Category: Economics

Andy and Chris work together at a bakery, making lemonade and iced tea. Andy can make 35 cups of lemonade per hour, 25 cups of iced tea per hour, or a combination of both. Chris can make 16 cups of lemonade per hour, 20 cups of iced tea per hour, or a combination of both. Fill in the blanks for the statements below. If your answer is a number, put it as a decimal. For example, if your answer is 4/3, you should put 1.33. If your answer is a name, spell it exactly as above.
Andy’s opportunity cost of 1 cup of lemonade is ____ cups of iced tea.
Andy’s opportunity cost of 1 cup of iced tea is ____ cups of lemonade.
Chris’s opportunity cost of 1 cup of lemonade is ____ cups of iced tea.
Chris’s opportunity cost of 1 cup of iced tea is ____ cups of lemonade.
____ has the absolute advantage in making lemonade.
____ has the absolute advantage in making iced tea.
____has the comparative advantage in making lemonade.
____has the comparative advantage in making iced tea.
Suppose Andy and Chris are not specialized. Andy is making 21 cups of lemonade and 10 cups of iced tea per hour. Chris is making 12 cups of lemonade and 5 cups of iced tea per hour. If Andy and Chris fully specialize, they will all together make ____ more cups of lemonade per hour and ____ more cups of iced tea per hour.

As the GATT and WTO have evolved, the trade rounds have become:
Stayed about the same in length of negotiating time
Shorter in length of negotiating time
Longer in length of negotiating time
Flag question: Question 3 — 0.1 pts
The WTO seeks to promote economic stability and prevent crises; to help resolve crises when they do occur; to promote growth and alleviate poverty; and monitor national monetary systems (surveillance).
True
False
Flag question: Question 4 — 0.1 pts
Some of the harshest critics of organizations such as the WTO, IMF, and World Bank have been Europeans, Wall Street and Neoliberals.
True
False
Flag question: Question 5 — 0.1 pts
Which of the following organizations is an IGO dealing with trade?
ITU
IAEA
WTO
IMF
Flag question: Question 6 — 0.1 pts
Congress approved GATT in 1947.
True
False
Flag question: Question 7 — 0.1 pts
The IMF is essentially the central bank to the world, with a managing director who is always a European.
True
False
Flag question: Question 8 — 0.1 pts
The IMF lends money on a short term basis to stabilize a country’s economy, but it does so with requirements called

Why do firms offer efficiency wages? (a) In order to Increase the number of employees (b) In order to cause involuntary unemployment (e) In order to pay employees a higher wage so they are not indifferent about leaving the firm (d) All are reasons firms offer efficiency wages
The AD curve is a function of (a) Expected Inflation (b) Oil Prices (c) Consumption Behavior (d) All of above
Money demand is a function of (a) the risk free interest rate (b) income (e) financial risk (d) All of the above
The labor demand curve would be upward sloping if (a) there was decreasing marginal product of labor. (b) there was increasing marginal product of capital. (c) there was increasing marginal product of labor. (d) there was constant marginal products of labor and capital.
TRUE or FALSE: Investment always equals Savings in the Classical Model? (a) True. (b) False.
TRUE or FALSE: When the LM curve shifts the AD curve always shifts as well. (a) True. (b) False
TRUE OR FALSE: When the IS curve shifts the AD curve always shifts in the same direction. (a) True. (b) False
TRUE or FALSE: Wages (IP) is a nominal variable in our AS/AD model. (a) True. (b) False
TRUE or FALSE: endogenous capital implies that LRAS is a function of Is. (a) True (b) False

20a.
Each member of the Board of Governors of the Federal Reserve System is selected by:
a. the U.S. president and confirmed by the Senate.
b. the Supreme Court and confirmed by the Senate.
c. the U.S. president and confirmed by the Supreme Court.
d. the Chairman of the Banking Committee and confirmed by the Senate.
b.
The Board of Governors of the Federal Reserve System:
is the largest bank in the United States.
coordinates policies for the 12 Federal Reserve Banks.
is made up of five members.
is replaced every 2 years.
c.
The Federal Open Market Committee (FOMC) includes:
the Chairman of the Federal Reserve Board of Governors and 7 of the 12 presidents of the Federal Reserve Banks, of which the president of the New York Fed has a permanent voting seat.
members of the Board of Governors and 5 of the 12 presidents of the Federal Reserve Banks, of which the Chairman of the Federal Reserve Board of Governors has a permanent voting seat.
members of the Board of Governors and 5 of the 12 presidents of the Federal Reserve Banks, of which the president of the New York Fed has a permanent voting seat.
members of the Board of Governors, 7 of the 12 presidents of the Federal Reserve Banks, and the president of the United States.

ECON 3021
1.
Suppose a consumer views two goods, X and Y, as perfect complements. Her utility function is given by U = MIN [2X, Y]. Sketch the graph of the consumers indifference curve that goes through the bundle X = 7 and Y = 8. Put the amount of Y on the vertical axis, and the amount of X on the horizontal axis. Which of the three assumptions that we made about consumer preferences is violated in this case?
2.
Suppose a consumer has $250 to spend on two goods, Good X and Good Y. The price of Good X is given by Px = $10. The price of Good Y is given by Py = $25. Graph the consumer’s budget constraint. Please put the quantity of Good X on the horizontal axis, and the quantity of Good Y on the vertical axis. Be sure to label your graph carefully and accurately. What is the slope of the budget constraint?
3.
Suppose a consumer’s preferences can be represented by the utility function U(X,Y) = XY. In the table below, identify 4 points on the consumer’s indifference curve where U = 100.
4.
Suppose a consumer’s preferences can be represented by the utility function U(X, Y) = Min (2X,Y). Also, suppose the consumer has $300 to spend and the price of Good X is PX = $2 and the price of Good Y is PY = $5.

Answer w2. Who messures the listion force, end how is at defined?
a. The 45 Bureau of Labor Statistics (RLS) measures the labor force ins Bople over 15 years of age who are employed and those who are actively seeving work. The U.S. Rurea u of Employment (USBE) measures the labor force as people Ower 16 years of age who are employed and those who are actively seebing work.
b. The unemployment rate is defined as
The number of adults drided by the labor force.
the ratio of the number of adults who are working divided by the adult population.
the proportion of the adult population looking for work.
the number of unemployed persons divided by the labor force.
c. If there is an increase in the unemployment rate, the size of the labor force
will not change.
could increase or decrease.
must decrease.
must increase.
d. A positive unemployment rate—more than zero percent—is fully compatible wit employment because at full employment,
unemployment includes frictional unemployment, which is always po because people are transitioning to new jobs
there is usually some unemployment due to the business cycle.
unemployment includes seasonal unemployment, which is usually p. because people are transitioning to new jobs.
◻ the economy is producing at capacity.