Econ 105 ECON 105 Homework 2 KEY Open Economy Macroeconomics Due November 29 Instructions: The purpose of this assignment it to integrate the explanations found in chapter 16 ok Kennedy with the AD-AS model and the Money demand (MD) Money supply (MS) mode
1. You are planning to spend Saturday working at your part-time job, but a friend asks you to
a. What is the cost of going skiing in this case?
If you choose to go skiing instead of working at your part-time job, the
1. A flour mill produces $1000 worth of flour, of which $750 goes to a bakery and $250 to
consumers. A water supplier produces $300 worth of water, of which $200 goes to the
bakery and $100 to consumers. The bakery produces $15
Junjie Liu Econ 105
Practice Multiple Choice
Chapter 1Ten Principles of Economics
1. With what concept does economics deal primarily with?
2. Which of the following is NOT included in the decisions that every soci
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1. Describe the components of Canadas balance of payments and explain why the balance of payments accounts always balance. 2. Describe the demand for and supply of foreign currency. 3. Explain the various factors that cause cha
Economics and Government
Chapter 3. Free Markets Do Work! Efficiency and the First
Last modified 22-Sep-15
Normative and Positive Statements, Again
Recall what we have learned about normative and positive statements in chapter
ECON 105 Quiz #1
AE K M N
L G H T 0 D
PART I: Answer All Questions in Terms of Vertical Distances ( i.e. D-T, Z-G)
Above is a Private, Closed Economy
1.Equilibrium occurs at (vertically): 2. I
1. Which of the following statements are positive, and which are normative? How can you tell
Rent controls reduce the quantity and quality of housing available.
Rent controls have no effect
Final Exam ECON 104
RULES: No notes or other source materials are permitted. All such items must remain on the
floor. You may use only: pens, pencils, rulers, erasers, calculators and watches. Calculators are
not required, and calculators with alphanumeri
How do government decisions actually get made?
Stiglitz (Four Fallacies) points out that the government has powers that private
firms do not have.
One interpretation is that we collectively give them these powers so that we c
Equity and efficiency
We can also think of efficiency in terms of the set of things that are possible.
Consider a Possibility Frontier which defines all the feasible situations for two
Draw picture of you and me an
Health Care and Health Insurance
What is being insured?
the idea is to insure individuals against the risk of bad health, which has big costs, and
therefore big income effects.
why isnt it provided in the private sector? Many reaso
Lecture 2: Trade, Prices and Efficiency
A Pareto improvement (hereafter just improvement) is a change that makes somebody
better off without making somebody else worse off.
A strict improvement makes everyone better off
The Military, War and Government Failure
Military/defence expenditure is the canonical case of a public good. National security
and defense are by definition collectively consumed.
I cannot consume more national defense than you, because it
Deficits and Debt
let bold print denote definitions that are very important. Let italics denote definitions and
terms that are somewhat important.
What is government debt?
Deficit= expenditure - revenue
Debt=last years debt + deficit
Information and Insurance
1. The Conditions for efficiency of markets imply easy solutions on the part of government:
Perfect competition implies that nobodyneither buyer nor sellercan influence
If some actor has power, the government can
Midterm ECON 104
RULES: No notes or other source materials are permitted. All such items must remain on the floor. You may use only:
pens, pencils, rulers, erasers, calculators and watches. Calculators are not required, and calculators with alphanumeric
Economics and Government
Chapter 2. Economics: The Study of Choice
Last modified 09-Sep-15
Ultimately, economics is the study of choice. Because choices range over every imaginable aspect of
human experience, so does economics. Econom