Chap_2_3_4

# Chap_2_3_4 - ECON 101B Section Handout In ation...

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ECON 101B: Section Handout 1. Prices have been rising for all goods and services. The BLS proposes updating the weights used to calculate the CPI. Which weights are likely to be lowered: the weights of goods with high price elasticity of demand or those with low price elasticity of demand? Why? An economy produces three goods: cars, computers, and oranges. Quantities and prices per unit for years 2009 and 2010 are as follows: 2009 2010 Quantity Price Quantity Price Cars 10 \$2,000 12 \$3,000 Computers 4 \$1,000 6 \$500 Oranges 1,000 \$1 1,000 \$1 1. Calculate nominal GDP in 2009 and 2010. By what percentage does nominal GDP change? ( nominal GDP growth rate ) 2. Taking the price level in 2009 as a basis, calculate real GDP in 2009 and 2010. What is real GDP growth rate? rate ) 4. Assuming that an average consumer buys 1/2 car, 1 computer, and 100 oranges per year, calculate Problem 3 (unemployment - basic concepts) Are each of the following people employed, unemployed, or out of the labor force. 1. A student who works for pay part-time during the school year 2. A student who is interviewing for post-graduation job 3. A stay-at-home mom 4. A man who volunteers with American Foundation for AIDS Research 40 hours per week 5. A professor 6. A man who wants to ²nd a job but who got so discouraged by the lack of employment opportunities that he has not actively looked for work for the past 6 weeks 1

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Problem 4 (unemployment - simple calculations) 1. Suppose employment is 90 million and the unemployment rate is 10 per cent. How large is the labor force? 2. Suppose the unemployment rate is 1 per cent and 2 million people are unemployed. How many people
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## This note was uploaded on 10/04/2011 for the course ECON 101b taught by Professor Staff during the Spring '08 term at Berkeley.

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Chap_2_3_4 - ECON 101B Section Handout In ation...

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