1. Unemployed worker; discouraged worker
a. Unemployed worker - people who are jobless, actively seeking work, and
available to take a job, as discussed above
b. Discouraged worker - is a person of legal employment age who is not actively
Review pages 57-73 in Common Sense Economics.
Use the economic way of thinking to answer three of the following four questions. Be sure to
answer each in at least two complete sentences. Provide page references to CSE and other
Please read the article What Is the Unemployment Rate and How Is It Measured? (Links
to an external site.) which provides a review of the unemployment rate.
After having read this week's Common Sense Economics reading assignment on
1. Was the governments Cash for Clunkers program a poor decision? Who gained from
the program? Who lost?
a. Yes, auto companies gaines, everyone else lost.
2. How do investments in productive assets and improvements to technology spur eco
Explain how unemployment impacts various groups of workers differently. Describe the
pros and cons of the US unemployment compensation system.
According to psychologists, in terms of stressful events, the loss of a good job
ranks only s
1. Water is essential for life, while diamonds are merely visually attractive. Why is the price
of water so low relative to the price of diamonds?
a. The reason is that water is something that people can get every day something that
Employing as many of the CSE principles as possible, respond to one of the following.
1. Explain how the self-interest of individual consumers and producers creates an orderly
economy in which planning by a central authority is not requir
1. Compare and contrast the following pairs of terms:
a. aggregate demand; aggregate supply
i. Aggregate demand - The relationship between the economys price level
and aggregate output demanded, with other things constant
1. GDP is the market value, at current prices, of all goods and services produced in an
economy in a years time. Please watch the CourseMate Ask the Instructor video titled
What is included in the calculation of the GDP? (Note: It is the
1. What is demand? How does a change in price impact the behavior of consumers? What
happens to the demand curve when prices change in either direction?
a. Demand - a relation between the price of a good and the quantity that consumers
Use the economic way of thinking to answer two of the following three questions. Be sure to
answer each in one or two complete sentences. Provide page references to Common Sense
Economics and other learning materials when appropriate.
1. Explain the difference between production and productivity.
a. Production - a process that transforms resources into goods and services
b. Productivity - the ratio of a specific measure of output, such as real GDP, to a
1. Please read ECON Chapter 3, Section 3-2b. Compare and contrast Sole Proprietorships,
Partnerships and Corporations by describing differences in the following areas.
a. Ownership - sole proprietorship: single-owner firm, partnerships: t
How do profits and losses impact what is produced in a market economy?
They impact the product by what materials would be used the next time, if it
would be better quality or the same, if the product needs to be changed to a
1. Describe the relationship between income and consumption as documented in Exhibits 1
and 2 in ECON Chapter 9? How did the ratio of income to consumption change between
1975 and 2012?
a. As income becomes more and more people spend more
1. aggregate demand; aggregate supply
a. Aggregate demand - the relationship between the economys price level and
aggregate output demanded, with other things constant
b. Aggregate supply - the total supply of goods and services produced
Applying the concepts and using the terminology introduced in ECN2000 so far, describe
how a consumer decides whether to purchase a good? When a consumer purchases a
good, what does this reveal about the consumer?
They choose between ha
1. Write a two to three sentence summary of each of these two concepts.
This means that people will choose the cheaper way of life or the way of life that is more
effective for them in the long run. For example when gas
1. What are transaction costs? How do middlemen reduce transaction costs?
a. It takes time, effort, and other resources to search out potential trading partners,
negotiate trades, and close the sale. Resources spent in this way are called
In your own words, please describe each of the three questions every economic system
a. What goods and services are to be produced?
i. The goods and services that should be produced are what the consumers
are wanting at th
Develop a list of five to ten possible Secondary Effects of one of the following
Providing two years of community college at no charge to high school
Requiring automobile manufacturer to make only cars that get at leas
The total amount households, firms, governments, and the rest of the
world plan to spend on output at each level of real GDP, or real income is
represented by the _ .
aggregate expenditure line
The _ shows the relationship between an economy's pr
1.Define market structure. What factors are considered in determining the market structure of a
particular industry? Market structure refers to the characteristic features of the market that is
determined by the behavior of the market. The facto
1.Amos McCoy is currently raising corn on his 100 acre farm and earning an accounting profit of $100
per acre. However, if he raised soybeans, he could earn $200 per acre. Is he currently earing an
economic profit? Why or why not? They would not
1.Suppose that 50 units of a good are demanded at a price of $1 per unit. A reduction in price to $0.20
results in an increase in quantity demanded to 70 units. Show that these data yield a price elasticity of
0.25. By what percentage would a 10
1.(Definition of Microeconomics) What determines whether or not a resource is scarce? Why is the
concept of scarcity important to the definition of economics? Resources are used for production and are
necessary to help produce goods and services
Kroon: The currency of Estonia.
Labour force: The total number of people employed or seeking employment at a given
wage rate in a country or region in a given time period.
Legal tender: Coins or banknotes that must be accepted if offered in payment of a d
Foreign Direct Investment
FDI is investment made by a multinational corporation in a country other than where its
operations originate; the establishment of branches of productive processes abroad or the purchase
of foreign firms; investment by MNC's in p
This involves the manipulation of the Money Supply and the rate of interest by
the monetary authorities (MPC, Bank of England in UK). The purpose of
monetary policy is:
1. Control the rate of inflation.
2. Influence the level of economic a
THE GLOBAL ECONOMY F585
EXTRACT 2 New EU Member States & the
Free Floating Exchange Rates
With a free floating exchange rate, the value of the currency is determined by
demand & supply; theres no intervention by the cent