Econ 212-Spring 2007 Midterm

# Econ 212-Spring 2007 Midterm - Spring 2007 ECONOMICS 212...

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Spring, 2007 ECONOMICS 212 Professor D. K. Benjamin MID-TERM EXAM Print and encode (bubble) your name, student number, and quiz section number on the scoring sheet. If you fail to do these actions correctly, you will be penalized five points . On the answer sheet, mark the letter corresponding to the correct answer, using a pencil. If you (i) fail to answer a question, (ii) select the incorrect answer, or (iii) select more than one answer, you will receive zero credit for that question. There are 30 questions. Read carefully and engage brain before putting tiger in gear. Go Tigers! Questions 1-3 are based on the following: Consider a world in which there are just three goods and services: Cars, clothes, and food, all of them new, domestically produced, final goods and services. Listed below are the prices and quantities of these goods and services produced in the base year and in the current year. Base Year Current Year Cars P r i c e 1 0 1 0 Quantity 10 20 Clothes P r i c e 1 0 2 0 Quantity 20 10 Food P r i c e 5 1 0 Quantity 10 20 1. The price level in the base year was: a. 0.50 b. 0.67 c. 1.0 d. 1.5 e. none of the above 2. The price level in the current year is: a. 0.5 b. 1.0 c. 1.3825 d. 1.5 e. none of the above 3. Real GDP in the current year is a. 200 b. 300 c. 400 d. 450 e. none of the above This space deliberately left blank

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Questions 4 and 5 are based on the following information about Hooville. (whose citizens are called Hoos): 2400 Hoos live there; all are 16 or older; none are in institutions 1800 Hoos are employed 200 Hoos are not employed but are looking and available for work 400 Hoos are not employed and are not looking for nor available for work 4. The labor force of Hooville is: a. 300 b. 500 c. 1200 d. 1500 e. 2000 5. The unemployment rate in Hooville is: a. 10% b. 17.47% c. 20% d. 25% e. 331/3% Questions 6-9 are based on the following information. Output in Batavia is produced using capital and labor. There is initially a fixed amount of capital (K 0 ), but the amount of labor may be varied in accordance with labor market conditions. There is also a supply of money in Batavia, which is used to make all market transactions. 6. What will happen to real wages and the price level in Batavia if their attendance at Dr. B’s Econ 212 course causes an increase in the human capital of workers and thus an increase in their productivity? a. increase, decrease
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Econ 212-Spring 2007 Midterm - Spring 2007 ECONOMICS 212...

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