Use the Following General Linear Supply Function $Q _ { 5 } = 40 + 6 P - 8 P _ { I } + 10 F$

question 1

Multiple Choice

Use the following general linear supply function: $Q _ { 5 } = 40 + 6 P - 8 P _ { I } + 10 F$ where $Q _ { 5 }$ is the quantity supplied of the good,P is the price of the good, $P _ { I }$ is the price of an input,and F is the number of firms producing the good.If $P _ { I }$ = $20 and F = 60 what is the equation of the supply function?

• A) \(Q _ { s } = 400 + 6 P\)
• B) \(Q _ { s } = 40 + 8 P\)
• C) \(P = 480 + 6 Q _ { s }\)
• D) \(Q _ { s } = 480 + 6 P\)
• E)none of the above

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Definitions:

Net Capital Outflow

The financial divide between home nationals acquiring assets abroad and foreigners acquiring assets in the home country.

GDP

Gross Domestic Product, which measures the total value of all goods and services produced within a country's borders in a specific time period.

Consumption Expenditures

Total spending by households on goods and services, excluding purchases of new housing.

Saving

The process of setting aside a portion of current income for future use.