FSU Econ 2013 HW
For Catland, the opportunity cost of producing 1 unit of FS is ___ units of WC.
.20
For Dogistan, the opportunity cost of producing 1 unit of FS is ___ units of WC.
.25
Suppose U.S. Exports are $1.42 trillion, and imports are $2.13 trillion. Capital Inflow is $1.44 trillion. What is Capital Outflow, in trillions of dollars?
.7300
Bubba Bob sells his 1984 Chevrolet Camaro to his friend, Leroy Bubba Cletus, for $800, and buys a 1990 Chevrolet Beretta for $1,200.
0
The accompanying graph represents the market for bread in the small closed economy of Paleodieta. Paleodieta opens up to trade, and finds that the world price of bread is $2 per pound. How many billions of pounds of bread will be produced by Paleodieta?
1
Germany and Turkey are two countries, each producing two goods: Germs and Turkey Sandwiches. The opportunity cost for Germany to produce 1 Germ is 2 Turkey Sandwiches. The opportunity cost for Turkey to produce 1 Germ is 4 Turkey Sandwiches. What terms of trade would allow both Germany and Turkey to benefit from trade?
1 Germ for 3 Turkey Sandwiches would work, but so would 1 Germ for 2.5 Turkey Sandwiches, or 1 Germ for 3.5 Turkey Sandwiches.
Bubba Bob buys a new carburetor for his 1984 Camaro for $100, and then installs it himself.
100
Bubba Bob buys a used carburetor from a salvage yard for $10, and pays a mechanic $100 to install it.
100
Suppose CPI in 2015 was 230, and CPI in 1990 was 115. The price of an economics textbook in 1990 was $50. The price of the newest version of that textbook in 2015 was $200. If the price of the textbook from 1990 had just kept up with inflation, what would its price in 2015 be?
100
José is an illegal immigrant from Guatemala. Emma is a well-paid web designer who hires José to do some remodeling on her house. She offers José $5,000, but she would have been willing to pay him $5,500 (because that's how much she values the remodeling). José accepts, but he would have been willing to do the work for $4,000 (because that is how much he would earn doing work on a different house). What are the net gains to José and Emma that they get as a result of trading? You don't need to type a dollar sign with your answer; just enter a number.
1500.0000
If the Federal Reserve requires that banks hold 5% of deposits in reserve, and then the Fed injects $100 into the banking system, by how much does money supply rise in total? You may assume that banks lend out every dollar they are legally allowed to lend.
2,000
If GDP is $15 trillion, Consumption is $9 trillion, Government Spending is $2 trillion, Investment is $3 trillion, and Exports are $3 trillion, then imports must be $____ trillion.
2.0
It is the year 2060, and you are talking (or perhaps telepathically communicating) with your grandchildren. "Grandparental Unit" they say, "is it true that when you were in college, a gallon of gasoline cost $2.00?" "Grandchildren" you reply, "you know it is true, because by this point you have already directly downloaded the complete history of gasoline prices for the past 100 years into your cyberbrain. Still, you should not be fooled by this price, because it is nominal, not real." "Say what? Gasoline today costs $15 per gallon. That is clearly very expensive compared to gasoline when you were in college. Your cyberbrain is clearly an old, inferior model." You angrily reply "Turn your sassback unit down by 20%, grandchildren. Your parental units would not be happy to hear you talk to me that way. Besides, you must keep in mind that the Consumer Price Index was 240 when I was in college. Now it is 2400. This means that if I were to convert the 2016 price of $2.00 into year 2060 dollars, it would become..." What will you tell your grandchildren? You have the following facts: CPI in 2016 was 240. CPI in 2060 is 2400. The price of gasoline in 2016 is $2.00 per gallon. The price of gasoline in 2060 is $15 per gallon. How many dollars would you need in 2060 to buy what $2.00 would buy in 2016?
20
If Nominal GDP in 2015 was $150, and Real GDP in 2015 was $75, then GDP Deflator in 2015 was
200
In each of the following situations, how much do the actions taken contribute to U.S. GDP? Remember, some things aren't counted! You may assume that all the goods were produced in the U.S. Type in each answer as a number, without commas or dollar signs. For example, "10000" will be accepted by Canvas, but "$10,000" will not. Bubba Bob pays a mechanic $200 to install a new carburetor in his 1984 Chevrolet Camaro. Of this, $100 is parts, and $100 is labor.
200
Rooster works on a farm. Peacock works as a model. Owl works night shift security. Pigeon is actively looking for work. Seagull is living an empty, sad life, scrounging for scraps by the sea, with no job, and no plans to get one. Budgie isn't old enough to work yet. What is the unemployment rate in this economy? You may assume that this is the entire population of this country.
25
The graph below shows the market for corn with a price ceiling of $6 per bushel. After the ceiling is in place, how many bushels of corn are bought and sold?
3 bushels.
After graduating from college and getting a great paying job thanks to your degree in Advanced Hyperbolic Topology, you and your significant other decide to buy a house. You shop around to several different mortgage lenders, and eventually settle on one that offers an interest rate of 4.5% per year. You go to their office to fill out the mortgage paperwork, and overhear some of the employees talking in a back room. They mention that their company is expecting inflation this year to be 1.5%. What real interest rate does this mortgage lender expect to earn?
3%
For Dogistan, the opportunity cost of producing 1 unit of WC is ___ units of FS.
4
The country of Catland can produce up to 10 units of Frisky Scampering (FS), and up to 2 units of Warm Cuddling (WC). Dogistan can produce up to 12 units of FS, and up to 3 units of WC. For Catland, the opportunity cost of producing 1 unit of WC is ____ units of FS.
5
Suppose that the nation of Kerblopistan has a money supply of $1,000, a Velocity of 2, and a Real GDP of $40. What is the price level?
50
The accompanying graph represents the market for whole wheat flour in the small closed economy of Cornucopia. Cornucopia opens up to trade, and finds that the world price is $16 per pound. How many billions of pounds of flour will be exported by Cornucopia?
6
Suppose the country of Notmuchistan produces the following goods each week: 5 bananas, each worth $1 3 pineapples, each worth $2 20 sharp pointed sticks, each worth $3 What is Notmuchistan's weekly Nominal GDP?
71
Bubba Bob sells his 1984 Chevrolet Camaro for $800, changes his name to Clarence Julien Delacroix, and buys a new Cadillac CTS-V for $80,000
80,000
Which of the following works best as money?
A Roman denarius, which was a small silver coin that could be exchanged for goods and services across the empire and beyond.
Price Ceiling
A maximum legal (allowed) price.
Price Floor
A minimum legal (allowed) price.
The point of Steven Landsburg's "Iowa Car Crop" parable is...
A tax on imports from Japan is also a tax on farmers in Iowa that export to Japan.
Which of the following are examples of people responding to incentives according to their rational self-interest?
Aidan, tired of being made fun of because his parents gave him a fashionable name that very quickly became dated, has his name legally changed. He pays $40 in legal fees. Anna has been playing a lot of League of Legends in her spare time, and has become so good at it that she has been offered $70,000 a year to play for a professional team. She takes the job, dropping out of college.
Suppose that the rate of spending growth in an economy, LaTeX: \%\Delta M+\%\Delta V % Δ M + % Δ V , is 5%. Which of the following Dynamic Aggregate Demand curves corresponds to this rate of spending growth?
B
If the Federal Reserve wants to increase money supply, which of the following would achieve this goal?
Buying Treasury Bills from banks
HW Quiz 2 Question 1
C
HWQuiz1: Question 1
C
Which of the following is correct?
Changes in money supply growth can change inflation in the long run, but cannot change the economic growth rate.
C
Consumer Surplus
The graph below shows another tax. This tax has been legally placed on...
Consumers
E
Deadweight Loss
The country of Catland can produce up to 10 units of Frisky Scampering (FS), and up to 2 units of Warm Cuddling (WC). Dogistan can produce up to 12 units of FS, and up to 3 units of WC. Which of the following is correct?
Dogistan has the lowest opportunity cost of producing WC. Catland has the lowest opportunity cost of producing FS.
Josephine teaches economics, and makes about $110,000 per year doing so. If she couldn't teach economics, she would be doing economic consulting for a major bank for $150,000 per year. If she couldn't work as an economic consultant, she would go back to school and study history. If she couldn't do that, she would stay at home and take care of the kids (her husband currently does this, but could go back to work if she couldn't find a job she liked). Which of the following is Josephine's opportunity cost of teaching economics?
Doing economic consulting.
The rate of technological progress increases, leading to faster economic growth in the long-run.
Dynamic Aggregate Demand does not move (though there may be a movement along the curve)
Money supply growth decreases.
Dynamic Aggregate Demand shifts to the left
Velocity growth decreases.
Dynamic Aggregate Demand shifts to the left
Money supply growth increases.
Dynamic Aggregate Demand shifts to the right
Velocity growth increases.
Dynamic Aggregate Demand shifts to the right
A new car sold to a nice old lady who only drives it to church on Sundays
Final Good
A new guitar sold by a music store to a child learning to play
Final Good
A pizza oven used by a restaurant to make pizza
Final Good
Cement purchased by a homeowner to repair a sidewalk
Final Good
The country of Catland can produce up to 10 units of Frisky Scampering (FS) per day, and up to 2 units of Warm Cuddling (WC) per day. Which graph below represents the production possibility frontier for Catland?
Graph a
Graph: HW Quiz Zero, question 3
I could listen to 7 podcasts and read 1 book each week.
A ton of steel that will be used to make several new cars
Intermediate Good
Cement purchased by a contractor to build a sidewalk for a new house
Intermediate Good
Flour used by a pizza restaurant to make a pizza
Intermediate Good
Cowhide, purchased by a tanner, to be made into a belt for retail sale
Intermediate good
Due to high inflation, Alejandra's Market in Venezuela has a team of three employees whose job is to update the prices of goods on the store shelves, all day, every day.
Menu Costs
The Federal Reserve increasing the rate of money supply growth
No effect
Flour, an input for cookies, is sold at $3 per bag.
Not characteristic of black market
Fortune cookies are sold at $1.90 each.
Not characteristic of black market
The year is 1779 in Iceland. Light sources, such as oil lamps, are precious commodities (as harnessed electricity is not yet available, and the nights are long for much of the year). The government wants to intervene in the pricing of oil lamps so that its citizens don't pay outrageous amounts of money for lighting. The currency used in Iceland at the time was the Rigsdaler. Below is a graph depicting Iceland's hypothetical supply and demand for oil lamps. If Iceland's governor chooses to set a price ceiling of 40 Rigsdaler for an oil lamp, what will occur?
Nothing will change.
Suppose the market for desktop computers is in equilibrium. Intel develops a new process for producing computer chips which does not improve performance, but does allow more chips to be produced at a lower cost. What happens to the equilibrium price and quantity?
Price falls, quantity rises.
Suppose the market for bread is in equilibrium. Two things then happen at the same time: Warmer-than-usual weather results in a larger harvest of wheat (which is used to make bread), and a new diet, known as the Anti-Atkins-Anti-Paleo diet sweeps the country, encouraging everyone to eat more bread. What happens to the equilibrium price and quantity of bread?
Price is indeterminate, quantity rises.
Suppose the market for tequila is in equilibrium, but then two things happen simultaneously. First, a new mixed drink using tequila, known as a "Fancy Spindiffilizer", sweeps the country. Second, an earthquake in Mexico damages several tequila production facilities. What happens to the equilibrium price and quantity of Tequila?
Price rises, quantity is indeterminate.
The graph below depicts an economy that is open to trade, but has a tariff. Match each area on the graph with the corresponding label. Note that not all the labels may be used. A
Producer Surplus
Liquor stores in Tennessee lobby the state legislature, asking that wine shipments from out-of-state be made illegal. They argue that if consumers are allowed to buy wine from out-of-state, many in-state employees of liquor stores will lose their jobs. What would an economist likely say in response to this argument?
Resources that are no longer used producing goods for which Tennessee does not have comparative advantage can be reallocated to those industries in which Tennessee does have a comparative advantage, making Tennesseans wealthier. If people out-of-state can distribute wine at a lower price than people in-state, the consumers of this state will benefit from lower wine prices. While it is easy to see the jobs destroyed by out-of-state wine sellers, it is harder to see the jobs that are never allowed to exist because the workers are in wine sales instead of something else. (ALL OF THESE)
Significant and sustained increases in marginal income tax rates.
Shifted the Solow Growth Curve to the left
The 1970s oil crisis.
Shifted the Solow Growth Curve to the left
James Watt's invention of the steam engine in 1775.
Shifted the Solow Growth Curve to the right
The Internet revolution of the 1990s.
Shifted the Solow Growth Curve to the right
Due to high inflation, people in Iran make frequent trips to the bank to withdraw money for everyday transactions, instead of carrying money in their wallets
Shoeleather Costs
Suppose the market for computer motherboards is in equilibrium. An earthquake then occurs in Taiwan (where many motherboards are produced), destroying many factories, as well as killing or injuring many people. Which of the following graphs shows what happens in the market for computer motherboards? Only choose one of the graphs. That is, you might be able to come up with a reason for both supply and demand to move, but focus on which change is likely to be more important in its effect on the price and quantity of motherboards.
Supply Decreases
B
Tariff Revenue
Inflation has been very unpredictable lately. Because of this, Elon is reluctant to proceed with building his new factory. If he borrows a lot of money to build it, but inflation is much lower than expected, he will end up paying more than he planned. He decides not to invest in building the factory.
The Uncertainty of unexpected inflation causes a reduction in investment
Consumer Surplus
The difference between what consumers are willing to pay and what they actually pay.
Suppose the rate of technology progress rises, resulting in faster long run economic growth. Which of the following is correct?
The inflation rate falls, and the economic growth rate rises.
Suppose CPI in 2015 was 230, and CPI in 1990 was 115. The price of an economics textbook in 1990 was $50. The price of the newest version of that textbook in 2015 was $200. In the previous question, you determined what the price of the textbook from 1990 would be in 2015 if it had just kept up with inflation. Given your answer to the previous question, which of the following is correct?
The textbook price has actually risen faster than inflation.
The year is 1779 in Iceland. Light sources, such as oil lamps, are precious commodities (as harnessed electricity is not yet available, and the nights are long for much of the year). The government wants to intervene in the pricing of oil lamps so that its citizens don't pay outrageous amounts of money for lighting. The currency used in Iceland at the time was the Rigsdaler. Below is a graph depicting Iceland's hypothetical supply and demand for oil lamps. If Iceland's governor chooses to set a price ceiling of 15 Rigsdaler for an oil lamp, what will occur?
There will be a shortage of oil lamps.
Suppose that the city of Halifax decrees that all restaurants located within a 15 mile radius of the University of Halifax must charge at least $10 a meal so that college students can become more refined in their dining. What is a likely result of this price floor? (Note that the last problem asked you which was not likely; this one asks which one is likely.)
There will be a surplus of food at many of the restaurants as quantity supplied exceeds quantity demanded at a price of $10 per meal.
Suppose that the city of Lethbridge decrees that all restaurants located within a 15 mile radius of the University of Lethbridge can charge no more than $1 a meal so that college students can eat out economically. Which of the following is NOT a likely result of this price ceiling?
There will be food surpluses at many of the restaurants as quantity supplied exceeds quantity demanded at a price of $1 per meal.
Out of a fear of inflation, Ron consults with a financial advisor, and then pays him to buy gold, instead of investing in stocks.
Unexpected Inflation
Which of the following causes SRAS to shift?
When inflation expectations adjust.
A Mrs. Field's chocolate chip cookie is sold for $8.
characteristic of black market
The web cookie, an illegal delicacy prized for its distinctive icing decorations, is sold at the bazaar.
characteristic of black market
Suppose the government proposes a $100 per phone tax on smartphones, arguing that the producers of smartphones can easily afford to pay it. An economist would respond that...
consumers will end up paying some of the tax, because the burden of a tax is not determined by the legal assignment of the tax.
If two countries specialize according to comparative advantage and trade, they will both
end up with more stuff.
A country opens to trade. If the world price of a good exceeds the domestic price, the result will be...
exports.
A country opens to trade. If the world price of a good is less than the domestic price, the result will be...
imports.
Congressman Jerk McStupidface suggests a new tax on airline tickets bought at the last minute. Thinking about people who buy airline tickets at the last minute, airlines who sell them, and the way that affects pricing currently, you can conclude that the burden of this tax is likely to fall more heavily on...
last-minute buyers of airline tickets.
Equilibrium
market price where the quantity of goods supplied is equal to the quantity of goods demanded.
In the neighborhood of Sesame Street, cookies are in particularly high demand. The demand is, in fact, so great that prices for cookies are skyrocketing, and average citizens can no longer obtain this staple food. The government is considering a price control to keep cookies affordable for its citizens. Which kind of price control is the government considering?
price ceiling
The graph below shows a tax. This tax has been legally placed on...
producers
Suppose the economy is in a long run equilibrium as depicted below. Money supply growth is 8% per year, and velocity growth is 0% per year. Consumers and business owners then hear some bad news--there is a big war breaking out in the Middle East, or a natural disaster, or a new financial crisis. This shocking news causes the rate of velocity growth to fall from 0% to -8% (money supply growth is unchanged). Which of the following is the best way to describe the resulting short run equilibrium? You might want to draw this yourself.
recession
The graph below shows the market for corn with a price ceiling of $6 per bushel. The market is not in equilibrium after the price ceiling is imposed. Rather, there is a _______ of ______ million bushels.
shortage, 4
The oil crisis of the 1970s resulted in an increase in inflation rates and a lower rate of economic growth. This combination is known as..
stagflation.
HW Quiz 3:Question 2
surplus, 4 million
A country opens to trade, but imposes a tariff on imports. If the world price of a good is greater than the domestic price, the result will be:
the government collects no tariff revenue
