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Tommy Twit's mother measures the departure of any bundle from her favorite bundle for Tommy by the sum of the absolute values of the differences. Her favorite bundle for Tommy is (3,5), that is, 3 cookies and 5 glasses of milk. Tommy's mother's indifference curve that passes through the point (c,m)=(3,7) also passes through...

A. (3,9)

B. (5,5)

C. (5,7)

D. (7,7)

E. None of the above

The primary objective of a cartel is to:

A. maximize the amount of profit received by each member of the organization.

B. ensure each member of the organization some minimum amount of profit.

C. maximize the joint profits of the members of the organization.

D. maximize the average profits of the members of the organization.

A travelling salesman enters the barter market of a small town finding the following prices:
1 bottle of milk can change for 3 apples or 2 bananas or 18 berries, 1 apple can change for 1/3 bottle of milk or 1/2 bananas or 6 berries, 1 banana can change for 1/2 bottle of milk or 2 apples or 9 berries, and 1 berry can change for 1/18 bottle of milk or 1/6 apples or 1/9 bananas.

Now suppose besides the barter market, people can also directly sell goods to the trading association for coins, which can be used anywhere in the whole country. The prices are 1 bottle of milk for 36 pence, 1 apple for 12 pence, 1 banana for 18 pence, and 1 berry for 2 pence. Goods purchased by the association will go back to the market for exchange.

(1) Say the salesman arrives at the town with 50 apples. What is the total amount the trading association needs to pay for the goods?
(2) What will happen to the barter rate of the small town? Hint: You answer in (1) is inspiring.

A. Juanita is training for a triathlon, a timed race that combines swimming, biking, and running. Consider the following sentence: Juanita has only 20 hours this week that she can devote to training. Each hour she spends swimming is an hour that she can't spend biking or run. Which basic principle of individual choice do these statements best illustrate?

1. Juanita can use time most efficiently by spending the same amounts of time on swimming, biking, and running.
2. People face trade-offs
3. People usually exploit opportunities to make themselves better off.
4. Juanita has an incentive to spend more time on swimming than on biking or running.

B. The interaction of individual choices

Immediately after an ice storm brought down power lines throughout the region, hardware stores were sold out of batteries and flashlights. However, within a couple of days, special deliveries brought in extra batteries and flashlights, and everyone who wanted to buy a flashlight or batteries was able to do so. Which of the following principles of economic interaction best describes this scenario?

1. Markets allocate goods effectively.
2. When markets do not achieve efficiency, government intervention can improve overall welfare.
3. All costs are opportunity costs.
4. There are gains from trade.

As more people buy computers, the demand for Internet service increases and the price of Internet service decreases. The fall in the price of Internet service decreases the supply of Internet service.” Explain what is wrong with this statement

For lunch, Maria eats only salads or vegetarian burgers. Her weekly food budget is $36. Each salad costs $6 and each vegetarian burger costs $3. When deciding how much of each good to buy, Maria knows that 2 salads and 4 vegetarian burgers will give her a utility of 8. What is Maria’s utility-maximizing point?

Q1. According to the research by Daron Acemoglu and Pascual Restrepo on 'The race between machines and humans: Implications for growth, factor shares and jobs'

A) labor will be replaced by machine automation in the next 30 years in the United States.

B) new occupations with complex tasks have emerged as complementary to the new capital, which replaces at the same time labor through automation.

C) labor will be replaced by machine automation in the next 60 years in the United States.

D) new occupations with complex tasks will completely replace automation devices and capital.

Q2. International trade

A is one of the factors that can help to explain the widening of income inequality in the United States.

B can explain less than 5% of the increase in income inequality, according to estimates by Robert Feenstra.

C doesn't lead to any gain for the United States.

D is the only factor that can help to explain the widening of income inequality in the United States.

Choose the best answer: When an economist or mathematician uses equations to calculate changing economic conditions, they use variables to simplify this process. What is a variable?

1. A part of the equation that remains constant and does not vary.

2.The name given to a quantity that can assume a range of values.

3.The part of the equation that is a verbal description of the problem.

The marginal social cost is equal to

1. Marginal economic cost

2. the cost of providing an additional unit of a particular good

3. both 1 and 2

4. neither 1 and 2

Eurasia, a small country has a market for widgets. The demand for widgets is described as P=50-5Q^D. The demand for widgets is described as P=10+3Q^S.

1. What are the equilibrium price and quantity in autarky?

2. Eurasia opens to trade. The world price for widgets is 20.  How much is imported into Eurasia?

3. Suppose a tariff of 2 is added. How much less is imported?

4. Show that Eurasia is better off without the tariff than with the tariff when they are trading.

What is the amount of 10 equal annual deposits that can provide five annual withdrawals when the first withdrawal of $3,000 is made at the end of year 11 and subsequent withdrawals increase at the rate of 6% per year over the previous year's withdrawal if
a) The interest rate is 8% compounded annually?
b) The interest rate is 6% compounded annually?

Before Sarah quit her job as a carpenter, she was earning $35,000 per year. She rented a building for $12,000 per year and opened a cabinet shop. She spends $148,000 per year for labor, materials, utilities, and advertising. Suppose that Sarah buys the building. Now how much will the business have to earn in order to break even in economic terms?

A fair distribution of income for the U.S. economy is

1. not an economic issue

2. defined by the Department of Agriculture

3. a positive economic question

4. a normative economic question

5. a state and local issue but not a national one

Suppose the nation of Alphonia was charged with dumping lawnmowers in the nation of Omegalon. The charge of dumping lawnmowers in the Omegalon market means that Alphonia was accused of:

a. selling faulty lawnmowers in Omegalon.

b. selling lawnmowers below-cost or below domestic prices.

c. selling counterfeit-branded lawnmowers in Omegalon.

d. discarding lawnmowers that would not sell in their home country.

1. Which of the following sequence of events follows an expansionary monetary policy?

A) ↑ interest rate → ↑ investment → ↓ total demand → ↑ real GDP

B) ↓ interest rate → ↓ investment → ↑ total demand → ↑ real GDP

C) ↑ interest rate → ↓ investment → ↓ total demand → ↓ real GDP

D) ↓ interest rate → ↑ investment → ↑ total demand → ↑ real GDP 

2. The Fed's efforts to stimulate and make the economy grow to require that the Fed:

A) sell bonds to raise the interest rates.

B) sell bonds to lower the interest rates.

C) buy bonds to lower the interest rates.

D) buy bonds to raise the interest rates.

3. An appreciation of the U.S. dollar will likely cause U.S. exports to ________ and U.S. imports to ________.

A) decrease; decrease

B) increase; decrease

C) increase; increase

D) decrease; increase

If you take national income and add transfer payments, then subtract income earned but not received, the result will be

A. net national product.

B. personal income.

C. wages.

D. disposable personal income.

Suppose country A can produce 10 units of corn per year or 2 machines per year. Country B can produce 20 units of corn per year or 10 machines per year.  Show that country A is better off producing only corn and trading with country B.  Use a graph in your answer.

Economics hw

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(9 points) Profit Maximization

Your firm runs a price-taking firm selling stylish cotton face masks (packs of 5). The market price for this good is $19.76. Your firm’s cost function is TC(Q)=0.000002Q^3+$8Q+$10,976

A. (3 points) Calculate the profit-maximizing quantity that you produce.

B. (3 points) What price will your firm charge?

C. (3 points) Calculate your firm’s profits at the profit-maximizing quantity.

(Market Equilibrium).

Aggregate market supply and demand for good X are the following:

Q_d (P)=1040-15P

Q_s (P)=25P           

a. (6 points) Calculate the equilibrium price and quantity

If Hamburger Helper is an inferior​ good, then, ceteris paribus​, a decrease in income will lead to?

A. rightward shift of the supply curve of Hamburger Helper.

1. Suppose a particular consumer has 8 birrs to be spent on two goods, A and B. The unit price of good A is 2 birr and the unit price of B is 1 birr. The marginal utility (MU) she gets from the consumption of the goods is given below.

1. Based on the cardinal analysis, what is the combination of the two goods that gives maximum utility to the consumer?
2. What is the total utility at the utility maximization level?
   
   

Other things equal, which of the following might shift the demand curve for gasoline to the left?

A. The discovery of vast new oil reserves in Montana.

B. The development of a low-cost electric automobile.

C. An increase in the price of train and air transportation.

D. A large decline in the price of automobiles.

(9 points) Profit Maximization

Your firm runs a price-taking firm selling vacuum cleaners.  The market price for vacuum cleaners is $90. Your firm’s cost function is TC(Q)=0.0075Q^2+$33Q+$58,300

A. (3 points) Calculate the profit-maximizing quantity that you produce.

B. (3 points) What price will your firm charge?

C. (3 points) Calculate your firm’s profits at the profit-maximizing quantity.

Assume a competitive firm faces a market price of ​$100​, a cost curve​ of : C​ = 0.003q³​ + 25q ​+ 750​, and a marginal cost curve ​ of: MC​ = 0.009q² + 25. If a specific tax of ​$8 per unit is​ implemented, what would be the new equilibrium output​ level?

AP Classroom: Assume an economy produces two goods, capital goods, and consumer goods. If the production of capital goods increases in the current period, which of the following will occur for the current future production (PPQ) for consumer goods and capital goods?

Question 1: Assume we are given a demand schedule that is represented by P = 200 - 5Q and a supply schedule where P = 110 + 10Q, where P = Price and Q = Quantity. What are the equilibrium price and quantity (show all of your work)?

Question 2: Dairies make low-fat milk from full-cream milk. In the process of making low-fat milk, dairies produce cream, which in turn makes ice cream. In the market for low-fat milk, the following events occur:

a) The wage of dairy worker rises

b) The price of cream rises

c) The price of low-fat milk rises

d) A new technology lowers the cost of producing ice cream

e) Dairy farmers switch some of the production of full-cream to vegetables, based on input from health research studies.

Explain the effects of each of the above events on the supply of low-fat milk.

1. Given the following data, answer questions. Compute GDP, NDP, NI, and DI if PI is $740

NOTE: Use both the expenditure and the income approaches for # 1.  

Personal taxes……………30              Gross private domestic investment………….145

Depreciation……………..40               Corporate income taxes………………………65

Transfer payments…….....35          Undistributed income………………………...45

U.S. exports……………..12               Compensation for employees……………….540

Dividends………………..37                Indirect business taxes……………………...105

Corporate profits……….147            Personal consumption expenditure…………630

Rents…………………….10                  Social security contributions……………….110

Interest..   ……………… 38              Federal government purchases……………..140

U. S. imports……………..7               State & local government purchases………..50

Proprietors’ income……..90

2. Given the following data, compute GDP, NDP, and NI

Personal consumption expenditure………………….219.1               

Personal taxes………………………………………...40.5

U.S. exports of goods & services…………………….17.8                

Transfer payment…………………………………….13.9

Net private domestic investment……………………..42.1              

Depreciation………………………………………….11.8

Government purchases……………………………….59.4                

Rents………………………………………………......5.0

U.S. imports of goods & services…………………....20.5

Interest...……………………………………………...12.6

Indirect business taxes………………………………..16.6   

 3. Given the following income data, answer questions #1 and #2 properly.

Year                 C                       Ig                     G                     Xn                                GDP

  1              $ 3971.62              $800.20         $1235.38          $ --20.00        =       $_________

  2              $ 5407.02            ------------          1580.51             --40.36        =                8318.48

  3              $ 5584.65             1390.52         --------------              89.33       =                8708.44

a. Fill- in all the missing blanks.

b.  How big/small is the size of C, G, and Ig out of Year2 GDP?

Who might care about price elasticity of demand and why?

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Let's figure out how long it will take for the average Indian to be as wealthy as the average western European is today. Note that all numbers readjusted for inflation, so we're measuring output in piles of stuff, not piles of money. India's GDP per capita is $3,000 and let's say that real output per person there grows at 5 percent per year. Using the rule of 70, how many years will it take for India to reach Italy's current level of GDP per capita, about $24,000 per year?

1. A positive statement is one which is:

a. derived by induction.

b. derived by deduction.

c. subjective and is based on a value judgment.

d. objective and is based on facts

2. The invisible hand refers to the:

a. fact that the U.S. tax system redistributes income from rich to poor.

b. notion that, under competition, decisions motivated by self-interest promote the social interest.

c. tendency of monopolistic sellers to raise prices above competitive levels.

d. fact that government controls the functioning of the market system

3. Innovation lagged in the centrally planned economies because:

a. there was too much domestic business competition.

b. there was too much competition from foreign firms.

c. enterprises resisted innovation out of fear that their production targets would be raised.

d. exports had to equal imports for the plan to work.

a.  Suppose you want to remove ten fish of an exotic species that have illegally been introduced to a lake. You have three possible removal methods. Assume that q1, q2, and q3 are, respectively, the amount of fish removed by each method that you choose to use so that the goal will be accomplished by any combination of methods such that q1 + q2 + q3 = 10. If the marginal costs of each removal method are, respectively, $10q1, $5q2, and $2.5q3, how much of each method should you use to achieve the removal cost-effectively?
b. Why isn’t an exclusive use of method 3 cost-effective? 
c. Suppose that the three marginal costs were constant (not increasing as in the previous case) such that MC1 = $10, MC2 = $5, and MC3 = $2.5. What is the cost-effective outcome in that case?