1. Unemployment rate measures the number of unemployed workers in the labor force.

The following given table gives statistics on the labor force and total employment for nation B. (Numbers are in thousands)

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YEAR 1 YEAR 2

LABOR FORCE 84000 98675

EMPLOYED 82320 90675

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a. For Year 1, the unemployed labor force is __________, unemployment rate is ______________.

For Year 2, the unemployed labor force is ___________, unemployment rate is ______________.

b. If the frictional unemployment rate is 1%, and the structural unemployment is 3% in a nation,

what is the natural rate of unemployment rate for this nation _____________

c. Which year (1 or 2) has achieved the natural rate of unemployment?______________

d. What is the cyclical unemployment rate in both years? Year 1 is ________ .Year 2 is ___________.

2. Identify which market structure the following firms are in and explain your judgements.

a. Walt Disney - A media company.

b. Trash collecting company in your city.

c. Trade Joe's - Grocery store chain.

3. GDP measures the total output of a nation.

a. Good W and Y are made with intermediate goods A and B. The market value of A is $10 and the market value of B is $13. The market value of W is $23, and the market value of Y is $4. Which of the four dollar amounts goes into the computation of GDP?

b. Define Business cycle and ist 4 phases of a Business Cycle.

c. Since US currently has a trade deficit, how US GDP will be impacted by this deficit?
d.. List 2 trade barriers that government can implement to lower US trade deficit.

4. Supply and Demand:

a. list 2 shift factors of demand curve and 2 shift factors of supply curve:

b. Use determinants for price elasticity of demand in judging whether demand for each of the following products is elastic or inelastic.

i. Peaches

ii Toothpaste

iii. Colgate Toothpaste

iv. Gasoline