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# note_1 - (c You are selling your old bike to your friend(d...

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Econ 102 Spring 2011 TA Note for Week 1 Sangyup Choi([email protected]) Exercises 1. Which of the following is a °ow variable? c (a) The value of the house in which you live (b) The balance in your savings account (c) Your monthly consumption of hamburgers (d) The number of hamburgers in your refrigerator at the beginning of the month 2. GDP is b 3. GDP measures d 4. Suppose that a farmer grows wheat and sells it to a baker for \$1, the baker makes bread and sells it to a store for \$2, and the store sells it to the customer for \$3. This transaction increases GDP by \$( 3 ). 5. Which of the following is not included in GDP? c (a) You are working in Bruin Store and get paid in terms of scholarship (b) You are working in Ohara and get some tip from drunk people

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Unformatted text preview: (c) You are selling your old bike to your friend (d) You are selling your old car so hire a dealer and pay commission. 6. Which of the following is not a decision made by a competitive ±rm? c (a) The number of employees to hire (b) How much to invest in machines (c) What price to ask for its product 1 (d) How much to produce 7. Suppose that a major natural disaster destroyed a large part of a country&s capital stock but miraculously did not cause anybody bodily harm. What will happen to the real wage rate?(assuming ±rms are acting competitively) decreases 8. What happens to US GDP if import of cars from South Korea increased? doesn&t change 9. What are three assumptions of market environment and ±rm&s behavior to make the below is true? W P & L + R P & K = Y all labors are the same labor market is perfectly competitive ±rms are pro±t maximizers 2...
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