MACROECONOMICS
14th Edition
ISBN: 9781337794985
Author: Baumol
Publisher: CENGAGE L
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Chapter 9, Problem 2DQ
To determine
To describe: The economical mechanism involved in finding the reasons for some level of real
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Students have asked these similar questions
My friend Marie decides to set aside $200 from her paycheck every month. How will this affect her demand curve? (You don't have to use specific numbers, just explain)
When Marie sets aside money from her paycheck, this is the same thing as a decrease in her income. Remember that when income increases, the demand curve shifts outwards to reflect the increase in spending. In this case, Marie's demand curve will shift inwards as she tries to economize more than usual. She will buy fewer goods, even if the prices don't change. Illustrate in graph
Suppose that when the price of a good rises by 8%, the quantity demanded that good falls by 13%. What is the approximate change in total expenditure (or total revenue)? Express your answer as a percentage.
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A short article in the January 10, 2011 edition of The New York Times discussed the amount spent on DVDs over the past six years: (In 2004) consumers spent about $21.8billion to rent and and buy DVDs, Blu-ray discs, digital downloads and other forms of home entertainment...The number has fallen every year since, for a total drop of about 13.8 percent, to $18.8 billion in 2010.
The reporter noted that the actual drop was about double what it seemed to be when the figures were adjusted for inflation: $21.8 billion figure from 2004 would amount to $25.3billion in current dollars.
The article also noted that box office revenues rose from $9.3billion in 2004 to $10.6 billion in 2010. Calculate the percentage increase in box office revenues, then re-calculate the percentage increase using inflation-adjusted dollars. Have box office revenues increased or decreased over this six-year time period?
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