Running head: ECONOMICS QUESTIONS

Economics questions

Name

Institution
 ECONOMICS QUESTIONS

Question 1

Present value of the factory = $ 15m/ (1+0.11)4 = $9.88m

Initial cost of the factory is $10m

Net present value = $9.88m – $10 m = $0.12m

We have a negative NPV and hence the project is not worthwhile to undertake. Reject the

project. (Mankiw, 2012)

Question 2

1. To calculate the number of hours worked in one week = hours per worker per week *

the total number of workers employed

40*2375.0 = 95000 hours

2) To find the weekly output = output per hour * no. of hours = 10*95000= 950000

3) To calculate the number of unemployed labor= unemployed labor/labor force * 100 =

125/2500 *100 = 0.05*100 = 5%

 ECONOMICS QUESTIONS

Reference

Mankiw, N. Gregory. Principles of Macroeconomics, 6th ed.