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incur an economic loss? How much will the profit or loss be? Show all
calculations.
(b.) (15 points) Refer to the above data. If the product price is $55 at its
optimal output, will the firm realize an economic profit, break even, or
incur an economic loss? How much will the profit or loss be? Show all
calculations.
5. (TCO D) A software producer has fixed costs of $30,000 per
month and her Total Variable Costs (TVC) as a function of output Q are
given below:
a.) (15 points) If software can only be produced in the quantities above,
what should be the production level if the producer operates in a
monopolistic competitive market where the price of software at each
possible quantity is also listed above? Why? (Show all work.)
(b.) (15 points) What should be the production level if fixed costs rose to
$50,000 per month? Explain.
6. (TCO F)
(a.) (20 points) Suppose nominal GDP in 1999 was $100 billion and in
2001 it was $270 billion. The general price index in 1999 was 100 and in
2001, it was 150. Between 1999 and 2001, the real GDP rose by what
percent?
(b.) Use the following scenario to answer questions (b1.) and (b2.).
In a given year in the United States, the total number of residents is 170
million, the number of residents under the age of 16 is 38 million, the
number of institutionalized adults is 15 million, the number of adults
who are not looking for work is 17 million, and the number of
unemployed is 10 million.
(b1.) (5 points) Refer to the data in the above scenario. What is the size
of the labor force in the United States for the given year?