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ECON 545 Business Economics Complete Course (Spring-2016)
Week 1
Week 1 DQ 1Supply and Demand Elasticity (Graded)Below is a recommended topic for this discussion. If your instructor chooses a different “Making theConnection” from this weeks’ readings or another alternate discussion topic, his or her chosen topic and anyrequired work in My Econ Lab or elsewhere will be in the instructors’ first posting.Read the Making the Connection short case titled Forecasting the Demand for iPhones in Chapter 3 ofour textbook, and also be sure to watch the video right under the Making the Connection title (maybea few times). Then post your first posting this week beginning to discuss what you’ve read andwatched in the video.Then work on Problems and Applications 1.17, at the end of Chapter 3, answering and discussing thequestions in that exercise.Week 1 DQ 2: Supply and Demand and Elasticity – DiscussionElasticity and the Minimum Wage (Graded)Below is a recommendedtopic for this discussion. If your instructor chooses a different “Making the Connection” from this weeks’ readings or anotheralternate discussiontopic, his or her chosen topic and any required work in MyEconLab or elsewhere will be in the instructors’ first posting.Read the Making the Connection short case titled Why Are Oil Prices So Unstablein Chapter 6 of our textbook, and also be sure to watch the video right underthe Making the Connection title (maybe a few times). Then post your first posting this week beginning to discuss what you’ve read and watched in the video.Then work on Problems and Applications 6.3,at the end of Chapter 6, answering and discussing the questions in that exercise. You don’t have to post a graph,but please at least create one on paper and discuss the results.
Week 2
Week 2 DQ 1:Perfect Competition (Graded)Below is a recommended topic for this discussion. If your instructor chooses a different “Making theConnection” from this weeks’ readings or another alternate discussion topic, his or her chosen topic and anyrequired work in MyEconLab or elsewhere will be in the instructors’ first posting.Read the Making the Connection short case titled In the Apple iPhone Apps Store, Easy EntryMakes the Long Run Pretty Shortin Chapter 12 of our textbook, and also be sure to watch thevideo right under the Making the Connection title (maybe a few times). Then post your first postingthis week beginning to discuss what you’ve read and watched in the video.Then work on Problems and Applications 5.9,at the end of Chapter 12, answering and discussingthe questions in that exercise.Week 2 DQ 2 Costs (Graded)Below is a recommendedtopic for this discussion. If your instructor chooses a different “Making theConnection” from this weeks’ readings or another alternate discussion topic, his or her chosen topic and anyrequired work in MyEconLab or elsewhere will be in the instructors’ first posting.Read the Making the Connection short case titled Adam Smith’s Famous Account of the Divisionof Labor in a Pin Factoryin Chapter 11 of our textbook, and also be sure to watch the video rightunder the Making the Connection title (maybe a few times). Then post your first posting this weekbeginning to discuss what you’ve read and watched in the video.Then work on Problems and Applications 3.7,at the end of Chapter 11, answering and discussingthe question in that exercise.
Week 3
ECON 545 Week 3 Course Project 1, Microeconomics Analysis
ECON 545 Week 3 DQ 1 : Oligopoly and Game Theory (Graded)Below is a recommendedtopic for this discussion. If your instructor chooses a different “Making theConnection” from this weeks’ readings or another alternate discussion topic, his or her chosen topic and anyrequired work in MyEconLab or elsewhere will be in the instructors’ first posting.Read the Making the Connection short case titled With Price Collusion, More is Not MerrierinChapter 14 of our textbook, and also be sure to watch the video right under the Making theConnection title (maybe a few times). Then post your first posting this week beginning to discusswhat you’ve read and watched in the video.Then work on Problems and Applications 2.15,at the end of chapter 14, answering and discussingthe questions in that exercise.ECON 545 Week 3 DQ 2 : Antitrust and Market Power (Graded)Below is a recommended topic for this discussion. If your instructor chooses a “Making the Connection” from This weeks’ readings or another alternate discussion topic, his or her chosen topic and any required work inMy Econ Lab or elsewhere will be in the instructors’ first posting.Review and chose a firm of your choice or one provided by your instructor. Is this firm a monopoly? InWhat ways could it be considered a monopoly? What markets are involved? What antitrust legislationWould apply? Is antitrust legislation fair to your chosen firm?
Week 3 Quiz
Version 1
1. Question: (TCO A) There is an increase in the cost of labor for producing bicycles. (4 pts.)………What happens to bicycle supply? (6 pts.) What happens to bicycle demand? (Points : 10)
2. Question: (TCO A) Ceteris paribus, Brand A Plain potato chips and Brand B Plain potato chips are substitutes in consumption. The price of Brand A Plain potato chips increases. (4 pts.)……………. a. What happens to the demand for Brand B Plain potato chips? (6 pts.) b. What happens to the demand for Brand A Plain potato chips? (Points : 10)
3. Question: (TCO A) The number of new home sellers in a given market decreases………..(4 pts.) What happens to the supply of new homes?
(6 pts.) What happens to the demand for new homes? (Points : 10) 4 Question: (TCO A) A market is in equilibrium with equilibrium quantity MEQ and equilibrium price MEP.(2 pts.) a. What happens to Market Equilibrium Quantity (MEQ) if there is an increase in supply? (4 pts.) b. What happens to Marlet Equilibrium Price (MEP) if there is a decrease in supply and a decrease in demand? (4 pts.) c. What happens to MEP if there is an increase in demand followed by a decrease in supply followed by another increase in demand? (Points : 10)
5. Question: The following table shows part of the demand function for tickets to an outdoor summer concert by a popular singing group:
Price (P)…Quantity (Q)…………………..a. (2 pts.) What is demand elasticity in the $35 – $50 price range? Is demand elastic, inelastic, or of unitary elasticity? Calculate the value and show all of your work. Be sure to use the midpoint equation to determine elasticity. b. (4 pts.) Assume demand elasticity is 1.0 in the $20 – $35 price range. In this range of demand, by what percentage would quantity demanded change if price decreases by 5 percent? Show your detailed calculations
c. (4 pts.) What is the effect of a price increase from $10 to $20 on total revenue for the event? Does total revenue (TR) increase, decrease, or remain the same? By how much? Show your detailed calculations. (Points : 10)
6. Question: (TCO B) For a given labor supply, would the potential unemployment impact of an increase in the minimum wage be greater in the case of elastic or inelastic demand for labor? Explain why, using hypothetical numbers to illustrate your case. (Points : 10)
7. Question: TCO C) You have been hired to manage a small manufacturing facility whose cost and production data are given in the table below…………….
(2 points) What is the marginal product of the sixth worker?
(2 points) What is the marginal revenue product of the second worker?
(2 points) What is the marginal cost of the fourth worker?
(4 points) Based on your knowledge of marginal analysis, how many workers should you hire? Explain you answer. (Points : 10)
8. Question: (TCO C) Answer the next question on the basis of the following cost data for a purely competitive seller:………………………….
Refer to the above data. If the product price is $75 at its optimal output, exactly how many units should be produced to maximize profits or minimize losses? How much will the profit or loss be? Show all calculations. (Points : 10)
9. Question: (TCO C) Answer the next question on the basis of the following cost data for a purely competitive seller:…………………………..
Refer to the above data. If the product price is $175 at its optimal output, exactly how many units should be produced to maximize profits or minimize losses? How much will the profit or loss be? Show all calculations. (Points : 10)
10. Question: TCO C) A firm has Total Costs (TC) of $12,000 over the next three months (TOTAL for the 3 months – not per month), of which $6,000 are fixed costs (TFC) for rent on its lease that cannot be broken. If it stays in business over those months, then the firm will collect only $4,000 in revenues (TR). So, considering only this information, should they stay in business for those three months or should they close down right now? Provide your reasoning. (Points : 10)
Version 2
1. Question: (TCO A) There is a decrease in the cost of labor for producing bicycles.
(4 pts.) What happens to bicycle supply?
(6 pts.) What happens to bicycle demand?
2. Question: (TCO A) Ceteris paribus, Diet Cola Brand X and Diet Cola Brand Y are substitutes in consumption. The price of Diet Cola Brand Y falls.
(4 pts.) a. What happens to the demand for Diet Cola Brand X?
(6 pts.) b. What happens to the demand for Diet Cola Brand Y? (Points : 10)
3. Question: (TCO A) The number of new home sellers in a given market decreases.
(4 pts.) What happens to the supply of new homes?
(6 pts.) What happens to the demand for new homes?
4. Question: (TCO A) A market is in equilibrium with equilibrium Quantity of MEQ and equilibrium Price of MEP.
(2 pts.) a. What happens to market equilibrium Price (MEP) if there is an increase in Demand?
(4 pts.) b. What happens to market equilibrium Quantity (MEQ) if Supply decreases as Demand increase?
(4 pts.) c. What happens to market equilibrium Price if there is an increase in Supply followed by a decrease in Demand which if followed by another increase in Supply?
5. Question: The following table shows part of the demand function for tickets to an outdoor summer concert by a popular singing group:
6. Question: (TCO B) Use a hypothetical example to illustrate whether you agree or disagree with the following statement: “Unemployment will go up more if the demand for labor is inelastic because the demand for labor will decrease more when you have inelastic demand than if demand were elastic.” Explain why, using hypothetical numbers to illustrate your case.
7. Question: (7. TCO C) You have been hired to manage a small manufacturing facility whose cost and production data are given in the table below.
(2 points) What is the marginal product of the fourth worker?
(2 points) What is the marginal revenue product of the fifth worker?
(2 points) What is the marginal cost of the second worker?
(4 points) Based on your knowledge of marginal analysis, how many workers should you hire? Explain you answer. (Points : 10)
8. Question: (TCO C) Answer the next question on the basis of the following cost data for a purely competitive seller:Refer to the above data. If the product price is $75 at its optimal output, exactly how many units should be produced to maximize profits or minimize losses? How much will the profit or loss be? Show all calculations. (Points : 10)
9. Question: (TCO C) (TCO C) Answer the next question on the basis of the following cost data for a purely competitive seller:………………Refer to the above data. If the product price is $165 at its optimal output, exactly how many units should be produced to maximize profits or minimize losses? How much will the profit or loss be? Show all calculations. (Points : 10)
10. Question: (TCO C) A firm has Total Costs (TC) of $10,000 over the next three months (TOTAL for the 3 months – not per month), of which $6,000 are fixed costs (TFC) for rent on its lease that cannot be broken. If it stays in business over those months, then the firm will collect only $5,000 in revenues (TR). So, considering only this information, should they stay in business for those three months or should they close down right now? Provide your reasoning.
1. Question: (TCO A) There is an increase in the cost of labor for producing bicycles. (4 pts.)………What happens to bicycle supply? (6 pts.) What happens to bicycle demand? (Points : 10)
2. Question: (TCO A) Ceteris paribus, Brand A Plain potato chips and Brand B Plain potato chips are substitutes in consumption. The price of Brand A Plain potato chips increases. (4 pts.)……………. a. What happens to the demand for Brand B Plain potato chips? (6 pts.) b. What happens to the demand for Brand A Plain potato chips? (Points : 10)
3. Question: (TCO A) The number of new home sellers in a given market decreases………..(4 pts.) What happens to the supply of new homes?
(6 pts.) What happens to the demand for new homes? (Points : 10) 4 Question: (TCO A) A market is in equilibrium with equilibrium quantity MEQ and equilibrium price MEP.(2 pts.) a. What happens to Market Equilibrium Quantity (MEQ) if there is an increase in supply? (4 pts.) b. What happens to Marlet Equilibrium Price (MEP) if there is a decrease in supply and a decrease in demand? (4 pts.) c. What happens to MEP if there is an increase in demand followed by a decrease in supply followed by another increase in demand? (Points : 10)
5. Question: The following table shows part of the demand function for tickets to an outdoor summer concert by a popular singing group:
Price (P)…Quantity (Q)…………………..a. (2 pts.) What is demand elasticity in the $35 – $50 price range? Is demand elastic, inelastic, or of unitary elasticity? Calculate the value and show all of your work. Be sure to use the midpoint equation to determine elasticity. b. (4 pts.) Assume demand elasticity is 1.0 in the $20 – $35 price range. In this range of demand, by what percentage would quantity demanded change if price decreases by 5 percent? Show your detailed calculations
c. (4 pts.) What is the effect of a price increase from $10 to $20 on total revenue for the event? Does total revenue (TR) increase, decrease, or remain the same? By how much? Show your detailed calculations. (Points : 10)
6. Question: (TCO B) For a given labor supply, would the potential unemployment impact of an increase in the minimum wage be greater in the case of elastic or inelastic demand for labor? Explain why, using hypothetical numbers to illustrate your case. (Points : 10)
7. Question: TCO C) You have been hired to manage a small manufacturing facility whose cost and production data are given in the table below…………….
(2 points) What is the marginal product of the sixth worker?
(2 points) What is the marginal revenue product of the second worker?
(2 points) What is the marginal cost of the fourth worker?
(4 points) Based on your knowledge of marginal analysis, how many workers should you hire? Explain you answer. (Points : 10)
8. Question: (TCO C) Answer the next question on the basis of the following cost data for a purely competitive seller:………………………….
Refer to the above data. If the product price is $75 at its optimal output, exactly how many units should be produced to maximize profits or minimize losses? How much will the profit or loss be? Show all calculations. (Points : 10)
9. Question: (TCO C) Answer the next question on the basis of the following cost data for a purely competitive seller:…………………………..
Refer to the above data. If the product price is $175 at its optimal output, exactly how many units should be produced to maximize profits or minimize losses? How much will the profit or loss be? Show all calculations. (Points : 10)
10. Question: TCO C) A firm has Total Costs (TC) of $12,000 over the next three months (TOTAL for the 3 months – not per month), of which $6,000 are fixed costs (TFC) for rent on its lease that cannot be broken. If it stays in business over those months, then the firm will collect only $4,000 in revenues (TR). So, considering only this information, should they stay in business for those three months or should they close down right now? Provide your reasoning. (Points : 10)
Version 2
1. Question: (TCO A) There is a decrease in the cost of labor for producing bicycles.
(4 pts.) What happens to bicycle supply?
(6 pts.) What happens to bicycle demand?
2. Question: (TCO A) Ceteris paribus, Diet Cola Brand X and Diet Cola Brand Y are substitutes in consumption. The price of Diet Cola Brand Y falls.
(4 pts.) a. What happens to the demand for Diet Cola Brand X?
(6 pts.) b. What happens to the demand for Diet Cola Brand Y? (Points : 10)
3. Question: (TCO A) The number of new home sellers in a given market decreases.
(4 pts.) What happens to the supply of new homes?
(6 pts.) What happens to the demand for new homes?
4. Question: (TCO A) A market is in equilibrium with equilibrium Quantity of MEQ and equilibrium Price of MEP.
(2 pts.) a. What happens to market equilibrium Price (MEP) if there is an increase in Demand?
(4 pts.) b. What happens to market equilibrium Quantity (MEQ) if Supply decreases as Demand increase?
(4 pts.) c. What happens to market equilibrium Price if there is an increase in Supply followed by a decrease in Demand which if followed by another increase in Supply?
5. Question: The following table shows part of the demand function for tickets to an outdoor summer concert by a popular singing group:
6. Question: (TCO B) Use a hypothetical example to illustrate whether you agree or disagree with the following statement: “Unemployment will go up more if the demand for labor is inelastic because the demand for labor will decrease more when you have inelastic demand than if demand were elastic.” Explain why, using hypothetical numbers to illustrate your case.
7. Question: (7. TCO C) You have been hired to manage a small manufacturing facility whose cost and production data are given in the table below.
(2 points) What is the marginal product of the fourth worker?
(2 points) What is the marginal revenue product of the fifth worker?
(2 points) What is the marginal cost of the second worker?
(4 points) Based on your knowledge of marginal analysis, how many workers should you hire? Explain you answer. (Points : 10)
8. Question: (TCO C) Answer the next question on the basis of the following cost data for a purely competitive seller:Refer to the above data. If the product price is $75 at its optimal output, exactly how many units should be produced to maximize profits or minimize losses? How much will the profit or loss be? Show all calculations. (Points : 10)
9. Question: (TCO C) (TCO C) Answer the next question on the basis of the following cost data for a purely competitive seller:………………Refer to the above data. If the product price is $165 at its optimal output, exactly how many units should be produced to maximize profits or minimize losses? How much will the profit or loss be? Show all calculations. (Points : 10)
10. Question: (TCO C) A firm has Total Costs (TC) of $10,000 over the next three months (TOTAL for the 3 months – not per month), of which $6,000 are fixed costs (TFC) for rent on its lease that cannot be broken. If it stays in business over those months, then the firm will collect only $5,000 in revenues (TR). So, considering only this information, should they stay in business for those three months or should they close down right now? Provide your reasoning.
Week 4
ECON 545 Week 4 DQ 1 : Unemployment and Inflation (Graded)Below is a recommendedtopic for this discussion. If your instructor chooses a different “Making theConnection” from this weeks’ readings or another alternate discussion topic, his or her chosen topic and anyrequired work in MyEconLab or elsewhere willbe in the instructors’ first posting.Read the “Making the Connection” short case titled “What’s So Bad about Falling Prices?”inChapter 20 of our textbook, and also be sure to watch the video right under the Making the Connectiontitle (maybe a few times). Then postyour first posting this week beginning to discuss what you’ve readand watched in the video.Then work on Problems and Applications 7.9,at the end of Chapter 20, answering and discussingthe questions in that exercise.ECON 545 Week 4 DQ 2 : Business Cycles (Graded)Below is a recommendedtopic for this discussion. If your instructor chooses a different “Making the Connection”from this weeks’ readings or another alternate discussion topic, his or her chosen topic and any required work inMyEconLab or elsewhere will be inthe instructors’ first posting.Read the Making the Connection short case titled Can a Recession Be a Good Time for a Business toExpand?in Chapter 21 of our textbook, and also be sureto watch the video right under the Making theConnection title (maybe a few times). Then post yourposting this week beginning to discuss what you’veread and watched in the video.Then work on Problems and Applications 3.6,at the end of Chapter 21, answering and discussing thequestions in that exercise.
Week 5
ECON 545 Week 5 DQ 1 Fiscal Policy (Graded)
Below is a recommendedtopic for this discussion. If your instructor chooses a different “Making the
Connection” from this weeks’ readings or another alternate discussion topic, his or her chosen topic and any
required work in MyEconLab or elsewhere willbe in the instructors’ first posting.
Read the Making the Connection short case titled Did Fiscal Policy Fail during the Great
Depression?in Chapter 27 of our textbook, and also be sure to watch the video right under the
Making the Connection title (maybe a few times). Thenpost your first posting this week beginning to
discuss what you’ve read and watched in the video.
Then work on Problems and Applications 6.6,at the end of Chapter 27,answering and discussing
the questions in that exercise.ECON 545 Week 5 DQ 2 Monetary Policy (Graded)Below is a recommendedtopic for this discussion. If your instructor chooses a different “Making the Connection”from this weeks’ readings or another alternate discussion topic, his or her chosen topic and any required workin MyEconLab or elsewhere will be inthe instructors’ first posting.Read the Making the Connection short case titled Trying to Hit a Moving Target: Making Policy withReal-Time Datain Chapter 26 of our textbook, and also be sure to watch the video right under theMaking the Connection title (maybe a few times). Then post your first posting this week beginning todiscuss what you’ve read and watched in the video.Then work on Problems and Applications 3.12,at the end of Chapter 26, answering and discussingthe questions in that exercise.
Below is a recommendedtopic for this discussion. If your instructor chooses a different “Making the
Connection” from this weeks’ readings or another alternate discussion topic, his or her chosen topic and any
required work in MyEconLab or elsewhere willbe in the instructors’ first posting.
Read the Making the Connection short case titled Did Fiscal Policy Fail during the Great
Depression?in Chapter 27 of our textbook, and also be sure to watch the video right under the
Making the Connection title (maybe a few times). Thenpost your first posting this week beginning to
discuss what you’ve read and watched in the video.
Then work on Problems and Applications 6.6,at the end of Chapter 27,answering and discussing
the questions in that exercise.
Week 6
ECON 545 Week 6 Course Project, Macroeconomics Analysis
ECON 545 Week 6 DQ 1 : Federal Reserve Policy (Graded)Below is a recommendedtopic for this discussion. If your instructor chooses a different “Making theConnection” from this weeks’ readings or another alternate discussion topic, his or her chosen topic and anyrequired work in MyEconLab or elsewhere will be in the instructors’ first posting.Read the Making the Connection short case titled The Debate over Quantitative Easing?inChapter 28 of our textbook, and also be sure to watch the video right under the Making theConnection title (maybe a few times). Then post your first posting this week beginning to discusswhat you’ve read and watched in the video.Then work on Problems and Applications 4.10,at the end of Chapter 28, answering anddiscussing the questions in that exercise.ECON 545 Week 6 DQ 2, Macro in an Open Economy (Graded)
Below is a recommendedtopic for this discussion. If your instructor chooses a different “Making the
Connection” from this weeks’ readings or another alternate discussion topic, his or her chosen topic and any
required work in MyEconLab or elsewhere will be in the instructors’ first posting.
Read the Making the Connection short case titled Japanese Firms Ride the Yen Roller Coasterin
Chapter 29 of our textbook, and also be sure to watch the video right under the Making the
Connection title (maybe a few times). Then post your first posting this week beginning to discuss
what you’ve read and watched in the video.
Then work on Problems and Applications 2.15,at the end of Chapter 29, answering and
discussing the questions in that exercise.
Below is a recommendedtopic for this discussion. If your instructor chooses a different “Making the
Connection” from this weeks’ readings or another alternate discussion topic, his or her chosen topic and any
required work in MyEconLab or elsewhere will be in the instructors’ first posting.
Read the Making the Connection short case titled Japanese Firms Ride the Yen Roller Coasterin
Chapter 29 of our textbook, and also be sure to watch the video right under the Making the
Connection title (maybe a few times). Then post your first posting this week beginning to discuss
what you’ve read and watched in the video.
Then work on Problems and Applications 2.15,at the end of Chapter 29, answering and
discussing the questions in that exercise.
Week 6 Quiz
Version 1
1. Question: (TCO F) The size of the labor force in a community is 800, and 720 of these folks are gainfully employed. In this community, 200 people over the age of 16 do not have a job, and are not looking for work. In addition, 100 people in the community are under the age of 16. The unemployment rate is:
2. Question: (TCO F) Suppose nominal GDP in 2005 was $14 trillion, and in 2006 it was $15 trillion. The general price index in 2005 was 100, and in 2006 it was 103. Between 2005 and 2006, real GDP rose by what percent? (Points : 20)
3. Question: (TCO F) The consumer price index was 185.2 in January of 2004, and it was 190.7 in January of 2005. Therefore, the rate of inflation in 2004 was about ______. (Points : 15)
4. Question: (TCO E) (10 points) As the Euro appreciates in value relative to the U.S. dollar, what happens to the price of U.S. goods in Europe? What happens to the price of European goods in the U.S.?
(10 points) Why would a country (for example, China) choose to keep their currency relatively pegged to the U.S. dollar? If the U.S. dollar were to appreciate considerably against most currencies, what would be the effect on Chinese exports to countries other than the United States? (Points : 20)
5. Question: (TCO E) Suppose the Indian rupee price of one British pound is 54.392 rupees for each pound. A hotel room in London costs 120 pounds, while a similar hotel room in New Delhi costs 6,500 Indian rupees. In which city is the hotel room cheaper, and by how much? (Points : 15)
6. Question: (TCO E) Answer the next question on the basis of the following production possibilities data for Landia and Scandia:………….Refer to the above data. What would be feasible terms of trade between Landia and Scandia? (Points : 20)
7. Question: (TCO E) Answer the next question on the basis of the following production possibilities data for Landia and Scandia:………………..Refer to the above data. What would be feasible terms of trade between Landia and Scandia?
8. Question: (TCO F) Country A produces two goods, elephants and saddles. In the year 2006, the 100 units of elephants produced sold for $2,500 per unit and the 30 units of saddles produced sold for $200 per unit. In 2007, the 120 units of elephants produced sold for $3,000 per unit, and the 50 units of saddles produced sold for $300 per unit. Real GDP for 2007, assuming that 2006 is the base year, is ______. (Points : 15)
9. Question: (TCO E) A Honda Accord sells for $24,000 in the United States and for SF29,500 in Switzerland. Given an exchange rate of SF1.25 = $1, how do the car prices of both countries compare? (Points : 15)Version 2
1. Question: (TCO F) The size of the labor force in a community is 1,000, and 850 of these folks are gainfully employed. In this community, 50 people over the age of 16 do not have a job and are not looking for work. In addition, 80 people in the community are under the age of 16. The unemployment rate is ______. (Points : 15)
2. Question: TCO F) Suppose nominal GDP in 2005 was $11 trillion, and in 2006 it was $14 trillion. The general price index in 2005 was 100, and in 2006 it was 102. Between 2005 and 2006, real GDP rose by what percent? (Points : 20)
3. Question: (TCO F) The consumer price index was 190.7 in January of 2005, and it was 198.3 in January of 2006. Therefore, the rate of inflation in 2005 was about ______. (Points : 15)
4. Question: (TCO E) (10 points) As the Euro appreciates in value relative to the U.S. dollar, what happens to the price of U.S. goods in Europe? What happens to the price of European goods in the U.S.?
(10 points) Why would a country (for example, China) choose to keep their currency relatively pegged to the U.S. dollar? If the U.S. dollar were to appreciate considerably against most currencies, what would be the effect on Chinese exports to countries other than the United States? (Points : 20)
5. Question: (TCO E) Suppose the Canadian dollar (C$) price of one British pound is C$2.12. A hotel room in London costs 120 pounds, while a similar hotel room in Toronto costs C$250. In which city is the hotel room cheaper, and by how much? (Points : 15)
6. Question: (TCO E) Answer the next question on the basis of the following production possibilities data for Egypt and Greece: Egypt production possibilities:…
Greece production possibilities:……………..Refer to the above data. What would be feasible terms of trade between Egypt and Greece? (Points : 20)
7. Question: (TCO F) The Republic of Republic produces two goods/services, fish (F) and chips (C). In 2006, the 1000 units of F produced sold for $8 per unit and the 5000 units of C produced sold for $1 per unit. In 2007, the 1500 units of F produced sold for $10 per unit, and the 6,000 units of C produced sold for $2 per unit. Calculate Real GDP for 2007, assuming that 2006 is the base year. (Points : 15)
8. Question: TCO F) Country A produces two goods, elephants and saddles. In the year 2006, the 100 units of elephants produced sold for $2,500 per unit and the 30 units of saddles produced sold for $200 per unit. In 2007, the 120 units of elephants produced sold for $3,000 per unit, and the 50 units of saddles produced sold for $300 per unit. Real GDP for 2007, assuming that 2006 is the base year, is ______. (Points : 15)
9. Question: (TCO E) A Honda Accord sells for $24,000 in the United States and for SF28,500 in Switzerland. Given an exchange rate of SF1.20 = $1, how do the car prices of both countries compare? (Points : 15)
1. Question: (TCO F) The size of the labor force in a community is 800, and 720 of these folks are gainfully employed. In this community, 200 people over the age of 16 do not have a job, and are not looking for work. In addition, 100 people in the community are under the age of 16. The unemployment rate is:
2. Question: (TCO F) Suppose nominal GDP in 2005 was $14 trillion, and in 2006 it was $15 trillion. The general price index in 2005 was 100, and in 2006 it was 103. Between 2005 and 2006, real GDP rose by what percent? (Points : 20)
3. Question: (TCO F) The consumer price index was 185.2 in January of 2004, and it was 190.7 in January of 2005. Therefore, the rate of inflation in 2004 was about ______. (Points : 15)
4. Question: (TCO E) (10 points) As the Euro appreciates in value relative to the U.S. dollar, what happens to the price of U.S. goods in Europe? What happens to the price of European goods in the U.S.?
(10 points) Why would a country (for example, China) choose to keep their currency relatively pegged to the U.S. dollar? If the U.S. dollar were to appreciate considerably against most currencies, what would be the effect on Chinese exports to countries other than the United States? (Points : 20)
5. Question: (TCO E) Suppose the Indian rupee price of one British pound is 54.392 rupees for each pound. A hotel room in London costs 120 pounds, while a similar hotel room in New Delhi costs 6,500 Indian rupees. In which city is the hotel room cheaper, and by how much? (Points : 15)
6. Question: (TCO E) Answer the next question on the basis of the following production possibilities data for Landia and Scandia:………….Refer to the above data. What would be feasible terms of trade between Landia and Scandia? (Points : 20)
7. Question: (TCO E) Answer the next question on the basis of the following production possibilities data for Landia and Scandia:………………..Refer to the above data. What would be feasible terms of trade between Landia and Scandia?
8. Question: (TCO F) Country A produces two goods, elephants and saddles. In the year 2006, the 100 units of elephants produced sold for $2,500 per unit and the 30 units of saddles produced sold for $200 per unit. In 2007, the 120 units of elephants produced sold for $3,000 per unit, and the 50 units of saddles produced sold for $300 per unit. Real GDP for 2007, assuming that 2006 is the base year, is ______. (Points : 15)
9. Question: (TCO E) A Honda Accord sells for $24,000 in the United States and for SF29,500 in Switzerland. Given an exchange rate of SF1.25 = $1, how do the car prices of both countries compare? (Points : 15)
1. Question: (TCO F) The size of the labor force in a community is 1,000, and 850 of these folks are gainfully employed. In this community, 50 people over the age of 16 do not have a job and are not looking for work. In addition, 80 people in the community are under the age of 16. The unemployment rate is ______. (Points : 15)
2. Question: TCO F) Suppose nominal GDP in 2005 was $11 trillion, and in 2006 it was $14 trillion. The general price index in 2005 was 100, and in 2006 it was 102. Between 2005 and 2006, real GDP rose by what percent? (Points : 20)
3. Question: (TCO F) The consumer price index was 190.7 in January of 2005, and it was 198.3 in January of 2006. Therefore, the rate of inflation in 2005 was about ______. (Points : 15)
4. Question: (TCO E) (10 points) As the Euro appreciates in value relative to the U.S. dollar, what happens to the price of U.S. goods in Europe? What happens to the price of European goods in the U.S.?
(10 points) Why would a country (for example, China) choose to keep their currency relatively pegged to the U.S. dollar? If the U.S. dollar were to appreciate considerably against most currencies, what would be the effect on Chinese exports to countries other than the United States? (Points : 20)
5. Question: (TCO E) Suppose the Canadian dollar (C$) price of one British pound is C$2.12. A hotel room in London costs 120 pounds, while a similar hotel room in Toronto costs C$250. In which city is the hotel room cheaper, and by how much? (Points : 15)
6. Question: (TCO E) Answer the next question on the basis of the following production possibilities data for Egypt and Greece: Egypt production possibilities:…
Greece production possibilities:……………..Refer to the above data. What would be feasible terms of trade between Egypt and Greece? (Points : 20)
7. Question: (TCO F) The Republic of Republic produces two goods/services, fish (F) and chips (C). In 2006, the 1000 units of F produced sold for $8 per unit and the 5000 units of C produced sold for $1 per unit. In 2007, the 1500 units of F produced sold for $10 per unit, and the 6,000 units of C produced sold for $2 per unit. Calculate Real GDP for 2007, assuming that 2006 is the base year. (Points : 15)
8. Question: TCO F) Country A produces two goods, elephants and saddles. In the year 2006, the 100 units of elephants produced sold for $2,500 per unit and the 30 units of saddles produced sold for $200 per unit. In 2007, the 120 units of elephants produced sold for $3,000 per unit, and the 50 units of saddles produced sold for $300 per unit. Real GDP for 2007, assuming that 2006 is the base year, is ______. (Points : 15)
9. Question: (TCO E) A Honda Accord sells for $24,000 in the United States and for SF28,500 in Switzerland. Given an exchange rate of SF1.20 = $1, how do the car prices of both countries compare? (Points : 15)
Week 7
ECON 545 Week 7 DQ 1, Comparative Advantage (Graded)
Below is a recommendedtopic for this discussion. If your instructor chooses a different “Making the
Connection” from this weeks’ readings or another alternate discussion topic, his or her chosen topic and any
required work in MyEconLab or elsewhere will be in the instructors’ first posting.
Read the Making the Connection short case titled Comparative Advantage, Opportunity Cost, and
Houseworkin Chapter 2 of our textbook, and also be sure to watch the video right under the Making
the Connection title (maybe a few times). Then post your first posting this week beginning to discuss
what you’ve read and watched in the video.
Then work on Problems and Applications 2.15,at the end of Chapter 2, answering and discussing
the questions in that exerciseECON 545 Week 7 DQ 2, Fixed and Floating Exchange Rates (Graded)
Below is a recommendedtopic for this discussion. If your instructor chooses a different “Making the
Connection” from this weeks’ readings or another alternate discussion topic, his or her chosen topic and any
required work in MyEconLab or elsewhere will be in the instructors’ first posting.
Read the Making the Connection short case titled Why Did Iceland Recover So Quickly from the
Financial Crisis?in Chapter 30 of our textbook, and also be sure to watch the video right under the
Making the Connection title (maybe a few times). Then post your posting this week beginning to
discuss what you’ve read and watched in the video.
Then work on Problems and Applications 2.23,at the end of Chapter 30, answering and
discussing the questions in that exercise.
Below is a recommendedtopic for this discussion. If your instructor chooses a different “Making the
Connection” from this weeks’ readings or another alternate discussion topic, his or her chosen topic and any
required work in MyEconLab or elsewhere will be in the instructors’ first posting.
Read the Making the Connection short case titled Comparative Advantage, Opportunity Cost, and
Houseworkin Chapter 2 of our textbook, and also be sure to watch the video right under the Making
the Connection title (maybe a few times). Then post your first posting this week beginning to discuss
what you’ve read and watched in the video.
Then work on Problems and Applications 2.15,at the end of Chapter 2, answering and discussing
the questions in that exercise
Below is a recommendedtopic for this discussion. If your instructor chooses a different “Making the
Connection” from this weeks’ readings or another alternate discussion topic, his or her chosen topic and any
required work in MyEconLab or elsewhere will be in the instructors’ first posting.
Read the Making the Connection short case titled Why Did Iceland Recover So Quickly from the
Financial Crisis?in Chapter 30 of our textbook, and also be sure to watch the video right under the
Making the Connection title (maybe a few times). Then post your posting this week beginning to
discuss what you’ve read and watched in the video.
Then work on Problems and Applications 2.23,at the end of Chapter 30, answering and
discussing the questions in that exercise.
ECON 545 Week 8 Final Exam
1. (TCO A) Suppose you are hired to manage a small manufacturing facility that produces Widgets. (a.) (15 points) You know from data collected on the Widget Market that market demand and market supply have both increased recently. As manager of the facility, what decisions should you make regarding production levels and pricing for your Widget facility? Remember that supply and demand are about the market supply and market demand, which is bigger than your own company. You are being given data on supply and demand for the whole market and are being asked what effect that has on you as a small part of that market. (b.) (15 points) Now, suppose that following the supply and demand changes in (a), a substitute good goes up in price, and your costs of production increase. What new decisions will you make regarding production levels and pricing for your Widget facility?
2. (TCO B) Here is some data on the demand for marshmallows:………(a.) (15 points) Is demand elastic or inelastic in the $6-$8 price range? How do you know? (b.) (15 points) If the table represents the demand faced by a monopoly firm, then what is that firm’s marginal revenue as it increases output from 1300 units to 2200 units? Show all work. (Be careful here!)
3. (TCO C) You have been hired to manage a small manufacturing facility whose cost and production data are given in the table below…………..(a.) (6 points) What is the marginal product of the second worker? (b.) (6 points) What is the marginal revenue product of the fourth worker? (c.) (6 points) What is the marginal cost of the first worker? (d.) (12 points) Based on your knowledge of marginal analysis, how many workers should you hire? Explain you answer.
4. (TCO C) Answer the next questions on the basis of the following cost data for a firm in pure competition:………..(a.) (15 points) Refer to the above data. If the product price is $45 at its optimal output, will the firm realize an economic profit, break even, or incur an economic loss? How much will the profit or loss be? Show all calculations. (b.) (15 points) Refer to the above data. If the product price is $75 at its optimal output, will the firm realize an economic profit, break even, or incur an economic loss? How much will the profit or loss be? Show all calculations.
5. (TCO D) A software producer has fixed costs of $18,000 per month and her Total Variable Costs (TVC) as a function of output Q are given below:………(a.) (15 points) If software can only be produced in the quantities above, what should be the production level if the producer operates in a monopolistic competitive market where the price of software at each possible quantity is also listed above? Why? (Show all work). (b.) (15 points) What should be the production level if fixed costs rose to $48,000 per month? Explain.
6. (TCO F) (a.) (20 points) Suppose nominal GDP in 1999 was $200 billion, and in 2001, it was $270 billion. The general price index in 1999 was 100 and in 2001 it was 150. Between 1999 and 2001, the real GDP rose by what percent? (b.) Use the following scenario to answer questions (b1) and (b2). In a given year in the United States, the total number of residents is 270 million, the number of residents under the age of 16 is 38 million, the number of institutionalized adults is 15 million, the number of adults who are not looking for work is 17 million, and the number of unemployed is 10 million. (b1.) (5 points) Refer to the data in the above scenario. What is the size of the labor force in the United States for the given year? (b2.) (5 points) Refer to the data in the above scenario. What is the unemployment rate in the United States for the given year?
7. (TCO G and H) (a.) (15 points) Suppose your local Congress representative suggests that the federal government intervenes in the gasoline market to stop runaway price increases. Would you say that this view basically supports the Keynesian or the Monetarist school of thought? Why? What position would the opposing school of thought take on this issue? (Be brief — you can answer this in 2 or 3 brief paragraphs). (b.) (10 points) Any change in the economy’s total expenditures would be expected to translate into a change in GDP that was larger than the initial change in spending. This phenomenon is known as themultiplier effect. Explain how the multiplier effect works. (c.) (15 points) You are told that 90 cents out of every extra dollar pumped into the economy goes toward consumption (as opposed to saving). Estimate the GDP impact of a positive change in government spending that equals $20 billion.
8. (TCO G) (a.) (20 points) Third National Bank is fully loaned up with reserves of $20,000 and demand deposits equal to $100,000. The reserve ratio is 20%. Households deposit $5,000 in currency into the bank. How much excess reserves does the bank now have, and what is the maximum amount of new money that can be created in the banking system as a result of this deposit? Show all work. (b.) (20 points) What is thediscount rate in the banking system? Explain how the Fed manipulates this rate to achieve macroeconomic objectives.
9. (TCO E and I) Let the exchange rate be defined as the number of dollars per British pound. Assume there is a decrease in U.S. interest rates relative to that of Britain. (a.) (10 points) Would this event cause the demand for the dollar to increase or decrease relative to the demand for the pound? Why? (b.) (10 points) Has the dollar appreciated or depreciated in value relative to the pound? (c.) (10 points) Does this change in the value of the dollar make imports cheaper or more expensive for Americans? Are American exports cheaper or more expensive for importers of U.S. goods in Great Britain? Illustrate by showing the price of a U.S. cell phone in Britain before and after the change in the exchange rate. (d.) (10 points) If you had a business exporting goods to Britain, and U.S. interest rates fell as they have in this example, would you plan to expand production or cut back? Why?
2. (TCO B) Here is some data on the demand for marshmallows:………(a.) (15 points) Is demand elastic or inelastic in the $6-$8 price range? How do you know? (b.) (15 points) If the table represents the demand faced by a monopoly firm, then what is that firm’s marginal revenue as it increases output from 1300 units to 2200 units? Show all work. (Be careful here!)
3. (TCO C) You have been hired to manage a small manufacturing facility whose cost and production data are given in the table below…………..(a.) (6 points) What is the marginal product of the second worker? (b.) (6 points) What is the marginal revenue product of the fourth worker? (c.) (6 points) What is the marginal cost of the first worker? (d.) (12 points) Based on your knowledge of marginal analysis, how many workers should you hire? Explain you answer.
4. (TCO C) Answer the next questions on the basis of the following cost data for a firm in pure competition:………..(a.) (15 points) Refer to the above data. If the product price is $45 at its optimal output, will the firm realize an economic profit, break even, or incur an economic loss? How much will the profit or loss be? Show all calculations. (b.) (15 points) Refer to the above data. If the product price is $75 at its optimal output, will the firm realize an economic profit, break even, or incur an economic loss? How much will the profit or loss be? Show all calculations.
5. (TCO D) A software producer has fixed costs of $18,000 per month and her Total Variable Costs (TVC) as a function of output Q are given below:………(a.) (15 points) If software can only be produced in the quantities above, what should be the production level if the producer operates in a monopolistic competitive market where the price of software at each possible quantity is also listed above? Why? (Show all work). (b.) (15 points) What should be the production level if fixed costs rose to $48,000 per month? Explain.
6. (TCO F) (a.) (20 points) Suppose nominal GDP in 1999 was $200 billion, and in 2001, it was $270 billion. The general price index in 1999 was 100 and in 2001 it was 150. Between 1999 and 2001, the real GDP rose by what percent? (b.) Use the following scenario to answer questions (b1) and (b2). In a given year in the United States, the total number of residents is 270 million, the number of residents under the age of 16 is 38 million, the number of institutionalized adults is 15 million, the number of adults who are not looking for work is 17 million, and the number of unemployed is 10 million. (b1.) (5 points) Refer to the data in the above scenario. What is the size of the labor force in the United States for the given year? (b2.) (5 points) Refer to the data in the above scenario. What is the unemployment rate in the United States for the given year?
7. (TCO G and H) (a.) (15 points) Suppose your local Congress representative suggests that the federal government intervenes in the gasoline market to stop runaway price increases. Would you say that this view basically supports the Keynesian or the Monetarist school of thought? Why? What position would the opposing school of thought take on this issue? (Be brief — you can answer this in 2 or 3 brief paragraphs). (b.) (10 points) Any change in the economy’s total expenditures would be expected to translate into a change in GDP that was larger than the initial change in spending. This phenomenon is known as themultiplier effect. Explain how the multiplier effect works. (c.) (15 points) You are told that 90 cents out of every extra dollar pumped into the economy goes toward consumption (as opposed to saving). Estimate the GDP impact of a positive change in government spending that equals $20 billion.
8. (TCO G) (a.) (20 points) Third National Bank is fully loaned up with reserves of $20,000 and demand deposits equal to $100,000. The reserve ratio is 20%. Households deposit $5,000 in currency into the bank. How much excess reserves does the bank now have, and what is the maximum amount of new money that can be created in the banking system as a result of this deposit? Show all work. (b.) (20 points) What is thediscount rate in the banking system? Explain how the Fed manipulates this rate to achieve macroeconomic objectives.
9. (TCO E and I) Let the exchange rate be defined as the number of dollars per British pound. Assume there is a decrease in U.S. interest rates relative to that of Britain. (a.) (10 points) Would this event cause the demand for the dollar to increase or decrease relative to the demand for the pound? Why? (b.) (10 points) Has the dollar appreciated or depreciated in value relative to the pound? (c.) (10 points) Does this change in the value of the dollar make imports cheaper or more expensive for Americans? Are American exports cheaper or more expensive for importers of U.S. goods in Great Britain? Illustrate by showing the price of a U.S. cell phone in Britain before and after the change in the exchange rate. (d.) (10 points) If you had a business exporting goods to Britain, and U.S. interest rates fell as they have in this example, would you plan to expand production or cut back? Why?
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