Practice Midterm #1

Practice Midterm #1 - Prof. V. Ramey Econ 3 Winter 2011...

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Prof. V. Ramey Name ____________________________________ Econ 3 Winter 2011 Student Number ____________________________ Section___________________________________ Practice Midterm 1 (this is slightly longer than the actual one will be.) Part I. Short Answer. Write your answers on this exam. 1. (12 points) Suppose that in Rome only two types of goods are produced and consumed, tunics and wine. Year Price of tunics (in denarius) Quantity of tunics produced and consumed Price of wine (in denarius) Quantity of wine produced and consumed 400 50 100 20 60 410 55 140 30 70 A. What is nominal GDP in the Year 400? ___________ B. Using the Year 400 as the base year, what is the percent increase ____________ in real GDP from Year 400 to Year 410? C. Again using the Year 400 as the base year, calculate the Consumer ____________ Price Index (CPI) in the Year 410. 1
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2 . Questions on globalization and technological change (16 points) A. Many people believe that globalization and skill-biased technological change led to an increase in wage inequality in the U.S. Use two graphs to show the effects of these changes on the market for less-skilled workers and the market for high-skilled workers and discuss the effects on wage inequality. Clearly label your graphs. Briefly explain your results in a paragraph. 2
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B. Although Western European countries were beset by the same forces of globalization and skill-biased technological change, wage inequality did not increase as much, but employment of low-skilled workers went down. Use a graph and a paragraph of description to explain why. 3
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(10 points) Questions on Malthus’ predictions and actual events. A. Summarize briefly what Malthus predicted about the effects of population growth and the rationale he had for this prediction. Use a graph as part of your answer. B.
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This note was uploaded on 02/21/2011 for the course ECON 3 taught by Professor Peters during the Spring '07 term at UCSD.

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Practice Midterm #1 - Prof. V. Ramey Econ 3 Winter 2011...

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