Midterm 3 - Midterm2 1. identify each of the following...

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Midterm 2 1. identify each of the following topics as being part of microeconomics or macroeconomics: a. The impact of a change in consumer income on the purchase of luxury automobiles. b. The effect of a change in the price of coke on the purchase of pepsi c. The impact of a war in the middle east on the rate of the inflation in the us d. Factors influencing the rate of economic growth e. Factors influencing the demand for tractors f. The impact of tax policy on national saving g. The effect of pollution taxes on the us copper industry h. The degree of competition in the cable television industry i. The effect of a balanced budget amendment on economic stability j. The impact of deregulation on the savings and loan industry A, b, e, g, h and j are microeconomic topics. C, d, f, and I are macroeconomic topics 2. Suppose we are analyzing the market for hot chocolate. State the impact each of the following would have on demand or supply a. The price of tea, a substitute for hot chocolate, falls. b. The price of cocoa beans decreases. c. The price of whipped cream, a complement for hot chocolate, falls. d. A better method of harvesting cocoa beans is introduced. e. Producers expect the price of hot chocolate to increase next month. a. Demand left, b. supply right, c. demand right, d. supply right, e. supply left 3. In 2001 the price of milk is $1 and the quantity is 100. In 2001 the price of honey is $2 and the quantity is 50. In 2002 the price of milk is $2 and the quantity is 100. In 2003 the price of milk is $2 and the quantity is 200. In 2001 the price of honey is $4 and the quantity is 100. Compute nominal GDP, real GDP, and the GDP deflator for each year using 2001 as the base year.
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Nominal GDP 2001 is $200, in 2002 it is $400, and in 2003 it is $800. Real GDP 2001-$200, 2002-$400, 2003-$400. GDP deflator 2001-100, 2002-100, 2003-200 4. A. if the price in the market is $8.00, would the market be at equilibrium? If not, is there a shortage or a surplus? How large is the shortage or surplus? B. if the price in the market is $5.00, would the market be at equilibrium? If not, is there a shortage or a surplus? How large is the
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Midterm 3 - Midterm2 1. identify each of the following...

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