1. What happens in the Oil market if OPEC increases oil production?
a. Use supply and demand. Show what happens to equilibrium price and equilibrium quantity.
b. What type of goods are OPEC oil and South Texas Oil, compliments, substitutes, normal or inferior?
c. In the market for South Texas Oil, what happens if OPEC oil is cheaper while at the same time, a flying car is developed that is safe. Draw the curves, show both equilibrium prices, equilibrium quantities, and name the reasoning for the shifts.
d. What happens to GDP in South Texas?
e. What happens to GDP in the USA?
2. What are the ways that the fed affects monetary policy?
3. Determine whether each of the following would be considered frictional, structural, seasonal, or cyclical unemployment:
a. A person hired as a Santa at the local mall who was hired for the Christmas season is laid off after Christmas.
b. A manufacturer worker who is laid off as the employer suffered losses due to a recession.
c. An engineer becomes unemployed as automated machinery performs the function she did.
d. A new college graduate is looking for employment]
4. 2013 base year
|
Year
|
P Food
|
Q Food
|
P
Rent
|
Q Rent
|
P Transportation
|
Q Transportation
|
P Military Guns
|
Q Military Guns
|
|
2013
|
$10
|
100
|
$500
|
10
|
$50
|
20
|
$500
|
10
|
|
2014
|
$15
|
120
|
$550
|
20
|
$55
|
22
|
$400
|
8
|
|
2015
|
$13
|
110
|
$525
|
15
|
$60
|
15
|
$1000
|
15
|
|
2016
|
$20
|
115
|
$600
|
15
|
$65
|
22
|
$1200
|
10
|
a. Calculate Nominal GDP, calculate the Percentage change in Nominal GDP from each preceding year.
b. Calculate Real GDP, calculate the percentage change in Real GDP from each preceding year.
c. Calculate the GDP deflator, calculate the percentage change in GDP deflator from each preceding year.
d. Which year had the biggest growth in quantity? How can you tell, from real GDP, nominal GDP, or GDP deflator?
5. Using the information in question 5, a basket of goods is 5 units of food, 1 unit of rent, and 2 units of transportation. (2013 base year)
a. Calculate Consumer Price Index for each year.
b. Calculate the Inflation Rate for each year.
6. Using the information from Question 5 and 6. (2013 base year)
a. Graph GDP Deflator and Consumer Price Index on 1 graph. The index scale will go on the Y axis and the time period on the X axis.
7. From question 7 answer the following. (2013 base year)
a. Which time period has the most inflation?
b Do the indexes move together?
c. Which year do consumer's feel the most inflation?
d. What would be a real world reason for GDP inflation to be higher than CPI inflation?
8 Choose a school of economic thought from this website: http://www.pragcap.com/a-cheat-sheet-for-understanding-the-different-schools-of-economics.or http://www.zerohedge.com/news/2014-06-25/pocket-guide-understanding-different-schools-economics. Tell me what you like about that school of economic thought in 200-400 words.
9. The market for corn is depicted as follows:
a. A complete the table below
b. What is the equilibrium price and quantity?
|
Price per Bushel
|
Quantity Demanded
(millions of bushels)
|
Quantity Supplied
(millions of bushels)
|
Surplus/ Shortage
|
Will Price Rise or Fall?
|
|
$1.80
|
320
|
200
|
|
|
|
2.00
|
300
|
230
|
|
|
|
2.20
|
270
|
270
|
|
|
|
2.40
|
230
|
300
|
|
|
|
2.60
|
200
|
330
|
|
|
|
2.80
|
180
|
350
|
|
|
10. In the market for Concert tickets, what happens when a new headliner is announced while venue costs are reduced?