS: 0 / 18. I f the nominal rate of interest is 10 percent and the rate of inflation is 3 percent,what is the real rate of interest?a. 13 percentb. 7 percentc. 3 percentd. –7 percentANSWER: BPOINTS: 0 / 19. T he consumer price index:a. measures price changes of raw materialsb. adjusts all prices of goods and services for five-year periodsc. measures the cost of goods and services bought by a typical consumerd. cannot measure price changes of intangible production such as servicesANSWER: CPOINTS: 0 / 110. I f the consumer price index (CPI) at the end of 1996 was 125 and the CPI at theend of 1997 was 131, then the rate of inflation during 1997 wasa. zero – prices were stable during 1997b. 4.8 percentc. 6.0 percentd. 125 percentANSWER: BPOINTS: 0 / 111. F rank's nominal income in 1998 is $45,000. Suppose the CPI in 1998 is 150. Whatis Frank's real income?a. $51,750b. $45,000c. $38,250d. $30,000ANSWER: DPOINTS: 0 / 112. A change in the price of imports bought by consumers will bea. reflected in the GDP deflatorb. reflected in GDPc. reflected in the CPId. reflected in net national incomeANSWER: CPOINTS: 0 / 113. A ll of the following but one are problems associated with the CPIa. substitution biasb. the introduction of new goods and servicesc. unmeasured quality changesd. The CPI is not based on a fixed basket of goods and servicesANSWER: DPOINTS: 0 / 114. W hich of the following is correct?a. The CPI is not based on a fixed basket of goods and services.b. The GDP deflator reflects the prices of all domestically produced goods andservices.c. The GDP deflator is based on a fixed basket of goods and services.d. The GDP deflator is subject to substitution bias.ANSWER: BPOINTS: 0 / 115. T he inflation ratea. is a measure of the cost of a basket of goods and services bought by firmsb. is the absolute change in prices between yearsc. is the percentage change in the price index from the preceding periodd. measures changes in incomes from one year to the nextANSWER: CPOINTS: 0 / 1Short Answer1. W hat is the consumer price index (CPI)? What are the three major items included inthe CPI?RESPONSE:ANSWER: The CPI is a measure of the overall cost of the goods and services bought by a typical consumer. The three major items included in theCPI are shelter, transportation and food.POINTS: -- / 12. H ow is the CPI computed?RESPONSE:ANSWER: First the basket of goods and services must be determined and also the relative importance of the various items to be included in thebasket. Then the prices of the various items in the basket aredetermined. The cost of the basket is then determined using the dataon prices and quantity. The base year is chosen, and the index forthe base year is computed using the quantities in the basket and thebase year prices. The index is calculated by taking the price of thebasket in the each year and dividing this by the price of the basket inthe base year. This ratio is then multiplied by 100.POINTS: -- / 13. D ifferentiate between the nominal rate of interest and the real rate of interest.RESPONSE:ANSWER: The nominal interest rate is the interest rate as usually reportedwithout a correction for the effects of inflation. The real interest rate isthe interest rate corrected for the effects of inflation. The real interestrate = nominal interest rate minus the inflation rate.POINTS: -- / 14. W hat is meant by the inflation rate? If the CPI in 1996 was 107.6 and in 1995 was105.9, calculate the inflation rate for 1996.RESPONSE:ANSWER: The inflation rate is the percentage change in the price index from the preceding period. The inflation rate for 1996 would be:POINTS: -- / 15. W hat are the problems associated with using the consumer price index to measurethe cost of living?RESPONSE:ANSWER: The problems are: (1) Prices do not change proportionately.Consumers respond by buying less of the goods whose prices haverisen by large amounts and by buying more of the goods whose pricehave risen by less, or even fallen. The index is computed using afixed basket of items, so theses changes in quantity would not bereflected in the basket. This is referred to as the substitution bias. (2)The CPI is developed using a fixed basket of goods and services,when new products are introduced during the time period that aparticular fixed basket is being used, these new products will not beincluded in calculation of the index. (3) The CPI does not measurequality changes. If the quality of a good deteriorates from one year tothe next, the value of the dollar falls, even if the price of the goodstays the same. Likewise, if the quality of the good increases fromone year to the next, the value of a dollar also rises. StatisticsCanada will try to adjust the price of the good to account for thequality change, but it is very difficult to measure quality.POINTS: -- / 1CHAPTER 25: PRODUCTION AND GROWTHTrue/False Indicate whether the statement is true or false.1. O ne way to raise future productivity is to invest less current resources in theproduction of capital.ANSWER: FPOINTS: 0 / 12. D iminishing returns occur when the benefits from an extra unit of output declinesas the quantity of output declines.ANSWER: FPOINTS: 0 / 13. M althusian theory states that an ever-increasing population would continuallystrain society’s ability to provide for itself. This doomed human beings to forever live in poverty.ANSWER: TPOINTS: 0 / 14. P roductivity growth is measured by real output per worker.ANSWER: TPOINTS: 0 / 15. T he primary reason that living standards are higher today than they were acentury ago is that technological knowledge has advanced.ANSWER: TPOINTS: 0 / 1Multiple Choice Identify the choice that best completes the statement or answers the question.1. O f the following countries, which grew the slowest over the last 100 years?a. Brazil.b. Mexico.c. Singapore.d. United States.ANSWER: DPOINTS: 0 / 12. O n average, each year of schooling raises a person's wage in Canada by abouta. 3 percent.b. 10 percent.c. 15 percent.d. 25 percent.ANSWER: BPOINTS: 0 / 13. T he primary reason that Canadian living standards are higher today than theywere a century ago is thata. more productive natural resources have been discovered.b. physical capital per worker has increased.c. technological knowledge has increased.d. human capital has increased.ANSWER: CPOINTS: 0 / 14. M any countries in Africa have low growth rates. This is partly due toa. few natural resourcesb. high trade barriers.c. low incomes, making it very difficult for them to grow.d. All of the above are correct.ANSWER: BPOINTS: 0 / 15. A government can encourage growth and, in the long run, raise the economy’sstandard of living by encouraginga. population growth.b. consumption spending.c. saving and investment.d. trade restrictions.ANSWER: CPOINTS: 0 / 16. D iminishing returns is the notion thata. as the stock of capital ages, the extra output produced decreasesb. as the stock of capital is increased, the extra output produced from anadditional unit of capital fallsc. as resources are used to produce capital goods, fewer additional capitalgoods can be producedd. you always get what you pay forANSWER: BPOINTS: 0 / 17. C ompared with richer countries, poorer countries are generally characterized bya. high real GDP per personb. political stabilityc. rapid population growthd. strongly enforced property rightsANSWER: CPOINTS: 0 / 18. W hich one of the following countries would most likely be considered a poorernation, using real GDP/person?a. Canadab. Germanyc. Japand. IndiaANSWER: DPOINTS: 0 / 19. W hich of the following factors would be most likely to encourage capitalformation in a poorer nation?a. the expectation of sustained high rates of inflation in the futureb. the expectation that property rights will remain securec. the expectation that a struggle between capitalist and socialist forces willlead to major structural change in the economyd. an increase in corporate taxes in order to finance an expandedgovernment welfare programANSWER: BPOINTS: 0 / 110. W hich of the following is most likely to cause the productivity of labour toincrease?a. higher money wage ratesb. a higher rate of investment in human and physical capitalc. more flexible working hours and improved retirement plansd. none of the aboveANSWER: BPOINTS: 0 / 111. S uppose that factory output rose from 50,000 units to 55,000 units while labourhours rose from 1100 to 1200. Which of the following is true?a. Labour productivity remained unchanged.b. Labour productivity increased slightly.c. Labour productivity decreased slightly.d. Labour productivity increased sharply.ANSWER: BPOINTS: 0 / 112. W hich of the following would be most likely to cause the real income per personof poorer countries to rise?a. a more rapid population growthb. a rapid rate of inflationc. an international minimum-wage lawd. an increase in foreign investment that enhanced the productivity of thelabour forceANSWER: DPOINTS: 0 / 113. I f a production function has constant returns to scale, then:a. doubling inputs will double output.b. doubling inputs will triple output.c. doubling inputs will cause output to increase, but the increase in outputwill be less than the increase in inputs.d. doubling inputs will decrease output.ANSWER: APOINTS: 0 / 114. T he most important source of rising living standards over time is:a. the increase in the size of the labour force.b. the increase in the labour force participation rate.c. the increase in productivity.d. the increase in human capital—the skills embodied in the work force.ANSWER: CPOINTS: 0 / 1Short Answer1. W hat is productivity and why is it important?RESPONSE:ANSWER: Productivity is the amount of goods and services produced fromeach hour of a worker’s time. It is the major determinant of thestandard of living of a country.POINTS: -- / 12. H ow is productivity determined?RESPONSE:ANSWER: Productivity is determined by a country’s physical capital, humancapital, natural resources and technological knowledge.POINTS: -- / 13. W hat is the World Bank and what are its functions?RESPONSE:ANSWER: The World Bank is an international organization that among otherthings encourages the flow of capital to poor countries. It obtainsfunds from the world’s advance counties and loans them to lessdeveloped countries so that they can invest in capitalinfrastructure. The World Bank offers advice to developingcountries on how the funds might best be used.POINTS: -- / 14. W hat are property rights? What role does property rights play in economicgrowth?RESPONSE:ANSWER: Property rights refer to the ability of people to exercise authorityover the resources they own. There must be an economy-widerespect for property rights for the price system or the free marketto work. Lack of respect for property rights or the enforcement ofproperty rights would not only cause political instability but wouldalso discourage savings and investment. These are necessary foreconomic growth.POINTS: -- / 15. D ifferentiate between inward-oriented policies and outward-oriented policies.RESPONSE:ANSWER: Inward-oriented policies are aimed at raising productivity and living standards within a county by avoiding interaction with the rest ofthe world. This approach involves the protection of domesticindustries to allow them to develop and grow without competitionfrom foreign firms. Outward-oriented policies are designed tointegrate countries into the world economy as international trade isconsidered to be a factor in generating economic growth.POINTS: -- / 1CHAPTER 26: SAVING, INVESTMENT, AND THE FINANCIAL SYSTEMTrue/False Indicate whether the statement is true or false.1. P rivate savings are the tax revenue that the government has left after paying forits spending; and public savings is the income that households have left afterpaying for taxes and consumption.ANSWER: FPOINTS: 0 / 12. A budget deficit is an excess of tax revenue over government spending; and abudget surplus is a shortfall of tax revenue from government spending.ANSWER: FPOINTS: 0 / 13. A budget surplus decreases the supply of loanable funds, increases theinterest rate, and stimulates investment.ANSWER: FPOINTS: 0 / 14. T he financial system is the group of institutions in the economy that help to matchone person’s savings with another person’s investment.ANSWER: TPOINTS: 0 / 15. A mutual fund is an institution that sells shares to the public and uses theproceeds to buy a selection, or portfolio, of various types of stocks, bonds, or both stocks and bonds.ANSWER: TPOINTS: 0 / 1Multiple Choice Identify the choice that best completes the statement or answers the question.1. W hich of the following is correct?a. Lenders buy bonds and borrowers sell them.b. Long-term bonds usually pay a lower interest rate than do short-term bondsbecause long-term bonds are riskier.c. Junk bonds refer to bonds that have been resold many times.d. None of the above are correct.ANSWER: APOINTS: 0 / 12. I n a closed economy, national saving equalsa. investment.b. income minus the sum of consumption and government expenditures.c. private saving plus public saving.d. All of the above are correct.ANSWER: DPOINTS: 0 / 13. I f the current market interest rate for loanable funds is below the equilibrium level,then there is aa. shortage of loanable funds and the interest rate will rise.b. surplus of loanable funds and the interest rate will rise.c. shortage of loanable funds and the interest rate will fall.d. surplus of loanable funds and the interest rate will fall.ANSWER: APOINTS: 0 / 14. S uppose that Parliament were to introduce a new investment tax credit. Whatwould happen in the market for loanable funds?a. The demand for loanable funds would shift left and interest rates fall.b. The demand for loanable funds would shift right and interest rates rise.c. The supply of loanable funds would shift left and interest rates rise.d. The supply of loanable funds would shift right and interest rates fall.ANSWER: BPOINTS: 0 / 15. I f Canada increases its budget deficit, it will reducea. private saving and so shift the supply of loanable funds left.b. investment and so shift the demand for loanable funds left.c. public saving and so shift the supply of loanable funds left.d. None of the above are correct.ANSWER: CPOINTS: 0 / 16. C rowding out refers toa. the increase in national saving that occurs when government runs a deficitb. the decrease in the real interest rates due to government borrowingc. a reduction in investment spending resulting from government borrowingd. a decrease in consumption spending resulting from government borrowingANSWER: CPOINTS: 0 / 17. F or a bank to be profitable, the loans it makes must _____ than the _____obtaining funds.a. cost more; price ofb. pay less interest; total revenue fromc. make more interest; total cost ofd. be less profitable; total revenue fromANSWER: CPOINTS: 0 / 18. L arge budget deficits will likelya. increase the nation's pool of savingb. decrease the nation's pool of savingc. have no impact on the nation's pool of savingd. improve the nation's trade balanceANSWER: BPOINTS: 0 / 19. T he supply curve of loanable funds isa. upward-sloping, reflecting the fact that savers need a higher rate of interestto coax them into lending moreb. downward-sloping, reflecting the fact that savers will increase their supplyfor loanable funds at lower rates of interestc. upward-sloping, reflecting the fact that savers will increase their saving atlower rates of interestd. None of the aboveANSWER: APOINTS: 0 / 110. L oanable funds area. the money in banks and other financial institutionsb. the amount of credit availablec. equal to the total value of capital in the economyd. available only to businessesANSWER: BPOINTS: 0 / 111. I f the market for loanable funds is not in equilibrium, which of the following factors。
曼昆经济学原理英文版答案
曼昆经济学原理英文版答案As the creator of the Baidu Wenku document "Principles of Economics by Mankiw (English Version) Answers", I would like to provide a comprehensive guide to the solutions of the questions in the book. This document aims to help students better understand the principles of economics and improve their problem-solving abilities.Chapter 1: Ten Principles of Economics。
1. People face trade-offs.2. The cost of something is what you give up to get it.3. Rational people think at the margin.4. People respond to incentives.5. Trade can make everyone better off.6. Markets are usually a good way to organize economic activity.7. Governments can sometimes improve economic outcomes.8. The standard of living depends on a country's production.9. Prices rise when the government prints too much money.10. Society faces a short-run trade-off between inflation and unemployment.Chapter 2: Thinking Like an Economist。
曼昆宏观经济经济学第九版英文原版答案
曼昆宏观经济经济学第九版英文原版答案3(总13页)--本页仅作为文档封面，使用时请直接删除即可----内页可以根据需求调整合适字体及大小--Answers to Textbook Questions and ProblemsCHAPTER3?National Income: Where It Comes From and Where It Goes Questions for Review1. The factors of production and the production technology determine theamount of output an economy can produce. The factors of production are the inputs used to produce goods and services: the most important factors are capital and labor. The production technology determines how much output can be produced from any given amounts of theseinputs. An increase in one of the factors of production or animprovement in technology leads to an increase in the economy’soutput.2. When a firm decides how much of a factor of production to hire ordemand, it considers how this decision affects profits. For example, hiring an extra unit of labor increases output and thereforeincreases revenue; the firm compares this additional revenue to the additional cost from the higher wage bill. The additional revenue the firm receives depends on the marginal product of labor (MPL) and the price of the good produced (P). An additional unit of labor produces MPL units of additional output, which sells for P dollars per unit.Therefore, the additional revenue to the firm is P ? MPL. The cost of hiring the additional unit of labor is the wage W. Thus, this hiring decision has the following effect on profits:ΔProfit= ΔRevenue –ΔCost= (P ? MPL) –W.If the additional revenue, P ? MPL, exceeds the cost (W) of hiring the additional unit of labor, then profit increases. The firm will hire labor until it is no longer profitable to do so—that is, until the MPL falls to the point where the change in profit is zero. In the equation abov e, the firm hires labor until ΔP rofit = 0, which is when (P ? MPL) = W.This condition can be rewritten as:MPL = W/P.Therefore, a competitive profit-maximizing firm hires labor until the marginal product of labor equals the real wage. The same logicapplies to the firm’s decision regarding how much capital to hire:the firm will hire capital until the marginal product of capitalequals the real rental price.3. A production function has constant returns to scale if an equalpercentage increase in all factors of production causes an increase in output of the same percentage. For example, if a firm increases its use of capital and labor by 50 percent, and output increases by50 percent, then the production function has constant returns toscale.If the production function has constant returns to scale, then total income (or equivalently, total output) in an economy ofcompetitive profit-maximizing firms is divided between the return to labor, MPL ? L, and the return to capital, MPK ? K. That is, under constant returns to scale, economic profit is zero.4. A Cobb–Douglas production function has the form F(K,L) = AKαL1–α.The text showed that the parameter αgives capital’s share ofincome. So if capital earns one-fourth of total income, then ? = .Hence, F(K,L) = Consumption depends positively on disposable income—. the amount of income after all taxes have been paid. Higher disposable income means higher consumption.The quantity of investment goods demanded depends negatively on the real interest rate. For an investment to be profitable, itsreturn must be greater than its cost. Because the real interest rate measures the cost of funds, a higher real interest rate makes it more costly to invest, so the demand for investment goods falls.6. Government purchases are a measure of the value of goods and servicespurchased directly by the government. For example, the government buys missiles and tanks, builds roads, and provides services such as air traffic control. All of these activities are part of GDP.Transfer payments are government payments to individuals that are not in exchange for goods or services. They are the opposite of taxes: taxes reduce household disposable income, whereas transfer payments increase it. Examples of transfer payments include Social Security payments to the elderly, unemployment insurance, and veterans’benefits.7. Consumption, investment, and government purchases determine demandfor the economy’s output, whereas the factors of production and the production function determine the supply of output. The real interest rate adjusts to ensure that the deman d for the economy’s goodsequals the supply. At the equilibrium interest rate, the demand for goods and services equals the supply.8. When the government increases taxes, disposable income falls, andtherefore consumption falls as well. The decrease in consumptionequals the amount that taxes increase multiplied by the marginalpropensity to consume (MPC). The higher the MPC is, the greater is the negative effect of the tax increase on consumption. Becauseoutput is fixed by the factors of production and the productiontechnology, and government purchases have not changed, the decrease in consumption must be offset by an increase in investment. Forinvestment to rise, the real interest rate must fall. Therefore, a tax increase leads to a decrease in consumption, an increase ininvestment, and a fall in the real interest rate.Problems and Applications1. a. According to the neoclassical theory of distribution, the realwage equals the marginal product of labor. Because of diminishing returns to labor, an increase in the labor force causes themarginal product of labor to fall. Hence, the real wage falls.Given a Cobb–Douglas production function, the increase in the labor force will increase the marginal product of capital and will increase the real rental price of capital. With more workers, the capital will be used more intensively and will be more productive.b. The real rental price equals the marginal product of capital. Ifan earthquake destroys some of the capital stock (yet miraculously does not kill anyone and lower the labor force), the marginalproduct of capital rises and, hence, the real rental price rises.Given a Cobb–Douglas production function, the decrease in the capital stock will decrease the marginal product of labor and will decrease the real wage. With less capital, each worker becomesless productive.c. If a technological advance improves the production function, thisis likely to increase the marginal products of both capital andlabor. Hence, the real wage and the real rental price bothincrease.d. High inflation that doubles the nominal wage and the price levelwill have no impact on the real wage. Similarly, high inflationthat doubles the nominal rental price of capital and the pricelevel will have no impact on the real rental price of capital.2. a. To find the amount of output produced, substitute the given valuesfor labor and land into the production function:Y = = 100.b. According to the text, the formulas for the marginal product oflabor and the marginal product of capital (land) are:MPL = (1 –α)AKαL–α.MPK = αAKα–1L1–α.In this problem, α is and A is 1. Substitute in the given values for labor and land to find the marginal product of labor is andmarginal product of capital (land) is . We know that the real wage equals the marginal product of labor and the real rental price of land equals the marginal product of capital (land).c. Labor’s share of the output is given by the marginal product oflabor times the quantity of labor, or 50.d. The new level of output is .e. The new wage is . The new rental price of land is .f. Labor now receives .3. A production function has decreasing returns to scale if an equalpercentage increase in all factors of production leads to a smaller percentage increase in output. For example, if we double the amounts of capital and labor output increases by less than double, then the production function has decreasing returns to scale. This may happen if there is a fixed factor such as land in the production function, and this fixed factor becomes scarce as the economy grows larger.A production function has increasing returns to scale if an equalpercentage increase in all factors of production leads to a larger percentage increase in output. For example, if doubling the amount of capital and labor increases the output by more than double, then the production function has increasing returns to scale. This may happen if specialization of labor becomes greater as the population grows.For example, if only one worker builds a car, then it takes him a long time because he has to learn many different skills, and he must constantly change tasks and tools. But if many workers build a car, then each one can specialize in a particular task and become more productive.4. a. A Cobb–Douglas production function has the form Y = AKαL1–α. Thetext showed that the marginal products for the Cobb–Douglasproduction function are:MPL = (1 –α)Y/L.MPK = αY/K.Competitive profit-maximizing firms hire labor until its marginal product equals the real wage, and hire capital until its marginal product equals the real rental rate. Using these factsand the above marginal products for the Cobb–Douglas productionfunction, we find:W/P = MPL = (1 –α)Y/L.R/P = MPK = αY/K.Rewriting this:(W/P)L = MPL ? L = (1 –α)Y.(R/P)K = MPK ? K = αY.Note that the terms (W/P)L and (R/P)K are the wage bill and total return to capital, respectively. Given that the value of α = ,then the above formulas indicate that labor receives 70 percent of total output (or income) and capital receives 30 percent of total output (or income).b. To determine what happens to total output when the labor forceincreases by 10 percent, consider the formula for the Cobb–Douglas production function:Y = AKαL1–α.Let Y1 equal the initial value of output and Y2 equal final output.We know that α = . We also know that labor L increases by 10percent:Y 1 = Y 2 = .Note that we multiplied L by to reflect the 10-percent increase in the labor force.To calculate the percentage change in output, divide Y 2 by Y 1:Y 2Y 1=AK 0.31.1L ()0.7AK 0.3L 0.7=1.1()0.7=1.069.That is, output increases by percent. To determine how the increase in the labor force affects therental price of capital, consider the formula for the real rental price of capital R/P :R/P = MPK = αAK α–1L 1–α.We know that α = . We also know that labor (L ) increases by 10percent. Let (R/P )1 equal the initial value of the rental price ofcapital, and let (R/P )2 equal the final rental price of capitalafter the labor force increases by 10 percent. To find (R/P )2,multiply L by to reflect the 10-percent increase in the laborforce:(R/P )1 = – (R/P )2 = –.The rental price increases by the ratioR /P ()2R /P ()1=0.3AK -0.71.1L ()0.70.3AK -0.7L 0.7=1.1()0.7=1.069So the rental price increases by percent. To determine how the increase in the labor forceaffects the real wage, consider the formula for the real wage W/P :W/P = MPL = (1 – α)AK αL –α.We know that α = . We also know that labor (L ) increases by 10percent. Let (W/P )1 equal the initial value of the real wage, andlet (W/P )2 equal the final value of the real wage. To find (W/P )2, multiply L by to reflect the 10-percent increase in the laborforce:(W/P )1 = (1 – –. (W/P )2 = (1 – –.To calculate the percentage change in the real wage, divide (W/P )2 by (W/P )1:W /P ()2W /P ()1=1-0.3()AK 0.31.1L ()-0.31-0.3()AK 0.3L -0.3=1.1()-0.3=0.972That is, the real wage falls by percent.c. We can use the same logic as in part (b) to setY 1 = Y 2 = A Therefore, we have:Y 2Y 1=A 1.1K ()0.3L 0.7AK 0.3L 0.7=1.1()0.3=1.029This equation shows that output increases by about 3 percent. Notice that α < means that proportional increases to capital will increase output by less than the same proportional increase to labor.Again using the same logic as in part (b) for the change in the real rental price of capital:R /P ()2R /P ()1=0.3A 1.1K ()-0.7L 0.70.3AK -0.7L 0.7=1.1()-0.7=0.935The real rental price of capital falls by percent because there are diminishing returns to capital; that is, when capital increases, its marginal product falls.Finally, the change in the real wage is:W /P ()2W /P ()1=0.7A 1.1K ()0.3L -0.30.7AK 0.3L -0.3=1.1()0.3=1.029Hence, real wages increase by percent because the added capitalincreases the marginal productivity of the existing workers.(Notice that the wage and output have both increased by the same amount, leaving the labor share unchanged —a feature of Cobb –Douglas technologies.)d. Using the same formula, we find that the change in output is:Y 2Y 1= 1.1A ()K 0.3L 0.7AK 0.3L 0.7=1.1This equation shows that output increases by 10 percent. Similarly,the rental price of capital and the real wage also increase by 10 percent:R /P ()2R /P ()1=0.31.1A ()K -0.7L 0.70.3AK -0.7L 0.7=1.1W /P ()2W /P ()1=0.71.1A ()K 0.3L -0.30.7AK 0.3L -0.3=1.15. Labor income is defined asW P ´L =WL PLabor’s share of income is defined asWL P æèççöø÷÷/Y =WL PYFor example, if this ratio is about constant at a value of , then the value of W/P = *Y/L. This means that the real wage is roughlyproportional to labor productivity. Hence, any trend in laborproductivity must be matched by an equal trend in real wages.O therwise, labor’s share would deviate from . T hus, the first fact(a constant labor share) implies the second fact (the trend in realwages closely tracks the trend in labor productivity).6. a. Nominal wages are measured as dollars per hour worked. Prices aremeasured as dollars per unit produced (either a haircut or a unit of farm output). Marginal productivity is measured as units ofoutput produced per hour worked.b. According to the neoclassical theory, technical progress thatincreases the marginal product of farmers causes their real wageto rise. The real wage for farmers is measured as units of farmoutput per hour worked. The real wage is W/P F, and this is equalto ($/hour worked)/($/unit of farm output).c. If the marginal productivity of barbers is unchanged, then theirreal wage is unchanged. The real wage for barbers is measured ashaircuts per hour worked. The real wage is W/P B, and this is equal to ($/hour worked)/($/haircut).d.If workers can move freely between being farmers and being barbers,then they must be paid the same wage W in each sector.e. If the nominal wage W is the same in both sectors, but the realwage in terms of farm goods is greater than the real wage in terms of haircuts, then the price of haircuts must have risen relativeto the price of farm goods. We know that W/P = MPL so that W = P ?MPL. This means that PF MPLF= P H MPL B, given that the nominal wagesare the same. Since the marginal product of labor for barbers has not changed and the marginal product of labor for farmers hasrisen, the price of a haircut must have risen relative to theprice of the farm output. If we express this in growth rate terms, then the growth of the farm price + the growth of the marginalproduct of the farm labor = the growth of the haircut price.f. The farmers and the barbers are equally well off after the technological progress in farming, giventhe assumption that labor is freely mobile between the two sectorsand both types of people consume the same basket of goods. Given that the nominal wage ends up equal for each type of worker andthat they pay the same prices for final goods, they are equallywell off in terms of what they can buy with their nominal income.The real wage is a measure of how many units of output areproduced per worker. Technological progress in farming increased the units of farm output produced per hour worked. Movement oflabor between sectors then equalized the nominal wage.7. a. The marginal product of labor (MPL)is found by differentiatingthe production function with respect to labor:MPL=dY dL=13K1/3H1/3L-2/3An increase in human capital will increase the marginal product of labor because more human capital makes all the existing labor more productive.b. The marginal product of human capital (MPH)is found bydifferentiating the production function with respect to humancapital:MPH=dY dH=13K1/3L1/3H-2/3An increase in human capital will decrease the marginal product of human capital because there are diminishing returns.c. The labor share of output is the proportion of output that goes tolabor. The total amount of output that goes to labor is the real wage (which, under perfect competition, equals the marginalproduct of labor) times the quantity of labor. This quantity is divided by the total amount of output to compute the labor share:Labor Share=(13K1/3H1/3L-2/3)LK1/3H1/3L1/3=1 3We can use the same logic to find the human capital share:Human Capital Share=(13K1/3L1/3H-2/3)HK1/3H1/3L1/3=1 3so labor gets one-third of the output, and human capital gets one-third of the output. Since workers own their human capital (we hope!), it will appear that labor gets two-thirds of output.d. The ratio of the skilled wage to the unskilled wage is:Wskilled Wunskilled =MPL+MPHMPL=13K1/3L-2/3H1/3+13K1/3L1/3H-2/313K1/3L-2/3H1/3=1+LHNotice that the ratio is always greater than 1 because skilledworkers get paid more than unskilled workers. Also, when Hincreases this ratio falls because the diminishing returns tohuman capital lower its return, while at the same time increasing the marginal product of unskilled workers.e. If more colleges provide scholarships, it will increase H, and itdoes lead to a more egalitarian society. The policy lowers thereturns to education, decreasing the gap between the wages of more and less educated workers. More importantly, the policy evenraises the absolute wage of unskilled workers because theirmarginal product rises when the number of skilled workers rises.8. The effect of a government tax increase of $100 billion on (a) publicsaving, (b) private saving, and (c) national saving can be analyzed by using the following relationships:National Saving = [Private Saving] + [Public Saving]= [Y –T –C(Y –T)] + [T –G]= Y –C(Y –T) –G.a. Public Saving—The tax increase causes a 1-for-1 increase inpublic saving. T increases by $100 billion and, therefore, publicsaving increases by $100 billion.b.Private Saving—The increase in taxes decreases disposable income,Y –T, by $100 billion. Since the marginal propensity to consume (MPC) is , consumption falls by ? $100 billion, or $60 billion.Hence,ΔPrivate Saving = –$100b – (–$100b) = –$40b.Private saving falls $40 billion.c. National Saving—Because national saving is the sum of privateand public saving, we can conclude that the $100 billion taxincrease leads to a $60 billion increase in national saving.Another way to see this is by using the third equation for national saving expressed above, that national saving equals Y –C(Y –T) –G. The $100 billion tax increase reduces disposable income and causes consumption to fall by $60 billion. Sinceneither G nor Y changes, national saving thus rises by $60 billion.d. Investment—To determine the effect of the tax increase oninvestment, recall the national accounts identity:Y = C(Y –T) + I(r) + G.Rearranging, we findY –C(Y –T) –G = I(r).The left side of this equation is national saving, so the equation just says that national saving equals investment. Since national saving increases by $60 billion, investment must also increase by $60 billion.How does this increase in investment take place We know that investment depends on the real interest rate. For investment to rise, the real interest rate must fall. Figure 3-1 illustrates saving and investment as a function of the real interest rate.The tax increase causes national saving to rise, so the supply curve for loanable funds shifts to the right. The equilibrium real interest rate falls, and investment rises.9. If consumers increase the amount that they consume today, thenprivate saving and, therefore, national saving will fall. We know this from the definition of national saving:National Saving = [Private Saving] + [Public Saving]= [Y –T –C(Y –T)] + [T –G].An increase in consumption decreases private saving, so national saving falls.Figure 3-2 illustrates saving and investment as a function of the real interest rate. If national saving decreases, the supply curve for loanable funds shifts to the left, thereby raising the realinterest rate and reducing investment.10. a. Private saving is the amount of disposable income, Y – T,that is not consumed:S private= Y – T – C= 8,000 – 2,000 – [1,000 + (2/3)(8,000 –2,000)]= 1,000.Public saving is the amount of taxes the government has left over after it makes its purchases:S public= T – G= 2,000 – 2,500= –500.National saving is the sum of private saving and public saving:S national= S private+ S public= 1,000 + (500)= 500.b. The equilibrium interest rate is the value of r that clears themarket for loanable funds. We already know that national saving is 500, so we just need to set it equal to investment:S national= I500 = 1,200 – 100rSolving this equation for r, we find:r = or 7%.c. When the government increases its spending, private saving remainsthe same as before (notice that G does not appear in the S privateequation above) while government saving decreases. Putting the newG into the equations above:S private= 1,000S public= T – G= 2,000 – 2,000= 0.Thus,S national= S private+ S public= 1,000 + (0)= 1,000.d. Once again the equilibrium interest rate clears the market for loanable funds:S national= I1,000 = 1,200 – 100rSolving this equation for r, we find:r = or 2%.11. To determine the effect on investment of an equal increase in bothtaxes and government spending, consider the national income accounts identity for national saving:National Saving = [Private Saving] + [Public Saving]= [Y –T –C(Y –T)] + [T –G].We know that Y is fixed by the factors of production. We also know that the change in consumption equals the marginal propensity toconsume (MPC) times the change in disposable income. This tells us thatΔNational Saving = {–ΔT – [MPC ? (–ΔT)]} + [ΔT –ΔG]= [–ΔT + (MPC ? ΔT)] + 0= (MPC –1) ΔT.The above expression tells us that the impact on national saving of an equal increase in T and G depends on the size of the marginal propensity to consume. The closer the MPC is to 1, the smaller is the fall in saving. For example, if the MPC equals 1, then the fall in consumption equals the rise in government purchases, so nationalsaving [Y –C(Y –T) –G] is unchanged. The closer the MPC is to 0 (and therefore the larger is the amount saved rather than spent for a one-dollar change in disposable income), the greater is the impact on saving. Because we assume that the MPC is less than 1, we expect that national saving falls in response to an equal increase in taxes and government spending.The reduction in saving means that the supply of loanable funds curve will shift to the left in Figure 3-3. The real interest rate rises, and investment falls.12. a. The demand curve for business investment shifts out to theright because the subsidy increases the number of profitableinvestment opportunities for any given interest rate. The demandcurve for residential investment remains unchanged.b. The total demand curve for investment in the economy shifts out tothe right since it represents the sum of business investment,which shifts out to the right, and residential investment, whichis unchanged. As a result the real interest rate rises as inFigure 3-4.c. The total quantity of investment does not change because it isconstrained by the inelastic supply of savings. The investment tax credit leads to a rise in business investment, but an offsettingfall in residential investment. That is, the higher interest rate means that residential investment falls (a movement along thecurve), whereas the rightward shift of the business investmentcurve leads business investment to rise by an equal amount. Figure3-5 shows this change. Note thatI 1B +I 1R +I 2B +I 2R =S .13. In this chapter, we concluded that an increase in governmentexpenditures reduces national saving and raises the interest rate. The increase in government expenditure therefore crowds outinvestment by the full amount of the increase. Similarly, a tax cut increases disposable income and hence consumption. This increase in consumption translates into a fall in national saving, and theincrease in consumption crowds out investment by the full amount of the increase.If consumption depends on the interest rate, then saving will also depend on it. The higher the interest rate, the greater the return to saving. Hence, it seems reasonable to think that an increase in the interest rate might increase saving and reduce consumption. Figure 3-6 shows saving as an increasing function of the interest rate.Consider what happens when government purchases increase. At anygiven level of the interest rate, national saving falls by the change in government purchases, as shown in Figure 3-7. The figure shows that if the saving function slopes upward, investment falls by less than the amount that government purchases rises by. This happens because consumption falls and saving increases in response to the higher interest rate. Hence, the more responsive consumption is tothe interest rate, the less investment is crowded out by government purchases.14. a. Figure 3-8 shows the case where the demand for loanablefunds is stable but the supply of funds (the saving schedule)fluctuates perhaps reflecting temporary shocks to income, changes in government spending, or changes in consumer confidence. In this case, when interest rates fall, investment rises; when interestrates rise, investment falls. We would expect a negativecorrelation between investment and interest rates.b. Figure 3-9 shows the case where the supply of loanable funds(saving) is stable, whereas the demand for loanable fundsfluctuates, perhaps reflecting changes in firms’ expectationsabout the marginal product of capital. We would now find apositive correlation between investment and the interest rate—when demand for funds rises, it pushes up the interest rate, so we observe that investment and the real interest rate increase at the same time.c. If both curves shift, we might generate a scatter plot as inFigure 3-10, where the economy fluctuates among points A, B, C, and D. Depending on how often the economy is at each of thesepoints, we might find little clear relationship between investment and interest rates.d. Situation (c) seems fairly reasonable—as both the supply of anddemand for loanable funds fluctuate over time in response tochanges in the economy.。
曼昆经济学原理英文版文案加习题答案10章
曼昆经济学原理英文版文案加习题答案10章EXTERNALITIESWHAT’S NEW IN THE S EVENTH EDITION:There is a new In the News feature on ―What Should We Do about Climate Change.‖LEARNING OBJECTIVES:By the end of this chapter, students should understand:what an externality is.why externalities can make market outcomes inefficient.the various government policies aimed at solving the problem of externalities.how people can sometimes solve the problem of externalities on their own.why private solutions to externalities sometimes do not work.CONTEXT AND PURPOSE:Chapter 10 is the first chapter in the microeconomic section of the text. It is the first chapter in a three-chapter sequence on the economics of the public sector. Chapter 10 addresses externalities—the uncompensated impact of one person’s actions on the well-being of a bystander. Chapter 11 will address public goods and common resources (goods that will be defined in Chapter 11) and Chapter 12 will address the tax system.In Chapter 10, different sources of externalities and a varietyof potential cures for externalities are addressed. Markets maximize total surplus to buyers and sellers in a market. However, if a market generates an externality (a cost or benefit to someone external to the market) the market equilibrium may not maximize the total benefit to society. Thus, in Chapter 10 we will see that while markets are usually a good way to organize economic activity, governments can sometimes improve market outcomes.182Chapter 10/Externalities ? 183KEY POINTS:When a transaction between a buyer and seller directly affects a third party, the effect is called an externality. If an activity yields negative externalities, such as pollution, the socially optimal quantity in a market is less than the equilibrium quantity. If an activity yields positive externalities, such as technology spillovers, the socially optimal quantity is greater than the equilibrium quantity.Governments pursue various policies to remedy the inefficiencies caused by externalities. Sometimes the government prevents socially inefficient activity by regulating behavior. Other times it internalizes an externality using corrective taxes. Another public policy is to issue permits. For example, the government could protect the environment by issuing a limited number of pollution permits. The result of this policy is largely the same as imposing corrective taxes on polluters.Those affected by externalities can sometimes solve the problem privately. For instance, when one business imposes anexternality on another business, the two businesses can internalize theexternality by merging. Alternatively, the interested parties can solve the problem by negotiating a contract. According to the Coase theorem, if people can bargain without cost, then they can always reach an agreement in which resources are allocated efficiently. In many cases, however, reaching a bargain among the many interested parties is difficult, so the Coase theorem does not apply.CHAPTER OUTLINE:I. Definition of externality : the uncompensated impact of one person’s actions on the well -being of a bystander.A. If the impact on the bystander is adverse, we say that there is a negative externality.B. If the impact on the bystander is beneficial, we say that there is a positive externality.C. In either situation, decisionmakers fail to take account of the external effects of their behavior.II. Externalities and Market InefficiencyA. Welfare Economics: A Recap1. The demand curve for a good reflects the value of that good to consumers, measured by theprice that the marginal buyer is willing to pay.2. The supply curve for a good reflects the cost of producing that good.3. In a free market, the price of a good brings supply and demand into balance in a way thatmaximizes total surplus (the difference between theconsumers’ valuation of the good and the sellers’ cost of producing it).184 ? Chapter 10/ExternalitiesB. Negative Externalities1. Example: An aluminum firm emits pollution during production.2. Social cost is equal to the private cost to the firm of producing the aluminum plus theexternal costs to those bystanders affected by the pollution. Thus, social cost exceeds the private cost paid by producers.3. The optimal amount of aluminum in the market will occur where total surplus is maximized.a. Total surplus is equal to the value of aluminum to consumers minus the cost (social cost)of producing it.b. This will occur where the social-cost curve intersects with demand curve. At this point,producing one more unit would lower total surplus because the value to consumers is less than the cost to produce it.4. Because the supply curve does not reflect the true cost of producing aluminum, the marketwill produce more aluminum than is optimal. 5. This negative externality could be internalized by a tax on producers for each unit ofaluminum sold.ALTERNATIVE CLASSROOM EXAMPLE:A coal-fired power plant emits pollution during production.Chapter 10/Externalities ? 1856. Definition of internalizing an externality: altering incentives so that people takeaccount of the external effects of their actions.7. In the News: The Externalities of Country Livinga. In The Lorax by Dr. Seuss, urbanization is criticized while country living is consideredmore environmentally friendly.b. This article from The New York Times describes research that suggests that city livingmay in fact be ―green er‖ because of the use of public transportation.C. Positive Externalities1. Example: education.2. Education yields positive externalities because better-educated voters lead to a bettergovernment. Crime rates also drop as the education level of the population rises.3. In this case, the demand curve does not reflect the social value of a good.4. If there is a positive externality, the social value of the good is greater than the private value,and the optimum quantity will be greater than the quantity produced in the market.5. To internalize a positive externality, the government could use a subsidy.Figure 3ALTERNATIVE CLASSROOM EXAMPLE:The purchase of a fire extinguisher when an individual lives in an apartment complex This is a good time to discuss why the government taxes goods like alcohol, tobacco, and gasoline. You will find that students have heard the phrase ―sin tax,‖ but they often do not understand why economists might support such taxes (given thedeadweight loss from taxes discussed in Chapter 8).186 ?Chapter 10/Externalities6. Case Study: Technology Spillovers, Industrial Policy, and Patent Protectiona. A technology spillover occurs when one firm’s research and production efforts impactanother firm’s access to technological advance.b. It is difficult to measure the amounts of technology spillover that occur and this leads toa debate over whether or not the government should pursue policies to encourage theproduction of technology.c. Patent protection is a type of technology policy of the government because it protectsthe rights of inventors who create new technologies. Without patents, there would beless incentive to develop new ideas and technologies.III. Public Policies toward ExternalitiesA. When an externality causes a market to reach an inefficient allocation of resources, thegovernment can respond in two ways.1. Command-and-control policies regulate behavior directly.2. Market-based policies provide incentives so that private decisionmakers will choose to solvethe problem on their own.B. Command-and-Control Policies: Regulation1. Externalities can be corrected by requiring or forbidding certain behaviors.2. In the United States, the Environmental Protection Agency (EPA) develops and enforcesregulations aimed at protecting the environment.3. EPA regulations include maximum levels of pollution allowed or required adoption of aparticular technology to reduce emissions.C. Market-Based Policy 1: Corrective Taxes and Subsidies1. Externalities can be internalized through the use of taxes and subsidies.2. Definition of corrective tax: a tax designed to induce private decisionmakers to takeaccount of the social costs that arise from a negative externality.a. These taxes are preferred by economists over regulation, because firms that can reducepollution with the least cost are likely to do so (to avoid the tax) while firms thatencounter high costs when reducing pollution will simply pay the tax.b. Thus, this tax allows firms that face the highest cost of reducing pollution to continue topollute while encouraging less pollution over all.Chapter 10/Externalities ?187c. Unlike other taxes, corrective taxes do not cause a reduction in total surplus. In fact,they increase economic well-being by forcing decisionmakers to take into account thecost of all of the resources being used when making decisions.3. Case Study: Why Is Gasoline Taxed So Heavily?a. In the United States, almost half of what drivers pay for gasoline goes to gas taxes.b. This is to correct for three negative externalities associated with driving: congestion,accidents, and pollution.D. Market-Based Policy 2: Tradable Pollution Permits1. Example: EPA regulations restrict the amount of pollution that two firms can emit at 300 tonsof glop per year. Firm A wants to increase its amount of pollution. Firm B agrees to decrease its pollution by the same amount if Firm A pays it $5 million.2. Social welfare is increased if the EPA allows this situation. Total pollution remains the sameso there are no external effects. If both firms are doing this willingly, it must make thembetter off.3. If the EPA issued permits to pollute and then allowed firms to sell them, this would alsoincrease social welfare. Firms that could control pollution most inexpensively would do so and sell their permits, while those who encounter high costs when reducing pollution would buyadditional permits.4. Tradable pollution permits and corrective taxes are similar in effect. In both cases, firms mustpay for the right to pollute.a. In the case of the tax, the government basically sets the price of pollution and firms thenchoose the level of pollution (given the tax) that maximizes their profit.b. If tradable pollution permits are used, the government chooses the level of pollution (intotal, for all firms) and firms then decide what they are willing to pay for these permits.188 ?Chapter 10/ExternalitiesE. Objections to the Economic Analysis of Pollution1. Some individuals dislike the idea of allowing companies to purchase the right to pollute.2. Economists point out that ―people face trade-offs‖ (Principle #1) and we must decide howmuch we would be willing to give up in exchange for no pollution. It would likely not beenough.3. A clean environment can be viewed as any other good that obeys the law of demand. Thelower the price of environmental protection, the more the public will want.F. In the News: What Should We Do about Climate Change?1. Many policy analysts believe that taxing carbon is the best approach to dealing with globalclimate change..2. This article from The New York Times explains how the revenue-neutral carbon tax works inBritish Columbia and argues for its implementation in the United States..IV. Private Solutions to ExternalitiesA. We do not necessarily need government involvement to correct externalities.B. The Types of Private Solutions1. Problems of externalities can sometimes be solved by moral codes and social sanctions.a. Do not litter.b. The Golden Rule2. Many charities have been established that deal with externalities. The governmentencourages this private solution by allowing a deduction for charitable contributions in thedetermination of taxable income.a. Sierra Club (environment)b. University Alumni Association (scholarships)3. The parties involved in this externality (either the seller and the bystander or the consumerand the bystander) can possibly enter into an agreement to correct the externality.C. The Coase Theorem1. Definition of Coase theorem: the proposition that if private parties can bargainwithout cost over the allocation of resources, they can solve the problem ofexternalities on their own.Chapter 10/Externalities ?1892. Example: Dick owns a dog Spot who disturbs a neighbor (Jane) with its barking.a. One possible solution to this problem would be for Jane to pay Dick to get rid of the dog.The amount that she would be willing to pay would be equal to her valuation of the costsof the barking. Dick would only agree to this if Jane paid him an amount greater than thevalue he places on owning Spot.b. Even if Jane could legally force Dick to get rid of Spot, another solution could occur. Dickcould pay Jane to let him keep the dog.3. Whatever the initial distribution of rights, the parties involved in an externality can potentiallysolve the problem themselves and reach an efficient outcome where both parties are betteroff.D. Why Private Solutions Do Not Always Work1. Definition of transaction costs: the costs that parties incur in the process ofagreeing and following through on a bargain.2. Coordination of all of the interested parties may be difficult so that bargaining breaks down.This is especially true when the number of interested parties is large. SOLUTIONS TO TEXT PROBLEMS:Quick Quizzes1. Examples of negative externalities include pollution, barking dogs, and consumption ofalcoholic beverages. Examples of positive externalitiesinclude the restoration of historicbuildings, research into new technologies, and education. (Many other examples of negativeand positive externalities are possible.) Market outcomes are inefficient in the presence ofexternalities because markets produce a larger quantity than is socially desirable when thereis a negative externality and a smaller quantity than is socially desirable when there is apositive externality. The market outcomes do not account for all of the costs (negativeexternalities) or benefits (positive externalities) to society.2. The town government might respond to the externality from the smoke in three ways: (1)regulation; (2) corrective taxes; or (3) tradable pollution permits.Regulation prohibiting pollution beyond some level is good because it is often effective atreducing pollution. But doing so successfully requires the government to have a lot ofinformation about the industries and the alternative technologies that those industries couldadopt.Corrective taxes are a useful way to reduce pollution because the tax can be increased to getpollution to a lower level and because the taxes raise revenue for the government. The tax ismore efficient than regulation because it gives factories economic incentives to reducepollution and to adopt new technologies that pollute less.The disadvantage of correctivetaxes is that the government needs to know a lot of information to pick the right tax rate.Tradable pollution permits are similar to corrective taxes but allow the firms to trade the rightto pollute with each other. As a result, the government does not need as much informationabout the firms’ technologies. The government c an simply set a limit on the total amo unt of190 ?Chapter 10/Externalitiespollution, issue permits for that amount, and allow the firms to trade the permits. Thisreduces pollution while allowing economic efficiency.3. Examples of private solutions to externalities include moral codes and social sanctions,charities, and relying on the interested parties entering into contracts with one other.The Coase theorem is the proposition that if private parties can bargain without cost over theallocation of resources, they can solve the problem of externalities on their own.Private economic participants are sometimes unable to solve the problems caused by anexternality because of transaction costs or because bargaining breaks down. This is mostlikely when the number of interested parties is large.Questions for Review1. Examples of negative externalities include pollution, barking dogs, and consumption ofalcoholic beverages. Examples of positive externalitiesinclude the restoration of historicbuildings, research into new technologies, and education. (Many other examples of negativeand positive externalities are possible.)2. Figure 1 illustrates the effect of a negative externality. The equilibrium quantity provided bythe market is Q market. Because of the externality, the social cost of production is greater thanthe private cost of production, so the social-cost curve is above the supply curve. The optimalquantity for society is Q optimum. The private market produces too much of the good becauseQ market is greater than Q optimum.Figure 13. The patent system helps society solve the externality problem from technology spillovers. Bygiving inventors exclusive use of their inventions for a certain period, the inventor cancapture much of the economic benefit of the invention. In doing so, the patent systemencourages research and technological advance, which benefits society through spillovereffects.Chapter 10/Externalities ?1914. Corrective taxes are taxes enacted to correct the effects ofa negative externality. Economistsprefer corrective taxes over regulations as a way to protect the environment from pollutionbecause they can reduce pollution at a lower cost to society.A tax can be set to reducepollution to the same level as a regulation. The tax has the advantage of letting the marketdetermine the least expensive way to reduce pollution. The tax gives firms incentives todevelop cleaner technologies to reduce the taxes they have to pay.5. Externalities can be solved without government intervention through moral codes and socialsanctions, charities, merging firms whose externalities affect each other, or by contract.6. According to the Coase theorem, you and your roommate will bargain over whether yourroommate will smoke in the room. If you value clean air morethan your roommate valuessmoking, the bargaining process will lead to your roommate not smoking. But if yourroommate values smoking more than you value clean air, the bargaining process will lead toyour roommate smoking. The outcome is efficient as long as transaction costs do not preventan agreement from taking place. The solution may be reached by one of you paying off theother either not to smoke or for the right to smoke.Quick Check Multiple Choice1. c2. b3. a4. c5. b6. cProblems and Applications1. The Club conveys a negative externality on other car owners because car thieves will notattempt to steal a car with The Club visibly in place. This means that they will move on toanother car. The Lojack system conveys a positive externality because thieves do not knowwhich cars have this technology. Therefore, they are less likely to steal any car. Policyimplications include a subsidy for car owners that use the Lojack technology or a tax onthose who use The Club.2. a. Fire extinguishers exhibit positive externalities becauseeven though people buy them fortheir own use, they may prevent fire from damaging the property of others.192 ? Chapter 10/ExternalitiesFigure 2b. Figure 2 illustrates the positive externality from fire extinguishers. Notice that the social-value curve is above the demand curve and the social-cost curve is the same as the supply curve.c. The market equilibrium level of output is denoted Q market and the efficient level of outputis denoted Q optimum . The quantities differ because in deciding to buy fire extinguishers, people don't account for the benefits they provide to others.d. A government policy that would result in the efficient outcome would be to subsidizepeople $10 for every fire extinguisher they buy. This would shift the demand curve up to the social-value curve, and the market quantity would increase to the optimum quantity. 3. a. The extra traffic is a negative externality because the social cost is greater than theprivate cost..b. Figure 3 shows the market for theater tickets. Because there is no external benefit, thesocial-value curve is the same as the demand curve in this case. However, the social-cost curve lies $5 above the supply curve at each quantity. The efficient level of output occurs where the social-value curve (which is demand in this case) and the social-cost curve intersect..Figure 3optimum market Price of TicketsChapter 10/Externalities ?193c. This is a positive externality because the social value of theater tickets is greater than theprivate value in this case.d. Figure 4 shows both the positive and the negative externalities.Figure 4e. A tax of $3 per ticket will lead to the efficient outcome. The market equilibrium quantitywill be equal to the social optimum.4. a. The market for alcohol is shown in Figure5. The social-value curve is the same as thedemand curve in this case. The social-cost curve is above the supply curve because ofthe negative externality from increased motor vehicle accidents caused by those whodrink and drive. The market equilibrium level of output is Q market and the efficient level of output is Q optimum.b. The triangular area between points A, B, and C represents the deadweight loss of themarket equilibrium. This area shows the amount by which social costs exceed socialvalue for the quantity of alcohol consumption beyond the efficient level.Figure 5194 ?Chapter 10/Externalities5. a. It is efficient to have different amounts of pollution reduction at different firms becausethe costs of reducing pollution differ across firms. If all firms were made to reducepollution by the same amount, the costs would be low at some firms and prohibitivelyhigh at others, imposing a greater burden overall.b. Command-and-control approaches that rely on uniformpollution reduction among firmsgive the firms no incentive to reduce pollution beyond the mandated amount. Instead,every firm will reduce pollution by just the amount required and no more.c. Corrective taxes or tradable pollution rights give firms greater incentives to reducepollution. Firms are rewarded by paying lower taxes or spending less on permits if theyfind methods to reduce pollution, so they have the incentive to engage in research onpollution control. The government does not have to figure out which firms can reducepollution the most?it lets the market give firms the incentive to reduce pollution on theirown.6. a. A t a price of $1.50, each Whovillian will consume 4 bottles of Zlurp. Eac h consumer’stotal willingness to pay is $14 (= $5 + $4 + $3 + $2). The total spent by each Whovillianon Zlurp is $6 (= $1.50 ? 4). Therefore, each consumer receives $8 in consumer surplus(=$14 ? $6).b. Total surplus would fall by $4 to $4.c. If Cindy Lou only consumes 3 bottles of Zlurp, her consumer surplus is $4.50. Herwillingness to pay for 3 bottles is $5 + $4 + $3 = $12. She pays $1.50 x 3 = $4.50 andthe externality is $1 x 3 = $3. Thus, Cindy Lou's consumer surplus is $12 - $4.50 - $3.00= $4.50. Cindy’s decision increases consumer surplus in Whoville by $0.50 ($4.50-$4.00).d. The $1 tax raises the price of a bottle of Zlurp to $2.50. (The entire tax will be borne byconsumers because supply is perfectly elastic.) Each resident will purchase only 3 bottlesat the higher price and each consumer’s total willingness to pay is now $12 (= $5 + $4 +$3). Each resident pays $7.50 (= $2.50 ? 3). Therefore, each resident receives $4.50($12-$7.50) in consumer surplus.Because each bottle has an external cost of $1, the per-resident external cost is $3 ($1per bottle x 3 bottles). The government collects $3 per resident in revenue. Total surpluswith the tax is equal to $4.50 - $3.00 + $3.00 = $4.50.e. Yes, because total surplus is now higher than before the tax.7. a. The externality is noise pollution. Ringo’s consumption of rock and roll music affectsLuciano, but Ringo does not consider that in deciding how loudly he plays his music.b. The landlord could impose a rule that music could not be played above a certain decibellevel. This could be inefficient because there would be no harm done by Ringo playinghis music loud if Luciano is not home.c. Ringo and Luciano could negotiate an agreement that might, for example, allow Ringo toplay his music loudly at certain times of the day. They mightnot be able to reach anagreement if the transaction costs are high or if bargaining fails because each holds outfor a better deal.Chapter 10/Externalities ?195 8. a. An improvement in the technology for controlling pollution would reduce the demand forpollution rights, shifting the demand curve to the left. Figure 6 illustrates what wouldhappen if there were a corrective tax, while Figure 7 shows the impact if there were afixed supply of pollution permits. In both figures, the curve labeled D1 is the originaldemand for pollution rights and the curve labeled D2 is the new demand for pollutionrights after the improvement in technology.Figure 6b. With a corrective tax, the price of pollution remains unchanged and the quantity ofpollution declines, as Figure 6 shows. With pollution permits, the price of pollutiondeclines and the quantity of pollution is unchanged, as Figure 7 illustrates.Figure 79. a. In terms of economic efficiency in the market for pollution, it does not matter if thegovernment distributes the permits or auctions them off, as long as firms can sell thepermits to each other. The only difference would be that the government could makemoney if it auctioned the permits off, thus allowing it to reduce taxes, which would help196 ?Chapter 10/Externalitiesreduce the deadweight loss from taxation. There could also be some deadweight lossoccurring if firms use resources to lobby for additional permits.b. If the government allocated the permits to firms who did not value them as highly asother firms, the firms could sell the permits to each other so they would end up in thehands of the firms who value them most highly. Thus, the allocation of permits amongfirms would not matter for efficiency. But it would affect the distribution of wealth,because those who got the permits and sold them would be better off.10. a. The firms with the highest cost of reducing pollution will buy permits rather than reducetheir pollution. Firms that can sell their permits for more than it costs them to reducetheir pollution will sell.Because firm B faces the highest costs of reducing pollution, $25 per unit, it will keep itsown 40 permits and buy 40 permits from the other firms, so that it can still pollute 80units. Thus, firm B does not reduce its pollution at all.Of the two remaining firms, firm A has the higher cost of reducing pollution so it willkeep its own 40 permits and reduce its pollution by 30 units at a cost of $20 x 30 units =$600.Firm C sells all 40 of its permits to firm B and reduces its pollution by 50 units at a cost of$10 × 50 = $500. The total cost of pollution reduction is。
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Lecture1:(Chapter2:2,4,6,7)
2.value added: The value added by farmer is 1-0=0; The value added by the miller is 3-1=2; The value added by the baker is 6-3=
3. The total value added is 1-0+3-1+6-3=6
GDP: 1+3-1+6-3=6
ernment purchase
B.investment
export
D.consumption
E.investment
6.a. Nominal GDP:Y ear2000: 100×50000+500000×10=10000000 Y ear2010:120×60000+400000×20=15200000
Real GDP: Y ear2010 is the base year,so its nominal GDP and real GDP are same:10000000; Y ear 2010:120 *50000+400000 *10=10000000
Implicit price deflator for GDP: nominal GDP/ real GDP= 15200000/10000000=1.52
CPI:Y ear 2010: 60000*100+20*500000=16000000 Y ear2010:10000000, so the CPI2010 is 16000000/10000000=1.6
B. The change in the price deflator is (1.52-1)/1=0.52 between 2000 and 2010, the change in the fixed weight price index is (1.6-1)/1=0.6.
c. I will consider the two factors, because the both factors has its weakness. CPI ....
7.a. CPI=(2*10+1*0)/(10*1+2*0)=2, prices have doubled.
b. Y ear 1=1*10+0*2+10
Y ear2=1*10+0*2=10.nominal spending is constant.
c. Y ear2 real spending =10*2+1*0=20, Y ear1 real spending=10.so her spending is from 10 to
20.
d. The implicit price deflator=nominal spending divided by real spending=10/20=0.5,this means the prices have fallen by half.
e. If she is equally happy eating red or green apples, her true cost of living is fixed.It costs her 10dollars to buy apples each year. According to CPI,prices have doubled, because CPI only take the increase in red apples, which ignores the decrease in green apples., in contract, according to the implicit price deflator ,the prices have fallen by half, it underestimates the price level.
IET 2011050042董玉莹。