曼昆宏观经济经济学第九版英文原版答案3.docx
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曼昆宏观经济经济学第九版英文原版答案3
曼昆-宏观经济经济学第九版-英文原版答案3
AnswerstoTextbookQuestionsandProblems
CHAPTER3 NationalIncome:
WhereItComesFromandWhereItGoes
QuestionsforReview
1.Thefactorsofproductionandtheproductiontechnologydeterminetheamountofoutputaneconomycanproduce.Thefactorsofproductionaretheinputsusedtoproducegoodsandservices:
themostimportantfactorsarecapitalandlabor.Theproductiontechnologydetermineshowmuchoutputcanbeproducedfromanygivenamountsoftheseinputs.Anincreaseinoneofthefactorsofproductionoranimprovementintechnologyleadstoanincreaseintheeconomy’soutput.
2.Whenafirmdecideshowmuchofafactorofproductiontohireordemand,itconsidershowthisdecisionaffectsprofits.Forexample,hiringanextraunitoflaborincreasesoutputandthereforeincreasesrevenue;thefirmcomparesthisadditionalrevenuetotheadditionalcostfromthehigherwagebill.Theadditionalrevenuethefirmreceivesdependsonthemarginalproductoflabor(MPL)andthepriceofthegoodproduced(P).AnadditionalunitoflaborproducesMPLunitsofadditionaloutput,whichsellsforPdollarsperunit.Therefore,theadditionalrevenuetothefirmisP⨯MPL.ThecostofhiringtheadditionalunitoflaboristhewageW.Thus,thishiringdecisionhasthefollowingeffectonprofits:
ΔProfit=ΔRevenue–ΔCost
=(P⨯MPL)–W.
Iftheadditionalrevenue,P⨯MPL,exceedsthecost(W)ofhiringtheadditionalunitoflabor,thenprofitincreases.Thefirmwillhirelaboruntilitisnolongerprofitabletodoso—thatis,untiltheMPLfallstothepointwherethechangeinprofitiszero.Intheequationabove,thefirmhireslaboruntilΔProfit=0,whichiswhen(P⨯MPL)=W.
Thisconditioncanberewrittenas:
MPL=W/P.
Therefore,acompetitiveprofit-maximizingfirmhireslaboruntilthemarginalproductoflaborequalstherealwage.Thesamelogicappliestothefirm’sdecisionregardinghowmuchcapitaltohire:
thefirmwillhirecapitaluntilthemarginalproductofcapitalequalstherealrentalprice.
3.Aproductionfunctionhasconstantreturnstoscaleifanequalpercentageincreaseinallfactorsofproductioncausesanincreaseinoutputofthesamepercentage.Forexample,ifafirmincreasesitsuseofcapitalandlaborby50percent,andoutputincreasesby50percent,thentheproductionfunctionhasconstantreturnstoscale.
Iftheproductionfunctionhasconstantreturnstoscale,thentotalincome(orequivalently,totaloutput)inaneconomyofcompetitiveprofit-maximizingfirmsisdividedbetweenthereturntolabor,MPL⨯L,andthereturntocapital,MPK⨯K.Thatis,underconstantreturnstoscale,economicprofitiszero.
4.ACobb–DouglasproductionfunctionhastheformF(K,L)=AKαL1–α.Thetextshowedthattheparameterαgivescapital’sshareofincome.Soifcapitalearnsone-fourthoftotalincome,thenα=0.25.Hence,F(K,L)=AK0.25L0.75.
5.Consumptiondependspositivelyondisposableincome—i.e.theamountofincomeafteralltaxeshavebeenpaid.Higherdisposableincomemeanshigherconsumption.
Thequantityofinvestmentgoodsdemandeddependsnegativelyontherealinterestrate.Foraninvestmenttobeprofitable,itsreturnmustbegreaterthanitscost.Becausetherealinterestratemeasuresthecostoffunds,ahigherrealinterestratemakesitmorecostlytoinvest,sothedemandforinvestmentgoodsfalls.
6.Governmentpurchasesareameasureofthevalueofgoodsandservicespurchaseddirectlybythegovernment.Forexample,thegovernmentbuysmissilesandtanks,buildsroads,andprovidesservicessuchasairtrafficcontrol.AlloftheseactivitiesarepartofGDP.Transferpaymentsaregovernmentpaymentstoindividualsthatarenotinexchangeforgoodsorservices.Theyaretheoppositeoftaxes:
taxesreducehouseholddisposableincome,whereastransferpaymentsincreaseit.ExamplesoftransferpaymentsincludeSocialSecuritypaymentstotheelderly,unemploymentinsurance,andveterans’benefits.
7.Consumption,investment,andgovernmentpurchasesdeterminedemandfortheeconomy’soutput,whereasthefactorsofproductionandtheproductionfunctiondeterminethesupplyofoutput.Therealinterestrateadjuststoensurethatthedemandfortheeconomy’sgoodsequalsthesupply.Attheequilibriuminterestrate,thedemandforgoodsandservicesequalsthesupply.
8.Whenthegovernmentincreasestaxes,disposableincomefalls,andthereforeconsumptionfallsaswell.Thedecreaseinconsumptionequalstheamountthattaxesincreasemultipliedbythemarginalpropensitytoconsume(MPC).ThehighertheMPCis,thegreateristhenegativeeffectofthetaxincreaseonconsumption.Becauseoutputisfixedbythefactorsofproductionandtheproductiontechnology,andgovernmentpurchaseshavenotchanged,thedecreaseinconsumptio