Econ201_OdeaWinter2017_Midterm1

Econ201_OdeaWinter2017_Midterm1 - Econ.201 Winter 2017...

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Unformatted text preview: Econ .201 Winter 2017 Midterm 1 Name: 5% Stcg L! l - Section: £52 Student Number: 14 32mg __ Full explain your answer to each question completely. Use graphs as appropriate. 1. Explain What is meant by menu costs of inflation. 5 points. Mm“ Chékdfi‘l-Qawfll 093+ a; Chang/V1»; PHCC5 m? Q/‘Lalfsl’tél/ wine/ea mam ms nu“ maml%.cau$& buSmasqcs W ”04""SFPML5 (030% J“ 17ch (”W exfwsave, fig W Chh'yfnfiflbF/nbs. @xplain What is meant by structural unemplOyment, giving an example. 5 points. @ Mai/Mm»! WMf/ejmefii“ if c; LAM aw“. m1 / \ leflmfi Mat is; tome 3"? Mn”; cw; Mm PM? u. m 3b eM «g er mfg: m. firms (with? 429 faxpiaw fiflfi’t A‘i‘ Qifémwb (9iL {Ale if W, (4 k0.” Mai/Wt r} 41%33/ {j e; W; (Que—1%, if; ,6?“ r/g/ W Hwy Wye? 25/?»1/9“ HE fitnea cmmf, dfzpccm”? in WWW»? mi Mb? 99 mime? 5’77, 0/ fli/cha/ Fame (13»— ?‘D to 25:5 WWW/“7%“ JV?” W law-9F— jobs (Mai hat, away/if" Qflfaflflrfi. m J99 55AM," Butter Guns Figure 1: Production Possibilities Frontier for the US . . 7 / 3. For this question, refer to figure 1. At which point is the opportunity cost of Butter 10W€St~ . /5 Explain why. 5 points. ' pvfli‘Qéjbaau-x. that :5 M “Swim“ '5 W‘mg’ Mgnzewnfel, Nam? 'Mk 724$ “(1/66“ 2907 Pf—QJQCCJ #74, [jMH’Lr' 25 55W p/poflucepl ai’a Vm-Weé’kslrml’wtl Imam; AM. he; mjmmm 4a”! (”W/“5’31 é-“L' 34420705 71““ V70 5147“" #LQS Leg/l (05%.. ‘ €49 Explain, referring to points in figure 17 the concept of increasing opportunity cost. 5 points. “I 147 (6 0t} #00 L gp/é’LLV; gig in: fwrl’lfxfw a #ny‘kxk” 1: WC...» flag, Mma. cit-M55 w. 7%, “‘3' £537” 5" if”? #2:" A“ fornkfl: / W Lififlof he “7 ~27 :3? i” i’: A"? Wmmnm 9m 5 11 a wt, L/ {gum V/‘yi/M. i4?” flank 6/ (fig/(9)9 3.94:) ha U(_, M 17429112”! V/ {3" £‘{?'%‘~ art? Hit”. #I/W 4570a #:ijiff “.57 ,, é[email protected]ésr‘; 9‘1! NEE: £8125“? CM M _ :4 ifiréziv‘r’ *491Lfi3may .945”; We, flak/”MU :.W.?# of.” ”#— #vw'wm 4:14.55“. am; we W? W W4- 47 342mm Wag; 70‘2“}? “4494': 126755;; A4(’ybvgfi;hé;%f'7glgkdFgévwrl‘df:jfl‘ Jim’- 8. Explain whether each of / part of s the f0 own W |[ b h P wh'ch e 7 GD , and 1 pend 11 i g i counted 3. part of 201 US ing it shoul t. 'ther why 11_0 d be counted as, or if it should not be counted as e1 , 3 ca! k 1|. I; [he llll‘lell Stale Forest SCI-Vice- 3 I L l ( ) 00118 tr ucted 1n Kentuc y a (1 501d 0 POintS. l I y a ed 11 Ken uck and so (140% consumer 'n Eta nee. 37 points - ! y 7 1 “ ( )-A~-20-1 mo otarc rconstruct i — 7, t , ~ » 1 . i ' .1 v (3) 201; onota cal“ constructed in Japan and sold to a consumer 11 Kentucky 3 P0 1le . '11 ed car dealerslnp 1 constructed in Kentucky, sold to at us (‘1) A 2015 Toyota car, that was Seattle. 3 points. I ' ' Jersey dealershlp 111 New ( ) A 2017 T eta. car constructed in Kentucky and sent to a. car e 0y .. but not yet sold to a consumer. 3 pomts. ‘ ) Y6} ”"6 0k 3.6?”an WWW“ guy/“7 I [ M @ovmmk 6M”? . , 19 54.1%- b) I Y I} mm belcamtml 4‘: cm expcn- dew .. ’40:) W WM? 6; at QWCW, Mo. MM a, I ‘ 1M5 r- - , [a 5,-L H’ \ é JAM/5,9 @wtwwl «a; 0m (“W-1E7” begged 0 t I - .{r b N 19»; a, sztemw m MMQ turn M - is r" 4' I I‘M ‘ 5 f 91 95:3 (jg/mi $§wfi~f3£cj wage", 5L1, a /4:=v~ej/1' ( #77 we I» ”ii“ ; V 0e) 3“ ("H by M mm"; 1?“? M mgh‘nml“ Weep/9"?)- W4 / . , fl 1" WVELk 4’ m. “H Rafiw" £4; a, (91,29,513! (‘23 _ i‘l’ was $93»! m ”/2, map . at tar . "aAi‘r‘V a”! l Nominal GDP (billions of balivars), Rea! GDP (billions of 1997 Delivers) V53 1. 200. 000 1,000,000 800,000 600,000 400,000 200,000 ' vogbfi%°)°: BQQQQQQ’» «9&r1919m719a?’ Year Figure 2: Real and nominal GDP for Venezuela 5‘ For “-11.5 (1119515011, refer to figure 2. Is the following claim true or false? Explain your answer. 10 paints. Clalmr The large increase in nominal GDP over this time period indicates a period of strong 90011011110 growth. F5162, firme, Keel @VF élLéé ”My. acwnl’ m, 0:0 M (pm-ell VflCelm-el/ we, awn gee/é 70ml" m ml 6010;” ’17. gal/4,14% %’ F7 a 5;" film"? f“? 60,431 {$444.9} {WWW}, M a l’lx/Mz’ . 4.097564 32%. If, TLVEV glijfimi‘fieil G’ W? , ‘19:“ 5 M l" 635419;)” Q” ‘9‘! f : IU.£~‘\_‘,~‘7;,‘?V . 1 ‘ ‘W ” a g/ g“ F 1" ~ (5%, pm-e mm; 60 M95 l‘ If); he, e? my: W" at «Wilma- flan m # n/vamf WK 3‘3; W cam/fl“ flsf/C-é‘z 940} WW"! #0:: n0?“ Mata/,4, fM/Wl 4% ecu/23”“ 5C. 4/mdm‘ ‘ In", ) ’11—, I'll-w: fut P m U {fang/“Ll; flag/l 53/ a d’lfi/flgblfl d Quantity 2015 50 7 1 90 2 30 3 Figure 3: Output and prices in a simply economy Quantity 2016 Price 2016 Quantity 2017 80 75 4 4 10 160 40 ' For the next three questions, refer to figure 3. 7. What is the growth rate of nominal GDP between 2016 and 2017’? 5 points. WK 3 3 330 (We '= 6m ao'xe 1‘ 2‘0 Homo =' LN” _ cm (W 0 3W‘56Wm'5 ’— ”WWW K 190 2 617, | 7, 60f GV/Ez‘spyr (9% 8. Using prices in 2016 as a base year, calculate real GDP in 2015. 5 points. “MW My 1, Eff '2. = ‘0‘? Ci {7 x 3 I: “217?? .30 x 47 3111.1 fl? KW?” {312.1211 / «KS 9 Using output in 2015 as a market basket, and 2015 as the base year, calculate the price index in 2017. 5 points. (39“? a; ”y’Z‘H'V W_Mw_ , or“: .~ 4%; o‘r mypr 699M” .1, 14"? face/Wax = ,1__ 1, \ A\ ‘ ‘i E . , ff.“— «1W1 a :fi‘) l I Figure 4: Demand and Supply for Toyota Corollas 10. For this question, refer to figure 4. The market is currently at point E. Suppose there is an increase cost of steel. What point corresponds to the new equilibrium after thls change. PM? 6 cop/Wang Wrb’h “MSW encwl‘é/VM br/CuaSo 6:460 9’th n m mpw QM “(Easter Wags, {74%, Wadi bétm ”mafia rgxpefigrvfil CCU/‘7’“) n“ €u79’31-ew" P7 5; “KW; 12 95 'C/OV’GI la“? 1 W afiwfiv’tl’ QQWU. {to 5r I 0““ age, / Cafimfi‘i fink-r i753"p’\ .5” {mag— 0mg); NHL-"V M g! dM/Wmé (Wwfl i133 l“ 1% #- r {7:}! I ’ "I "I'VLI '4’" ’1'"! r":- n1bp-uf "W ' ' _ I w I , ,4 h of ma‘ Rams Ubera a car r1$zéharing service, géffS‘pen in Seat 1e. _ (b) Depict the effect this will have on the equilibrium in the market for taxi rides, explaining 3? War ope/t9 n1 QAH’Q— '4' é405€1 ”-9 XM‘WI @r MM Wi moles t0 JamcL‘WJ‘e' h-C’ W0 4/56., Cub-)thKSQ i’flC‘fv .ndwnl, flue/397 4 6626/1“ 5’" wqfiLMfi/yq/ a; . 1pm; «Mk5 W” W (Pi/”h? dye/Cm“ cfex .4401 $0 (,de M Bale/dlfmw After Uber opens, the Seattle City Council red ces some of the taxes that Taxi companies Qua 41,? \ must pay. Depict the effect this will have on the market for taxi rides, explaining how / and Why the equilibrium is affected, and compare the market before Uber opened with the situation after the City ngncil policy change. 5 points. M9,! VJr'rW/ / f?! . c/Mm. He»- 61/? MI} gm H’H/ MM. 4/ W, . \ 7215‘s / ,/ $133 _7 {(35 >’.(~-fii ”9"“ Hhé/ {7321“ (Fa/”VA 41‘s {ft-g "(2 Ca LX; 4.3 $23!. Y i ‘fldég M n“! . i t: €17 Icy/«ME (ghee/MM. V/L’J VOQ’ 'M/ (/1219, fiudflx’w m,,_ )4}; .2 egmpré‘a Tr: [/mJ,M_ mare, rf‘Z/ffldgf/ (mfifly, 0V" Mc/rbnfc [/2 m, Wage The Cause? A; (”f—<9 a? bx we, 14 Mr 39W“ W M game; m» 7 Mama/e9; 40 #5 WM” 0 r—' ' J . aka 3 (,6 There is an economy with three fines, two Of-vimffnsrfructs a final goo - [“9 1 produces for Firms 2), and one (F 11111 3) Wth ,7 .-_ 7&9“; following table: 5 points. —_&EI'. ‘ ' v [’Y Calculate GDP in this economy, and show that payments to factors of production, Spending, and total value added are equal. 5 points. 724/ bk] V01 JutaMeJ“ VS a Way_ [/0 Cal/”jam éW’wfi a.“ a; my“? 00:9 1" , 5.00 23“” (36.90 @Depict graphically this economy’s production possibilities frontier for Pineapples and fl/ Coconuts. 5 points. ' Q 3"“ (mph/chm ‘ h work up to workers who can eac are 2 it takes each of these worker one Coconut. onuts? EXPIain Why‘ 5 (0) Suppose that in a nearby city, Vancouver, there 40 hours each week to pick either Pineapples or Coconflts; 20 minutes to pick one Pineapple, and 30 minutes to pICk i. Which city has an absolute advantage in producing COG a - Crappie, . 7(1/ ‘ pomts. '11. Which city has a comparative Advantage in producing CO points. i, m, 0%? 6/17, Seals/He (4015 all exaloreeolvmfl-‘yc. beam/“ab HL' Can I/fl/‘WJVI‘L, Mon, ofl 506% fWOIVC/l" WW1 l/Mcwyen /"')/llll. WM VaflCa/va’ kas pg» 09 5.79.,th J‘a'fk '4— ”$55,934., IJ' can Kwanzaa, WK/k’s (cf If lOW QflflyfiH/IL? @397 9/1 apf’v‘mflpb" : (acorn/V M4} 1% 5% We, t/L com—Mame “- WWK * I Number (in millions) l 92 conuts? Explain Why. 5 Employed Adults Labor Force Working Age Population Marginally Attached Workers Discouraged Workers Figure 5: Labor Force Characteristics 14. What is the labor force participation rate in this economy? 5 points. 7 *5/ cfizPfl/J ’- W'M " WM”— ‘ .é7.$>¢(oc7 M0 ”N’W’W ”In” M I 10 ...
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  • Spring '08
  • SALEHIE
  • Economics, gross domestic product

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