6. Cost minimization for a given level of production is equivalent or identical to the concept of product maximization for a given cost level. True of False. Explain. Please offer examples and the use of graphs where necessary to discuss your answers.
11. Question 1
The expenditure approach (the sum of all spendings) to measuring the value of the nation's output (GDP) is equivalent to the income approach (the sum of all payments to factors). Discuss and illustrate with examples(s) where necessary.
Real GDP is the same as nominal GDP? If yes, why? If no, why? Discuss
Does GDP provide an accurate measure of the well-being of the population in a country? Yes or No. Discuss and offer examples where necessary.
9.a) What is a monopolist? Is the product unique or there are no close substittues. Discuss
b) What type(s) of decision does the monoplist make about pricing and the quantity of output to offer in the market? Can the monopolist determine the level of output and the price to charge independently of each other ? Discuss.
c) Once output is determined via MR = MC, explain how the price is determined?
8. 1. If an industry is perfectly competitive, then a single producer is a price taker? Why? Explain with examples.
2. What is the supply curve of a perfectly competitive firm? Is it different from that of the market supply curve? Explain.
3. If a firm makes a loss in the short run, then it would shut down? If no, discuss. If yes, discuss. Offer examples.
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The expenditure approach measures the total amount that has been spent on goods produced in a country in a year. GDP = C + I + G +NX. While the income approach measures the total incomes that have been earned by households in a country, in a year. GDP represents how “healthy” a country’s economy is. Both of these methods should end with the same result, even though they measure different factors. This happens due to the fact that economy of a nation is a circular flow, meaning that every dollar that was earned in a household will be spent in the product market, spent on taxes and saving, in imports or injections from government spending, investment and export sales...
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