1) A warehouse can be set up in 1 of
5 ways. Below are the different outputs
the factory can produce in each set up.
|
A |
B |
C |
D |
E |
|
|
Computers |
0 |
1 |
2 |
3 |
4 |
|
Books |
100 |
90 |
70 |
40 |
0 |
a. What is the marginal opportunity cost
of the second computer?
b. What is the marginal opportunity cost of
the third computer?
c. What is the marginal opportunity cost
of the forth computer?
2) State
in words and show with a graph the effect of the following events on
equilibrium price and quantity of the market given
a)
The price of cheese
increases. Market: Pizza
b)
A study is released showing
that eating apples causes caner. Market:
Apples
c)
Income in the US increases by
20%. Market: Widgets, which are an inferior good.
3) Assume you live in an economy that has a population of
2,000,000 people over the age of 16. The
labor force in your economy is 1,500,000 people and 1,300,000 people are
currently working.
a.
Calculate
the unemployment rate
b.
Calculate
the employment rate
c.
Calculate
the labor force participation rate
4) From
the information in the table below, calculate the following statistics.
|
Personal consumption |
$1,450 |
|
Investment |
350 |
|
Interest |
250 |
|
Government purchases |
650 |
|
Employee compensation |
1400 |
|
Net exports |
-67 |
|
Rents |
8 |
|
Depreciation |
180 |
|
Net foreign factor income |
10 |
a. Gross domestic product
b. Gross national product
c. Net domestic product
d. Profit
5) If in 2020 there is higher than expected
inflation who will benefit and who will be hurt?
6)Using the rule of 72 answer the
following questions.
a.
In how many years will it take income to
double if it is rising each year by 1 percent? 2 percent? 4 percent?
b.
A country’s income begins at $10,000 and
rises to $20,000 in 18 years. What is the approximate annual rate of increase
for income?
7) State whether the
following events would shift the AD
curve to the right, to the left, or not at all.
a.
Foreign income decreases.
b.
The exchange rate value of the dollar
falls.
c. Consumers expect lower income in the future.
d.
U.S. price level rises as expected.
8)
State whether the following is a
component of M1, M2, both, or neither.
a.
Savings deposits
b.
Available credit on a credit card.
c.
Checking account balance accessible by
an ATM card.
d.
Cash in your pocket.
9) Calculate the simple money multiplier given
the following reserve requirements.
a. 10%
b. 25%
10) Suppose that the Fed needs to conduct expansionary policy. Explain how it would use each of the three
policy tools.
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