Consider the economies of macmillana and bloedelo, which are identical except that the multiplier in macmillana is smaller than that in bloedelo. this means that macmillana's gdp is bloedelo's gdp to fluctuations in the components of total spending. features of the economy that reduce its sensitivity to shocks are called automatic stabilizers. suppose again that the economies of macmillana and bloedelo are identical except that macmillana has instituted a system of unemployment insurance, whereas bloedelo hasn't. macmillana's economy is sensitive to fluctuations in gdp than bloedelo's economy. this is because the system of unemployment insurance has macmillana's multiplier.

Horace society is planning its annual western fair raceway gala. the gala committee has assembled the following expected costs for the event: dinner (per person) $10 gaming token and program (per person) $2 prize payouts $4,300 tickets and advertising $800 private box suite rental $1,700 lottery licenses $200 the committee members would like to charge $40 per person for the evening’s activities.required: 1. what is the break-even point for the dinner-dance (in terms of the number of persons who must attend)? 2. assume that last year only 200 persons attended the dinner-dance. if the same number attend this year, what price per ticket must be charged in order to break even? 3. refer to the original data ($40 ticket price per person). prepare a cvp graph for the dinner- dance from zero tickets up to 600 tickets sold.