Macroecon Assignment 1

Macroecon Assignment 1 - University of Southern California...

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University of Southern California Department of Economics ECON 205 Principles of Macroeconomics Spring 2007Prof. Safarzadeh Assignment # 1 Student Name :_________________ I- General Topics: Fill in the blanks for the following questions. 1- The Banana Republic’s CPI (consumer price index) at the end of year 2004 was 125. At the end of year 2006 the republic’s CPI was 142. The change in Republic’s CPI from 2004 to 2006 is _________. The average change in CPI is __________. The percentage change for the past two years is ___________. The average percentage change for the past two years is _________. 2 - The Banana Republic’s CPI (consumer price index) at the end of year 2000 was 115. At the end of year 2003 the republic’s CPI was 106. The change in Republic’s CPI from 2000 to 2003 is _________. The average change in CPI is __________. The percentage change for the past two years is ___________. The average percentage change for the past two years is _________. 3- The relationship between price and quantity for a product is given as Q = 100 - 2P, where Q is quantity and P is price. a. Graph the equation in question 3. b. The variable Q in question 3 is called _________ variable. The variable P is called _________ variable. The number 100 is called ___________. And the number -2 is called _________. c. The relationship between Q ans P is a(n) _____________ relation. A \$1 increase in P will ___________ Q by ______________ units. 4- The relationship between price and quantity for a product is given as Q = -10 + .5P, where Q is quantity and P is price. a. Graph the equation in question 4.

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b. The variable Q in question 4 is called _________ variable. The variable P is called _________ variable. The number -10 is called ___________. And the number .5 is called _________. c. The relationship between Q and P is a(n) _____________ relation. A \$1 increase in P will ___________ Q by ______________ units. d. Graph the equations in question 3 and question 4 on the same co-ordinate system. e. At the intersection of the two equations Q = _______ and P =__________ 5. The relationship between the income and consumption of the Banana Republic is given as (numbers are in millions of Banana Republic’s currency): Year Income Consumption 2000 1200 1150 2001 1450 1337.50 2002 1670 1502.50 2003 1820 1615 2004 1900 1675 2005 2100 1825 2006 2300 1975 answer the following questions using the information provided in the table. a.
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This note was uploaded on 03/25/2008 for the course ECON 203 taught by Professor Al-sabea during the Spring '05 term at USC.

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Macroecon Assignment 1 - University of Southern California...

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