1. Inflation is the increase of the overall price level.
The overall price level increased because it was at a total of $7/lb. across all the goods in the
simple economy. This raised to $8.5/lb. across all the products in the simple economy. To
On pages 128-130, questions #2, #3, and #10. You may omit parts (d) and (g) in #10.
On pages 153-155, questions #1, #2, #4 part (a), #7, and #18
2. If cookies cost him 5 cents he would probably eat only 6 because that is where the utility of
eating the co
5.If the head of the Central Bank of Japan wanted to expand the supply of money in Japan in
2009, which of the following would do it? Explain your answer.
Buying government securities in the open market would increase the supply of mone. If the
On pages 94-95, answer questions #3, 5, 8, and 9. For parts that ask for a supply/demand
illustration, you should draw that for yourself to help you determine an answer, but for the
assignment you may instead provide a detailed explanation of what the ill
Economics Unit 5
3. In the short run the business could add more showings or add seats to the area. The fixed
factor for this situation is the 120 seats. In the long run eventually they would still reach a
capacity. At that point they could expand and mak
4. A. Disagree. When two products are substitutes for each other as the
price of one increases the demand for another increases. This is because
if the products are similar enough and one can replace the other, the
consumer will buy the cheaper option.
Macroeconomics Article Essay
In our capitalistic nation wealth should be very widespread. The economy
ideally works to give those who work hard the upper hand financially. But there
are some problems that keep the rich on top and the unfortunate in the po
pages 226 #1,4,5
MPC- The fraction of a change in income that is consumed.
Multiplier- The ratio of the change in the equilibrium level of output to a change in
some exogenous variable.
The higher the MPC the higher the multiplier and vice versa. The m
Entertainment might not seem like a necessity, but when the economy is in recession,
people chose to spend their hard earned money on entertainment media. During the recession
one of the biggest thriving products was video game
SS150 Principles of Economics
Unit 7 Assignment
Classify each of the following people as employed, unemployed, or out of the
labor force. If the person is unemployed, also indicate if the unemployment is
frictional, structural, or cyclical.