Use the following data to answer questions 1-3 (be sure to provide all calculations).
Year CD's Tennis Racquets CD's Tennis Racquets
2005 90 180 $18 $100
2006 100 190 $20 $110
Calculate the value of the price index for GDP for 2006 using 2005 as the base year. By what percent did prices increase?
Now calculate real GDP for 2005 and 2006 using 2006 prices. By what percent did real GDP grow?
Review the GDP information for the past few years from the Bureau of Economic Analysis's Website. Provide a brief summary of the GDP trends over that timeframe and discuss two or three events which may have caused these trends.
Be sure to show your work for each calculation.
Economics,Principles,Application and tools/ fifth Edition O'sullivan/sheffrin/Perez chapters 5-8© BrainMass Inc. brainmass.com October 25, 2018, 12:35 am ad1c9bdddf
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GDP Trends in US
Gross Domestic Product (GDP)
Gross Domestic Product is used to measure the values of the economic activities of a country or an economy. It generally describes the change in the economy over a period of time. It also helps to identify the trends and growth in the production of goods and services in an economy by studying the past trends. The GDP includes the measurement of the value of all goods and ...
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Economics in a Global Environment
Details: You've been hired by an unprofitable firm to determine whether it should shut down its unprofitable operation.
The firm currently uses 70,000 workers to produce 300,000 units of output per day. The daily wage (per worker) is $100, and the price of the firm's output is $30. The cost of other variable inputs is $500,000 per day. Although you don't know the firm's fixed cost, you know that it is high enough that the firm's total costs exceed its total revenue.
Provide a 1-2 page report to management of the firm as to whether or not it should continue to operate at a loss? Be sure to show your work to support the decision you outlined in your report.
IP: choose Q = 300,000 and continue operations or choose Q =0, where Q=0 means "shut down". This decision for this IP is considered a short run decision. This IP does not consider the option of closing and dissolving the business permanently, but rather which output to choose: Q =300,000 or Q =0.(Note that shut down is not bankruptcy; this IP does not concern bankruptcy.) Explain and support your answer. Note that this IP does NOT ask you to "determine how to make this business more profitable or how to lower the costs or how to earn more revenue." You must select Q =0 or Q= 300,000, and provide the reason.View Full Posting Details