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Assume that the average consumer in Mexico and the average consumer in the United States buy the quantities and pay the prices indicated in the following table:
a. Compute U.S. consumption per capita in dollars.
b. Compute Mexican consumption per capita in pesos.
c. Suppose that 1 dollar is worth 10 pesos. Compute Mexico's consumption per capita in dollars.
d. Using the purchasing power parity method and U.S. prices, compute Mexican consumption per capita in dollars.
e. Under each method, how much lower is the standard of living in Mexico than in the United States? Does the choice of method make a difference?
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An asset in the 5-yr. MACRS property class cost $100,000 and has no salvage value after six years of use. The asset will generate $300,000 in annual revenues and will require $100,000 in annual labor costs and $50,000 in annual materials costs.
where C represents consumption, DI represents disposable income, I represents investment, G represents government purchases, T represents net taxes, Y represents real GDP, X represents exports, and IM represents imports.
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In what ways does our trade model require further extension?
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If the demand curve for the Kansas City Chiefs' tickets was Q= 500,000 - 200p and their marginal cost=0, then,a. How many tickets would the team be able to sell (ignoring capacity constraints) if it behaved as if it were in a competitive market? M..
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