Devry Eco312 final exam latest

| March 14, 2016

Q1: The table gives the demand schedule for peanuts.

When the price of peanuts falls from $1.20 to $ 0.80 a packet, what is the change in the total revenue ?

The change in total revenue is $ —

Over the price range of $0.80 and $1.20, the demand for peanuts is —–

Elastic

Inelastic

Unit elastic

Q2: The U.S. economy is at full employment.

Draw an aggregate demand curve that is consistent with this fact and label it AD0.

Draw a point at the equilibrim value of real GDP and the price level. Label it 1.

Draw a curve that shows the effect of an increase in the quantity of money on aggregate demand. Label it AD1.

Draw a point at the new equilibrium value of real GDP and the price level. Label it 2.

Q3: The table provides some data on real GDP and the population of Euronia in 2011 and 2012.

What is the economic growth rate in Euronia in 2012?

What is the growth rate of Euronia’s standard of living in 2012?

The economic growth rate in Euronia in 2012 is —- percent.

The growth rate of Euronia’s standard of living in 2012 is ___ percent.

Q4: Sara and Frank produce boards and sails for windsurfing. The tables show their production possibilities.

Each week, Sara produces 8 boards and 6 sails and Frank produces 9 boards and 12 sails. Sara and Frank decide to specialize and trade.-

_____ specializes in making boards and produces _____ . _______ specializes in making sails and produces______.

Sara; 20 boards; Frank; 30 sails

Sara; 16 boards; Frank; 30 sails

Frank; 16 boards; Sara; 30 sails

Frank; 20 boards; Sara; 30 sails

The number of boards produced _________by ____ . The number of sails produced __________ by ____.

If Sara and Frank specializes and trade 1 board for 1 sail, _______ gets boards from _________ for less than it costs ____ to provides them, and _________ gets sails from _________ for less than it costs _____ to produce them.

Q5: Kim hires students to paint houses at $450 per student per week. She leases equipment that costs $350 per week.

The table gives Kim’s total product schedule.

Suppose Kim paints 18 houses a week.

Calculate her total cost, average total cost, and marginal cost.

Total cost is $_____ a week when Kim paints 18 houses a week.

When Kim paints 18 houses a week, average total cost is $ _________ a house.

When Kim paints 18 houses a week, marginal cost is $______a house.

Q6: The figure shows the production possibilities frontier for Suzie’s squeeze, a smoothies producer.

Draw a point at which the firm achieves production efficiency. Label it Efficient.

Draw a point that is attainable but inefficient. Label it Inefficient.

When production is inefficient,________

There is a tradeoff between fruit drinks and veggie drinks

All resources are assigned to tasks for which they are the best match.

The firm can produce more veggie drinks only by producing fewer fruit drinks.

The firm can produce more veggie drinks without producing fewer fruit drinks.

Q7: A decrease in the federal funds rate

Lowers the exchange rate, increases the supply of loanable funds, and increases aggregate demand.

Decreases the supply of loanable funds, raises the real interest rate, and decreases aggregate demand.

Decreses the demand for loanable funds, lowers the real interest rate, and decreases aggregate demand.

Increases other short — term interest rates, decreases investment , and decreases aggregate demand.

Lowers other sort—- term interest rate, raises the real interest rate, and increases aggregate demand.

Q8: Big Top is the only circus in the nation.

The table sets out the demand schedule for circus tickets and the cost schedule for producing the circus.

Calculate Big Top’s profit-maximizing price, output and economic profit if it charges a single price for all tickets.

Big Top’s profit –maximizing output is ____ tickets a show.

Big Top’s profit-maximizing price is $_____ a ticket.

When Big Top produces the profit-maximizing output and charges the profit-maximizing price, economic profit is $_____.

Q9: The table shows the marginal benefit schedule from a college education.

The marginal cost of educating a college student is $3000 a year. The marginal external benefit from a college education is a constant $2000 per student per year.

There are no public colleges.

If the government offers vouchers to students, what is the value of the voucher that will encourage the efficient number of students to enroll ?

The value of the voucher is $_____ per student and ____ million students enroll.

Q10: In July 2013, M1 was $2,549 billion; M2 was $10,710 billion; checkable deposits owned by individuals and businesses were $1,414 billion; small time deposits were $556 billion; and money market funds and other deposits were $665 billion.

Calculate currency held by individuals and businesses and traveler’s checks in July 2013 and calculate savings deposits.

In July 2013, currency held by individuals and businesses and traveler’s checks were $______ billion.

Saving deposits in July 2013 were $______ billion.

Q11: The graph shows the market for computers.

If both the demand for computers and the supply of computers increases, then the equilibrium quantity _______ and the equilibrium price__________

Might increase, decrease, or not change: rises

Decreases: might rise, fall, or not change.

Increases: rises.

Increases: falls.

Increases, might rise, fall, or not change.

Now illustrate your answer to the question above

Draw a point at the market equilibrium. Label it 1.

Draw a curve to shows the effect in this market when the price of a printer falls. Label it.

Draw a curve to shows the effect of a technological advance that cuts the cost of producing computers. Label it.

Draw a point at the new market equilibrium. Label it 2

Q12: The graph shows the market for oranges.

The government introduces a price support for oranges and sets the support price at $4.00 a pound.

After the government introduces the price support, what is the quantity of oranges produced, the quantity of oranges demanded, and the surplus? What is the amount of the subsidy received by orange farmers?

The surplus is —- billion pounds.

The subsidy received by orange farmers is $___ billion.

Q13: The table shows the demand and supply schedules for pretzels.

The number of pretzel production lines increases and the quantity supplied changes by 500 bags at each price.

At the same time, people serve more pretzels at parties and the quantity of pretzels demanded changes by 1500 bags at each price.

What is the new equilibrium in the market for pretzels?

The new equilibrium price is $_____ a bag and the new equilibrium quantity is _______ bags a day.

Q14: Miguel installs home security systems.

His fixed costs are $400 a month and it costs him $24 of labor to install one system.

The table shows the demand schedule for Miguel’s installation services.

Calculate Miguel’s profit-maximizing output, price, and economic profit.

Miguel’s profit-maximizing output is ____ installations a month.

Miguel’s profit-maximizing price is $____ an installation.

Q15: The graph shows the demand curve for sleeping bags and the market price of a sleeping bag.

Draw a point that shows the value of the 60th sleeping bag. Label it 1.

Draw a point that shows the willingness to pay for the 30th sleeping bag. Label it 2.

Draw an arrow to show the consumer surplus on the 30th sleeping bag. Label it CS.

The consumer surplus on the 30th sleeping bag is ___.

Q16: The table provides information about a flu vaccination program.

What number of shots per day would a private flu vaccination program provide? If the marginal external benefit from a flu vaccination is equivalent to $20, what is the efficient number of shots?

A private flu vaccination program would provide _______shots a day.

If the marginal external benefit from a flu vaccination is equivalent to $20, the efficient number of shots is _____a day.

Q17: Judy hires students in the summer to do housecleaning.

The table sets out Judy’s total product schedule.

What is the marginal product of the first student and the average product when Judy hires 1 student?

The marginal product of the first student is _____ houses a week.

The average product of 1 student is ___ houses a week.

Q18: The GDP price index in the United States in 2000 was about 90, and real GDP in 2000 was $11.0 trillion (2005 dollars).

The GDP price index in the United States in 2010 was about 108, and real GDP in 2010 was $13.1 trillion (2005 dollars).

Calculate nominal GDP in 2000 and in 2010 and the percentage increase in nominal GDP between 2000 and 2010.

Nominal GDP in 2000 is $____ trillion.

Nominal GDP in 2010 is $______trillion.

The percentage increase in the nominal GDP between 2000 and 2010 is _______percent.

Q19: When the price of a newspaper rises from $0.90 to $1.10a copy, the quantity demanded decreases from 51,500 to 48,500 subscribers.

The percentage changes in the price of a newspaper is _____ percent.

The percentage change in the quantity of newspapers demanded is ___percent.

The price elasticity of demand for newspaper is ____.

Q20: The GDP deflator in the United States in 2001 was 91, and real GDP in 2001 ( in 2005 dollars) was $11.1 trillion.

The GDP deflator in the United States in 2004 was 96, and real GDP in 2004 ( in 2005 dollars) was $12.111 trillion.

What was the percentage increase in production between 2001 and 2004, and by what percentage did the cost of living rise between 2001 and 2004?

The percentage increase in production between 2001 and 2004 is ____ percent.

The cost of living rose between 2001 and 2004 by _____ percent.

Q21: Canada reported that in May 2003, the Canadian labor force was 17.1 million, employment was 15.7 million, and the working age population was 25.1 million.

What was the Canadian unemployment rate and labor force participation rate in May 2003?

The Canadian unemployment rate in May 2003 was ______percent.

The Canadian labor force participation rate in May 2003 was ______percent.

Q22: The graph shows the market for posters in which the government has imposed a tax of $4 per poster.

Draw a point to show the price paid by buyer and the quantity bought.

Draw shapes that represent the following:

1) Consumer surplus. Label it CS

2) Producer surplus. Label it PS

3) The tax revenue received by the government. Label it TR.

4) The deadweight loss created by the tax. Label it DWL.

Q23: The table shows the demand and supply schedules for milk.

Now two changes occur in the market for milk.

A drought decreases the quantity supplied by 50 cartons a day at each price.

A news story on CNN that says:

Milk is good for your health, which increases the quantity demanded by 100 cartons a day at each price.

What is the new equilibrium in the milk market?

The new equilibrium price is $ _____ a carton and the new equilibrium quantity is _____cartons a day.

Q24 A farm grows soybean and produces chickens. The opportunity cost of producing each of these products increases as more of it is produced.

Draw the farm’s PPF. Label it PPF0

The farm adopts a new technology which allows it to use fewer resources to produce soybean.

Draw a PPF that illustrates the impact of the new technology. Label it PPF1.

With the new technology, the opportunity cost of producing a chicken _____ because _________ must be forgone to produce a chicken.

Increases; less soybean

Decreases; more soybean

Decreases; less soybean

Does not change; the same number of soybean

Increases ; more soybean

Q25: The table shows the marginal benefit and marginal cost of driving a private car central London in 2009.

In 2009, the congestion charge was set at $10per car per day.

How many cars a day entered London before the congestion charge was levied and how many entered after the congestion charge was levied?

What was the reduction in congestion and how much revenue did the congestion charge raise for the city?

Before the congestion charge was levied, 90000 cars a day entered London.

After the congestion charges was levied, 60000 cars a day entered London.

The reduction in congestion was 30000 cars a day.

The congestion charges raised$600000 a day.

Q26: The table shows the costs incurred at Pete’s potato farm.

Complete the table.

L TP TVC TC AFC AVC ATC MC

0 0 0 110 – – – –

1 28 45 155 3.93 1.61 5.54 1.61

2 84 90 200 1.31 1.07 2.38 0.80

3 132 135 245 0.83 1.02 1.85 1.12

4 172 180 290 0.64 10.5 1.9 1.12

Q27:The table provides somedata for an economy in 2012 and 2013.

Calculate the growth rate of labor productivity in 2013.

The growth rate of labor productivity in 2013 is ______ percent.

Q28: Fogg’s Adventure Holidays is a single-price monopoly.

The table shows the demand schedule for holidays (columns 1 and 2) and Fogg’s total cost schedule (columns 2 and 3).

Calculate Fogg’s total revenue and marginal revenue schedules and fill in the two right columns of the table.

Q29: The BLS survey reported the number in the table for a small community of 300 people.

Calculate the unemployment rate and the labor force participation rate in this community.

The unemployment rate is ____ percent.

The labor force participation rate is _____ percent.

Q30: Naomi’s Family Photos is a photographic portrait business in a perfectly competitive market in Duluth.

The market price of a portrait is $22.50.

The table shows Naomi’s total costs.

How many portraits does Naomi sell in an hour and what is Naomi’s economic profit in the short run?

Naomi’s Family Photo sells _____portraits an hour.

In the short run, Naomi’s _________________________ of $_____ an hour.

Q31: The table shows an economy’s total production and the prices of the final goods it produced in 2013 and 2014.

The base year is 2013.

Calculate the percentage change in production in 2014.

In 2014, production changed by ______percent.

Q32: Draw a relationship that illustrates the following facts:

1) Draw a point to show that if you study for zero hours a day (x=0) your grade point average (y) is 1.

2) Draw a curve to show that the more hours a day you study, the higher is your grade point average, but each extra hour brings a smaller and smaller increase in your grade. Label the curve GPA.

The curve you have drawn indicates a ____________ relationship.

Q33: The table shows some data for an island economy which produces only bus rides and hot chocolate.

The base year is 2012.

Calculate the value of 2013 production in 2012 prices and the percentage increase in production when valued at 2012 prices.

The value of 2013 production in 2012 prices: $_________

The percentage increase in production when valued at 2012 prices is _______percent.

Q34: The graph shows the demand curve for sleeping bags and the market price of a sleeping bag.

Draw a point to show the quantity of sleeping bags bought and the price paid.

Draw a shape that represents the consumer surplus from the sleeping bags bought. Label it.

Draw a shape that represents the amount paid for the sleeping bags bought. Label it.

The consumer surplus equals $ ________

The total amount paid for the quantity bought is $__________

The total benefit from the sleeping bags bought is $_________

Q35: At zero distance sprinted, your recovery time is zero.

As you sprint further (x), your recovery time (y) increases at an increasing rate.

Draw this relationship. Label it R.

Q36: The graph shows an economy’s aggregate demand curve.

Draw a curve to show the effect on aggregate demand today of an increase in expected future income. Label it.

An increase in expected future income_____________ aggregate demand today; an increase in the expected future inflation rate _________ aggregate demand today; and an increase in expected future profit _________aggregate demand today.

Q37: Yolanda runs a worm farm in Lakewood, Washington.

The table shows part of Yolanda’s total product schedule.

Construct Yolanda’s marginal product and average product schedules. Fill in the columns of the table.

Yolanda’s marginal returns increase for________

The third worker only

All workers

No workers

The first worker only

The second and third workers

Q38: The table gives some data on the supply of roses in a small town.

When the price rises from $17 a bouquet to $23 a bouquet, the elasticity of supply is ________.

0.67

0.33

3.00

1.50

Q39: The graph shows the demand curve, marginal revenue curve, and marginal cost curve of Lite and Kool, Inc., a producer of running shoes in monopolistic competition.

Draw a point at the firm’s the profit-maximizing price and quantity. Label it 1.

Draw an arrow that shows Lite and Kool’s markup.

Draw the average total cost curve such that Lite and Kool does not have excess capacity. Label it.

Draw a point at the intersection of the ATC curve and the MC curve. Label it 2.

Lite and Kool’s markup is $______ a pair.

Q40:

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