You will need to fill in the following exam sheet (see link below) for this part of your exam. You may either print out the exam sheet and complete it by hand, or type in/draw your answers in Word in the document itself.

• Directions for completing the exam sheet by hand:  if you hand write the exam sheet, when you are done, you will need to scan and submit the sheet using the link at the end of this part of the exam.
• Directions for completing the exam sheet in Word:  If you complete the exam sheet in Word you will need to save a copy of the file and submit it using the link at the end of this part of the exam.

Download Exam Sheet 1 Part 1 C

 

 

Question 1 5 pts

Given that the current wage is $80 and the price of output (Q) is equal to $3.00, complete the table on your exam sheet.

 

NOTE: This work is to be done using the Exam Sheet 1 Part 1 C. You will upload this work, along with other work to be done on this sheet, to question #8 on this exam. Enter the word "Finished" into the text-box below when ready to move on.

 

 

Question 2 10 pts

Use your table on the exam sheet to answer the following questions:

1. How many workers will the firm hire to maximize profits?
2. What are the maximum profits?
3. Explain why the firm doesn't hire one less worker as well as why the firm doesn't hire one more worker.

 

NOTE: You need to answer this question fully in the text-box located below. Be complete with your answers. This question is worth 10 points!

 

 

 

Question 3 6 pts

Now draw the W/MRP Labor Market Diagram associated with the table above on the area indicated on your exam sheet. Draw this as we did in the lectures, being sure to be clear on the areas that represent:

• labor costs,
• MRP (label the curve exactly as we did in lectures and homework), and
• the profit or loss (with actual numbers)
• Identify L* (as we did in lectures)

Use different colors if at all possible. 

Label this initial point where the firm maximizes profit as point A. 

 

NOTE: You will be adding a point B to this diagram later in this part of the exam.

NOTE: This work is to be done using the Exam Sheet 1 Part 1 C. You will upload this work, along with other work to be done on this sheet, to question #8 on this exam. Enter the word "Finished" into the text-box below when ready to move on.

 

Question 4 3 pts

Draw a production function diagram in the indicated area on your exam sheet, making sure you label the diagram completely including this initial point as Point A.

 

NOTE: You will be adding a Point B to this diagram later in this part of the exam.

NOTE: This work is to be done using the Exam Sheet 1 Part 1 C. You will upload this work, along with other work to be done on this sheet, to question #8 on this exam. Enter the word "Finished" into the text-box below when ready to move on.

 

Question 5 3 pts

Draw a supply curve on your exam sheet in the indicated area. Locate Point A consistent with your Points A above. To get a second point on this original supply curve, pretend that prices go up to $5 and map out the change in the profit maximizing output, like we did in the lectures. This will give us our original supply curve.

 

NOTE: You will be adding a point B to this diagram later in this part of the exam.

NOTE: This work is to be done using the Exam Sheet 1 Part 1 C. You will upload this work, along with other work to be done on this sheet, to question #8 on this exam. Enter the word "Finished" into the text-box below when ready to move on.

 

Question 6 5 pts

Suppose, due to a technological innovation, the marginal product of each worker rises by two. At the same time, due to tight labor markets, the wages that you must pay rise to $100 per day. Additionally, preferences for your product rise and thus prices rise to $5.00. Given these new conditions, on a piece of scrap paper, fill in a table like the following.  The current wage is $100 and the price of output (Q) is equal to $5.00.

NOTE: You will not need to submit this table, but it will help you answer the following THREE questions.

1. Exam 1 Table 2LQMPL MRP Marginal Profit Total Profit 0 0 -- -- -- 0 1      2      3      4      5      6     How many workers will you hire to maximize profits?
2. What are the maximum profits?
3. Why did the firm change their behavior given the changes above? Be sure to compare the profit if these changes occurred and the firm did not change their labor input to the profit of the firm when they act as a profit maximizer.

 

NOTE: You need to answer this question fully in the text-box located below. Be complete with your answers. This question is worth 5 points!

 

Question 7 8 pts

1. Now show these results on the W/MRP Labor Market diagram on your exam sheet labeling the new equilibrium point as Point B.
2. Show these results on your Production Function diagram on your exam sheet being sure to label everything including Point B.
3. Show these results on your Supply diagram on your exam sheet, being sure to label Point B.

 

NOTE: Be sure to label everything completely. Use colors if possible.

NOTE: This work is to be done using the Exam Sheet 1 Part 1 C. You will upload this work, along with other work to be done on this sheet, to question #8 on this exam. Enter the word "Finished" into the text-box below when ready to move on.

 

Question 8 0 pts

Upload your exam sheet for Part 1 here.

Upload Choose a File

 

 

You will need to fill in the following exam sheet (see link below) for this part of your exam. You may either print out the exam sheet and complete it by hand, or type in/draw your answers in Word in the document itself.

• Directions for completing the exam sheet by hand:  if you hand write the exam sheet, when you are done, you will need to scan and submit the sheet using the link at the end of this part of the exam.
• Directions for completing the exam sheet in Word:  If you complete the exam sheet in Word you will need to save a copy of the file and submit it using the link at the end of this part of the exam.

Download Exam Sheet 1 Part 2 C

 

 

 

Question 9 5 pts

Assuming 2011 is the base year, fill out Table 1 on Exam Sheet 2 to answer this question.

Assuming 2011 is the base year, what is the price index in 2012 and the inflation rate for the ‘typical college student’ between 2011 and 2012?

 

NOTE: This work is to be done using the Exam Sheet 1 Part 2 C. You will upload this work, along with other work to be done on this sheet, to question #13 on this exam. Enter the word "Finished" into the text-box below when ready to move on.

 

Question 10 5 pts

Assuming 2012 is the base year, fill out Table 2 on Exam Sheet 2 to answer this question.

Assuming 2012 is the base year, what is the price index in 2011 and the inflation rate for the ‘typical college student’ between 2011 and 2012?

 

NOTE: This work is to be done using the Exam Sheet 1 Part 2 C. You will upload this work, along with other work to be done on this sheet, to question #13 on this exam. Enter the word "Finished" into the text-box below when ready to move on.

 

Question 11 5 pts

Why is your answer in Question 10 above different than your answer in Question 9? Be as specific as possible explaining why the typical college student behaved the way they did.

NOTE: You need to answer this question fully in the text-box located below. Be complete with your answers. This question is worth 5 points!

 

Question 12 5 pts

What is the chain – weighted rate of inflation for the ‘typical college student?

NOTE: You need to answer this question fully in the text-box located below. Be complete with your answers. This question is worth 5 points!

 

Question 13 0 pts

Upload your Exam Sheet for Part 2 here.

Upload Choose a File

 

 

Question 14 5 pts

PART 3

 

Use the information below for Questions 14 and 15

This information comes from the self sufficiency article that we talked about in the lectures. The numbers represent the cost of a given basket of goods and services.

We declare Sullivan County as the ‘base’ county.

• Clarion, $20,500
• Sullivan, $18,100
• Westmoreland, $24,000 
• Allegheny, $28,700

What is the price index in Clarion county? In Westmoreland county? In Allegheny county?

NOTE: You need to answer this question fully in the text-box located below. Be complete with your answers. This question is worth 5 points!

 

Question 15 5 pts

If you made $50,000 per year in Allegheny county, how much would you need to make in Clarion county to have the same purchasing power as you have with $50,000 in Allegheny county?

 

NOTE: You need to answer this question fully in the text-box located below. Be complete with your answers. This question is worth 5 points!

 

Question 16 5 pts

Use the information below for Questions 16 and 17.

A make believe economy produces the following 3 goods.

Good2011 Quantity2011 Price2012 Quantity2012 PriceApples50$3.0055$3.50Oranges10$1.5010$1.50Pears40$1.0020$1.50Assuming 2011 is the base year, calculate real GDP and the GDP price deflator in 2012.

NOTE: You need to answer this question fully in the text-box located below. Be complete with your answers. This question is worth 5 points!

 

Question 17 5 pts

Assuming 2011 is the base year, calculate the percent change in real GDP and the percent change in the GDP deflator between 2011 and 2012.

 

NOTE: You need to answer this question fully in the text-box located below. Be complete with your answers. This question is worth 5 points!

 

Question 18 8 pts

PART 4

 

Suppose that in Japan can produce 4 cars in 6 hours and 20 HD TVs in 8 hours. The US can produce 4 cars in 7 hours and 20 TVs in 5 hours. Explain which country has a comparative advantage in producing cars and which country has a comparative advantage in producing TVs, In your answer, be sure to be very specific as to how you identified the comparative advantage in each country and define how one goes about identifying comparative advantage.

NOTE: You need to answer this question fully in the text-box located below. Be complete with your answers. This question is worth 8 points!

 

Question 19 6 pts

Assuming that this is what is produced in each country (4 cars and 20 HD TVs), nothing more and nothing less, explain how both countries can benefit through trade. Again, be very specific in terms of identifying the gains from trade and how each country is better as compared to not trading at all.

NOTE: You need to answer this question fully in the text-box located below. Be complete with your answers. This question is worth 6 points!

 

Question 20 6 pts

Suppose the one year nominal interest rate is 4 percent and that the expected inflation is equal to 5 percent. The price index over this one year period went from 225 to 229. Compare the ex-ante real rate of interest to the ex-post real rate of interest. Which real rate of interest would you more likely be willing to spend today and which real rate of interest would you more likely be willing to save and why?

NOTE: You need to answer this question fully in the text-box located below. Be complete with your answers. This question is worth 6 points!

• 1496648936-104_online_exam_1_question_1C.doc
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Status NEW Posted 05 Jun 2017 07:06 AM My Price 20.00

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