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Department of Economics
ECON 2450 - Midterm Examination
July 13, 2006
Suggested Solutions to Part C (C3(d) and C4)
C3 (d). Derive and graph an equation for the aggregate demand curve, expressing Y as a
Problem Set 2
Due on Feb. 26 (in class)
1. a) This is a microeconomic question because it addresses the effects of a single firms actions
(the closure of a manufacturing plant) on a single individua
Problem Set 1
Due on Feb. 9 (in class)
This assignment requires you to read Chapter 1 through Chapter 4 of Krugman and Wells
textbook. After you finish this assignment, you are expected to have a bet
DEPARTMENT OF ECONOMICS
Prof. Jon D. Wisman
Office: Kreeger 111
COURSE DESCRIPTION: Macroeconom
What is Economics?
- -Supply and Demand
- -Financial and monetary policy (Financial institutions are important because they
make the resources available to those who use them & financial policy regulates this)
- -The creation (Productio
Answers to Homework Set #10
The following graph shows the market for speedboats. Assume that some of the supply
of speedboats is coming from other countries and that a tariff (T) is imposed on
After the tariff, the price that foreign
Answers to Homework Set #1
1. a. The relevant costs are the marginal costs, or $12 a month.
b. The economic decision rule (if MB>MC, do it; if MB<MC, dont) will make the
family as well off as possible.
c. We need to know the marginal benefit of call waiti
Today, we will cover three issues:
Simple tools economists use:
One very important concept:
Graphs and slopes
A Note on the Math you need to know
(This is probably the easiest class of the whole semester)
Let me also introduce Ben Derby (ou
Answers to Homework Set #6
The number of years it takes a certain number to double is 72 divided by its
annual rate of increase.
bii). 36 years (=72/2),
biii) 18 years (=72/4)
a) matches with (3): the Classical economists
Answers (and some further explanations) to Homework Set #9
1. Fill in the missing words. Based on the Phillips curve, there is a trade-off between inflation and
unemployment. There is broad agreement that there is no such trade-off in the long-run.
Answers (and some Explanations) to Homework Set #8
1. Use the data below to calculate a) labor force, b) unemployed, and c) unemployment rate.
Show your calculations to get full credit.
Incapable of working
Unwilling to work
Some Multiple Choice Questions with Answers
for Chapters 13-14
Who determines U.S. monetary policy?
The Internal Revenue Service
The Federal Reserve
In the short run if the Fed undertakes exp
Answers to Homework Set #2
1. a. The production possibilities are shown in the graph below. At this point, you can
ignore the outer curve, labeled Combined production possibility.
Answers to Homework Set #5
1. Match the following reasons why the aggregate demand curve slopes down with their correct
explanations (please write the alphabetical letter on the line):
As domestic prices fall, exports
increase and imports decrease.
Answers to Homework Set #3
Price per candy bar
1. a. As the price of candy bars declines,
the quantity of candy bars demanded
rises. This happens because of a)
lower prices attract purchasers and b)
substitution. b): As the price of candy