Answer: Given, the ball bearing market is purely competitive. Also at the current stage the firms in this market are earning positive economic profits.
Therefore , in the long run as adjustments occur in the industry, we can expect the market price of ball bearings to<em><u> </u></em><u><em>decrease and individual firms' profits to decrease.</em></u>
This will take place as new firms will enter the market once they analyze that the existing firms are earning positive economic profits. Thus this will lead to decrease in price of ball bearing and further will lead to decrease in profit os a firm.
<u><em></em></u>
<u><em>Therefore, the correct option is (d)</em></u>
Answer: $1000
Explanation:
To calculate the normal cost of this activity, we will use the formula:
Cash slope = (Crash cost - Normal cost) / (Normal duration - Crash duration)
250 = (1500 - Normal cost) / (15 - 5)
250 = (1500 - Normal cost) / 10
Cross multiply
(250 × 10) = 1500 - Normal cost
2500 = 1500 - Normal cost
Normal cost = 2500 - 1500
Normal cost = $1000
Answer:
The current account deficit will increase from 1% to 31% of GDP.
Explanation:
National saving and investment identity helps in understanding the determinants of trade and current account balance. The current account is in balance when the quantity demanded of financial capital is equal to the quantity supplied of financial capital.
Here, the government saving or surplus and private savings are the supply of financial capital and investment indicates demand for financial capital.
The current account balance is
= Supply of capital - Demand for capital
= (30 + 2)% - 33%
= 32% - 33%
= -1%
So the current account is in deficit by 1% of GDP.
If the private savings becomes zero, the current account balance will be
= Supply of capital - Demand for capital
= 2% - 33%
= -31%
The current account will be in deficit by 31%.
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Answer:
The level of saving = $450 billion - $400 billion= $50 billion
Marginal propensity to save = 1- marginal propensity to consume (MPC)=0.5
Expected consumption
MPC= change in Consumption/ change in income 200 billion * 0.5 = $100billion
Therefore consumption = 100 billion + 400 billion = $500 billion
Saving = $650 billion - $500 billion= $ 150 billion
Explanation:
