Which point of the business cycle represents a peak? b c d e
1 answer:
The correct answer is A. Consumption reaches its highest point, and then supply begins to fall.
Various economic indicators reach their highest point in the peak month, which is followed by a sharp fall in economic activity. Similar events occur when economic activity reaches a low point and then gradually picks up again. The final month before numerous important economic indicators, such as employment and new housing starts, start to decline, is referred to be the cycle's peak. Real GDP spending is now at its highest position in the economy. Approximately or roughly at the same time as the economy, coincident indicators move or change (i.e. these indicators rise as aggregate economic activity rises and fall as aggregate economic activity falls). The economy enters the peak phase when it reaches its highest level of output, which marks the end of the growth.
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Complete Question:
Which point of the business cycle represents a peak? b c d e
The business cycle figure is attached.
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Answer:
When Rhonda hires the worker to wave the sign for one hour per day, the marginal cost is <u>$10</u> and the marginal benefit is <u>$35</u>. When Rhonda hires the worker to wave the sign for two hours per day, the marginal cost of the second hour is <u>$10</u> and the marginal benefit of the second hour is <u>$20</u>.
Explanation:
The marginal cost is a cost in economics used to measure the amount that will be incurred for making an additional unit of a product or rendering an additional unit of a service. It is generally calculated by dividing the difference in the total cost at two different levels of activity by the difference in the corresponding number of products at the two levels. That is,
Since it costs Rhonda $10 per hour the worker waves the sign, it is easy to calculate the total cost at different levels of work. This means 1 hour of waving the sign = $10 × 1 = $10, 2 hours of waving the sign = $10 × 2 = $20, and so on.
Marginal cost for every hour is therefore $10.
The concept also applies to marginal benefit. Benefit here implies revenue from business less cost incurred.
For when the worker waves the sign:
For 0 hour, revenue = $3 (average customer spending) × 50 = $150.
For 1 hour, revenue = $3 × 65 = $195
For 2 hours, revenue = $3 × 75 = $225
Marginal Revenue:
For 1 hour = = $45
For 2 hours = = $30
Therefore, marginal benefit at 1 hour = $45 - $10 = $35
Marginal benefit at 2 hours = $30 - $10 = $20