Posted by **eric** on Tuesday, November 17, 2009 at 3:51am.

The MorTex Company assembles garments entirely by hand even though a textile ma-

chine exists that can assemble garments faster than a human can. Workers cost $50 per

day, and each additional laborer can produce 200 more units per day (i.e., marginal

product is constant and equal to 200). Installation of the first textile machine on the

assembly line will increase output by 1,800 units daily. Currently the firm assembles

5,400units per day.

- managerial economics -
**aklove**, Tuesday, November 17, 2009 at 7:41am
3) Identify the immediate effect of each of the following circumstances on U.A.E GDP and its components.

a. Farid buys an Italian sports car.

b. Aziz buys domestically produced tools for his construction company

- managerial economics -
**aklove**, Tuesday, November 17, 2009 at 7:53am
4) Consider the following data on US GDP:

Year Nominal GDP (billions) GDP Deflator (base year: 2000)

2008 $12,488 119

2007 $11,055 115.5

a. What was the growth rate of nominal GDP between 2007 and 2008?

b. What was the growth rate of the GDP deflator between 2007 and 2008?

c. What was real GDP in 2007 measured in 2000 prices?

d. What was real GDP in 2008 measured in 2000 prices?

e. What was the growth rate of real GDP between 2007 and 2008?

f. Was the growth rate of nominal GDP higher or lower than the growth rate of real GDP? Explain your answer

- managerial economics -
**economyst**, Tuesday, November 17, 2009 at 10:53am
Eric: do you have a question?

Aklove: Do a little research, then take a shot. What do you think? I or other will be glad to critique your answers.

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