ECON312N All Weeks Homeworks (September 2019)

<span itemprop="name">ECON312N All Weeks Homeworks (September 2019)</span>

ECON312N Principles of Economics

Week 1 Homework

Question 1

Label each entry in the list as dealing with a microeconomic topic or a macroeconomic topic. Type microeconomic or macroeconomic for each item.

Motor vehicle production in China is growing by 10 percent a year.

Coffee prices rocket.

Globalization has reduced African poverty.

The government must cut its budget deficit.

microeconomic Apple sells 20 million iPhone 6 a month.

Question 2

A professor changes the penalty for cheating on exams from getting a 0 on the exam to getting an F in the course. The professor has

recognized that students don’t respond to incentives.

increased the marginal cost of cheating.

decreased the marginal benefit of cheating.

made all the students act in the social interest.

recognized that students don’t make rational choices.

Question 3

John has two hours of free time this evening. He ranked his alternatives, first go to a concert, second go to a movie, third study for an economics exam, and fourth answer his e-mail. What is the opportunity cost of attending the concert for John?

attending a movie

studying for an economics exam

answering his e-mail

going to the concert because that is what John choose to do

attending a movie, studying for an economics exam, and answering his e-mail

Question 4

The vertical axis in a graph

has no origin.

measures time only in a time series graph.

measures time in a cross-section and time series graph.

is named the x-axis.

is named the y-axis.

Question 5

If workers in Mexico produce fewer goods and services per hour than workers in the United States in all areas of production, then

both the United States and Mexico will benefit from trade with the other.

the United States will benefit from trade with Mexico but Mexico will not.

Mexico will benefit from trade with the United States but the United States will not.

it is unknown whether either country can benefit from trade with the other.

neither Mexico nor the United States will benefit from trade with the other.

ECON312N Principles of Economics

Week 2 Homework

Question 1

Suppose over the next several years the productivity of firms producing electric cars improves dramatically. The advance in productivity leads to

an increase in the supply of electric cars so that the supply curve shifts leftward.

a decrease in the supply of electric cars so that the supply curve shifts leftward.

a decrease in the supply of electric cars so that the supply curve shifts rightward.

no change in the supply of electric cars, only a change in the quantity supplied of electric cars.

an increase in the supply electric cars so that the supply curve shifts rightward.

Question 2

Suppose the San Francisco 49ers lower ticket prices by 15 percent and as a result the quantity of tickets demanded increases by 10 percent. This set of results shows that San Francisco 49ers tickets have

an inelastic demand.

a unit elastic demand.

an inelastic supply.

an elastic supply.

an elastic demand.

Question 3

In the above figure, an increase in cost of the cheese used to produce pizza

has no effect.

results in a movement from point b to point a.

shifts the supply curve from S to S2.

shifts the supply curve from S to S1.

results in a movement from point a to point b.

Question 4

Suppose improvements in technology cause the supply of natural gas to increase and at the same time the demand for natural gas increases. What are we sure of?

Equilibrium price decreases.

Both equilibrium price and quantity increase.

Equilibrium quantity decreases.

Equilibrium price increases.

Equilibrium quantity increases.

Question 5

If income increases and the demand for bus rides decreases,

consumers are behaving irrationally.

bus rides are an inferior good.

bus rides are a substitute good.

bus rides must be a complement good with some other good.

bus rides are a normal good.

ECON312N Principles of Economics

Week 3 Homework

Question 1

GM cuts jobs at its Australian manufacturing unit

GM will cut 500 jobs, or about 12% of its workforce, at its Australian plant because of a sharp fall in demand for its locally-made “Cruze” small car.

Source: The Wall Street Journal , April 8, 2013

As GM cuts its workforce, how will the marginal product and average product of a worker change in the short run?

Suppose that before the cuts the marginal product of GM workers is below their average product.

________________________

As the number of workers decreases, the marginal product of a GM worker ______ and the average product of a GM worker ______ in the short run.

?decreases; decreases

?increases; increases

?decreases; increases

?increases; decreases

does not? change; does not change

Question 2

Maryland farmers turn from tobacco to flowers

Maryland tobacco farmers will be subsidized if they switch from growing tobacco to growing crops such as flowers and organic vegetables.

Source: The New York Times ,February 25, 2001

How does offering farmers a payment to exit tobacco growing influence the opportunity cost of growing tobacco?

What is the opportunity cost of using the equipment owned by a tobacco farmer?

______________________

Offering farmers a payment to exit tobacco growing _______ the opportunity cost of growing tobacco.

The opportunity cost of using the equipment owned by a tobacco farmer is _______.

?decreases; the sum of the implicit and explicit costs of using the tobacco equipment

?increases; the next best alternative? forgone, which could be the production of flowers and organic vegetables

?decreases; the explicit cost of using the tobacco equipment

does not? change; the next best alternative? forgone, which could be the production of flowers and organic vegetables

?increases; the implicit cost of using the tobacco equipment

Question 3

Perfect competition is characterized by all of the following EXCEPT

considerable advertising by individual firms.

firms produce an identical product.

a large number of buyers and sellers.

buyers and sellers are well informed about prices.

no restrictions on entry into or exit from the industry.

Question 4

As a typical firm increases its output, its marginal cost

is negative at first and then positive.

is constant.

decreases.

increases at first and then decreases.

decreases at first and then increases.

Question 5

Coffee king Starbucks raises its prices

Starbucks will raise its price because the wholesale price of milk has risen by nearly 70% in the past year. There’s a lot of milk in those Starbucks lattes, noted John Glass, CIBC World Markets restaurant analyst.

Source: USA Today, July 24, 2007

Is the cost of milk a fixed cost or a variable cost?

Describe how the increase in the price of milk changes Starbucks’ short-run cost curves.

____________________

The cost of milk is a ______ cost. An increase in the cost of milk shifts the ______ curves upward.

??variable; average total? cost, average variable? cost, total? cost, total variable? cost, and marginal cost

??fixed; average total? cost, average fixed? cost, total? cost, and total fixed cost

??variable; total? cost, total variable? cost, and total fixed cost

??fixed; total cost and average total cost

ECON312N Principles of Economics

Week 4 Homework

Question 1

Consider the market for running shoes shown above. Before a tariff is imposed, if the United States trades with the world, then the United States produces ________ running shoes at a price of ________.

5 million; $40

3 million; $80

5 million; $80

3 million; $40

1 million; $40

Question 2

Which of the following is NOT a characteristic of monopolistic competition?

few firms compete

easy entry and exit

small market share

no barriers to entry or exit

differentiated product

Question 3

According to the above table, the country will import the good if the world price is less than ________ and will export the good if the world price is more than ________.

$4; $4

$4; $8

$10; $10

$6; $6

$8; $4

Question 4

What is the Herfindahl-Hirschman Index if the four firms in an industry account have market shares of 62 percent, 15 percent, 15 percent, and 8 percent?

100

4,358

6,200

2,822

111,600

Question 5

During the 1980s, Harley-Davidson, the American motorcycle maker, asked Congress for tariff protection from large motorcycles imported from Japan. Harley-Davidson argued that their company needed protection so the company could reorganize and, after some time had passed, could become more competitive. Harley-Davidson’s argument is similar to the ________ argument for protection.

anti-dumping

save domestic jobs

infant-industry

bring diversity and stability

national security

ECON312N Principles of Economics

Week 5 Homework

Question 1

U.S. real GDP

is not as accurate as nominal GDP when measuring standard of living changes over time.

excludes the value of underground production and leisure time.

measures the change in the price level over time.

precisely measures the improving standard of living in the United States.

includes the value of underground production but excludes the value of leisure time.

Question 2U.S. unemployment rate lowest since 2008

The Labor Department said that the economy added 146,000 jobs in November, and the unemployment rate fell to 7.7% from 7.9% in October. But it fell mainly because workers dropped out of the labor force.

Source: CNN Money, December 7, 2012

Explain why workers dropping out of the labor force lowers the unemployment rate and why by more than new jobs do.

____________________

When workers drop out of the labor force, the unemployment rate falls because _______.

the ratio of the number employed to the number unemployed increases

the percentage change in the number unemployed is less than the percentage change in the labor force

the percentage change in the number unemployed equals the percentage change in the labor force

the percentage change in the number unemployed is greater than the percentage change in the labor force

Question 3

A standard definition of recession is

an increase in unemployment from one month to the next.

a decrease in real GDP for at least two successive quarters.

a period of time when the unemployment rate exceeds 6.5 percent.

an increase in GDP that lasts for at least 6 months.

a period of expansion in many sectors of the economy.

Question 4

Based on the figure above, in which quarter or quarters did a peak occur?

in 2014, 2nd quarter

in 2013, 2nd quarter

between 2012, 2nd quarter to 2013, 2nd quarter and also between 2014, 2nd quarter to the end of the figure

There are no peaks illustrated in the figure.

between 2013, 2nd quarter to 2014, 2nd quarter

Question 5

Which of the following people would be considered unemployed?

Sam, a part-time worker who wishes to work full time

Shirley, who is working but expects to be laid off at the end of the month

Victoria, who does not have a job and has been actively searching for work, but turned down a job paying less than she desired

Bobby, a full-time student in his last term before he graduates and who has not yet started to look for a job

Pat, who gave up looking for a job because he was discouraged about his job prospects

ECON312N Principles of Economics

Week 6 Homework

Question 1

All of the following can create a bias in the CPI EXCEPT the

new goods bias.

commodity substitution bias.

outlet substitution bias.

GDP price index bias.

quality change bias.

Question 2

Demand-pull inflation is an inflation that starts because _____.

of labor productivity growth

real GDP increases

aggregate supply decreases

aggregate demand increases

Question 3

If firms’ expectations about the future become pessimistic so that they think future profits will be lower, then

aggregate demand increases and the AD curve shifts rightward.

the quantity of real GDP demanded decreases, and there is a movement up along the AD curve.

the aggregate demand curve does not shift, but potential GDP decreases.

the quantity of real GDP demanded increases, and there is a movement down along the AD curve.

aggregate demand decreases and the AD curve shifts leftward.

Question 4

The PCE price index is an average of the current prices of? _____ included in the consumption expenditure component of? GDP, expressed as a percentage of? _____ year prices.

capital? goods; base

labor and? capital; past

the goods and? services; base

food and? energy; current

Question 5

If the bank returns $1,060 on the $1,000 deposited for a year during which inflation was 4 percent, the real interest rate is

-2 percent.

6 percent.

16 percent.

2 percent.

10 percent

ECON312N Principles of Economics

Week 8 Homework

Question 1

When the government’s expenditures exceed its tax revenue, the budget

has a deficit and the national debt is decreasing.

None of the above because by law the government’s expenditures cannot exceed its tax revenue.

has a deficit and the national debt is increasing.

has a surplus and the national debt is increasing.

is balanced and the national debt is increasing.

Question 2

Using the data in the above table, if potential GDP for this economy is $25 billion, then in order to restore full employment, the federal funds rate can be

lowered so that consumption expenditure and investment increase, though net exports decrease.

raised so that net exports increase.

raised so that consumption expenditure, investment, and net exports increase.

lowered so that consumption expenditure, investment, and net exports increase.

lowered so that government expenditure on goods and services increase.

Question 3

The tax multiplier is the

magnification effect of a change in taxes on government expenditures.

magnification effect of a change in taxes on aggregate demand.

magnification effect of a change in taxes on aggregate supply.

magnification effect of a change in taxes on the budget deficit.

magnification effect of a change in taxes on the national debt.

Question 4

Control of monetary policy rests with

Congress.

the U.S. Treasury.

the Federal Reserve.

the Comptroller of the Currency.

the President.

Question 5

When the Fed ________ securities in an open market operation, banks’ reserves ________, and therefore lending ________.

buys; do not change; does not change

sells; increase; increases

sells; decrease; increases

buys; increase; increases

buys; decrease; decreases

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