HW1 answers - Name: _ SID: _ Discussion Section: _ Problem...

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Problem Set #1 ANSWERS (Spring 2008) 1/5 Name: _______________________ SID: _______________________ Discussion Section: _______________________ Problem Set #1 ANSWERS Due Tuesday, February 12, 2008 Problem Sets MUST be word-processed except for graphs and equations. QUESTIONS A. Multiple Choice Questions . Circle the letter corresponding to the best answer. (1 points each.) 1. Positive analysis of economic policy: a. Examines the economic consequences of policies but does not address the question of whether those consequences are desirable. b. Examines the economic consequences of policies and addresses the question of whether those consequences are desirable. c. Generates less agreement among economists than normative analysis. d. Is rare in questions of economic policy. 2. Because government services are not sold in markets: a. They are excluded from measurement of GDP. b. The government tries to estimate their market value and uses this to measure the government’s contribution to GDP. c. They are valued at their cost of production. d. Taxes are used to value their contribution. 3. An adverse supply shock would: a. Shift the production function up and decrease marginal products at every level of employment. b. Shift the production function down and decrease marginal products at every level of employment. c. Shift the production function down and increase marginal products at every level of employment. d. Shift the production function up and increase marginal products at every level of employment. 4. Which of the following events would lead to an increase in the marginal product of labor for every quantity of labor? a. An increase in the real wage. b. A decrease in the real wage. c. A favorable supply shock such as a fall in the price of oil. d. An adverse supply shock such as a reduced supply of raw materials.
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Problem Set #1 ANSWERS (Spring 2008) 2/5 5. As a result of the superb economics essay that you wrote during this semester, you won the Adam Smith prize of $100. The receipt of these funds would be an example of: a. The substitution effect being stronger than the income effect. b.
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This note was uploaded on 04/01/2008 for the course ECON 100B taught by Professor Wood during the Spring '08 term at University of California, Berkeley.

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HW1 answers - Name: _ SID: _ Discussion Section: _ Problem...

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