Exam 4: Sellers and Incentives,aggregate Incomes

In The Wealth of Nations, Adam Smith argued that "the division of labor [specialization] was limited by the extent of the market."(Bracketed remark added.) Which of the following best explains Smith's argument?

Define producer surplus. Calculate the producer surplus from the following figure.

The figure below shows the marginal cost (circles) and the average variable cost (crosses) of a firm in a competitive market. The firm always makes the choice to maximize its profit. -Refer to the figure above. If the market price of the product is $5,000, what is the firm's producer surplus?

Berylia?s aggregate production function is Y = A K^1/3 H^2/3. What is the contribution of technology to Berylia?s GDP if its GDP is $2,000,000, the physical capital stock is 125,000 units, and the total efficiency units of labor is 1,000,000?

If the aggregate income of an island country is $8 million and income per capita is $5,000, the total population of the island is ________.

The following table shows economic data for two countries. -Refer to the table above. Income per worker in Country B is equal to ________.

If the income per capita in United Kingdom is £23,800 and the dollar per pound exchange rate is 1.68 in 2014, then income per capita in the United Kingdom in U.S. dollars in the same year is ________.

Suppose the market for AR-15 style rifles in the United States was in an initial long-run equilibrium. In the fall of 2012, the demand for these rifles increased substantially due to concerns that President Obama would either ban or restrict the sale of these semi-automatic rifles. As a result, the market price of these rifles increased, and gun manufacturers earned positive economic profits (shown in the figure below). The presence of economic profits in the short-run will lead to the ________.

The following figure shows the cost curves on a firm that operates in a competitive market. Assume that all the firms in this market have identical cost structure. -Refer to the graph above. Which of the following graphs, correctly represents this competitive marke's demand and supply in the long run?

Two countries, Baltonia and Polonia, have aggregate production functions in the form Y = A × K^1/3 × H^2/3, where Y denotes total output, A denotes the level of technology, K denotes the physical capital stock, and H denotes the number of efficiency units of production. Both countries have the same number of efficiency units of labor and use the same technology. However, Baltonia has a smaller physical capital stock than Polonia does. Which of the following is likely to be true in this case?

The income per capita in a country with a population of 50,000 is $4,500. Its GDP is ________.

Two economies, A and B, have identical aggregate production functions with diminishing returns. In both economies, capital and labor are equally important for production. Economy A has twice as many efficiency units of labor as economy B. Economy B has twice as much physical capital stock as economy A. -Refer to the scenario above. If you were to draw the aggregate production functions for economies A and B, holding physical capital stock constant at each county's given level, you would draw ________.

A car repair shop hires workers and pays them the federal minimum wage of $7.25. The following table shows the marginal returns to each worker in terms of number of cars repaired. -Refer to the scenario above. In addition, suppose the fixed cost of operating this shop is $1,000 per day. If 3 workers are hired at the federal minimum wage of $7.25, what is the total cost of this shop?

The price of a standard basket of goods in Country A is 10 pesos. The price of the same basket of goods in country B is 25 francs and $5 in the United States. Country A has an income per capita of 60,000 pesos, and country B has an income per capita of 100,000 francs. Assume full employment in both countries. -Refer to the scenario above. The difference between the GDP per capita in Country A and country B is________.

Country X has 1,000 workers. The countryʹs aggregate production function is Y_X = 1.5 K_X^2/3 H_X^1/3, where K_X = 1,000,000 and H_X = 2,500,000. -Refer to the scenario above. What was the country's GDP per capita?

The figure below shows the cost curves of a firm in a competitive market. The firm always makes the choice to maximize its profit. -Refer to the figure above. If the market price of the product is $3.25, the firm's profit maximizing output is ________ and the firm's maximum profit is ________.

The following figure shows the cost curves on a firm that operates in a competitive market. Assume that all the firms in this market have identical cost structure. -Refer to the graph above. Which of the following graphs correctly represents this competitive market's demand and supply in the short run?

The figure below shows the marginal cost (circles) and the average variable cost (crosses) of a firm in a competitive market. The firm always makes the choice to maximize its profit. -Refer to the figure above. If the market price of the product fell from $5,000 to $3,400, what is the loss of the firm's producer surplus?

In Lutheria, there are 10,000 people in the age group of 0-14 years, 30,000 people are employed, and 2,000 people are unemployed. Lutheria?s GDP, measured in luthers, is 1 billion. Income per worker in Lutheria is ________ luthers.

What is Moore?s Law?