ECN 101- Final Exam Guide - Comprehensive Notes for the exam ( 28 pages long!)

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28 Mar 2018

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The budget line: attainable + unattainable combinations, trade-offs + opportunity costs, choice. Slope of the budget line is the ratio of the prices. Scarce resources (factors of production) land labour: human capital. E(cid:374)trepre(cid:374)eurs" e(cid:272)o(cid:374)o(cid:373)i(cid:272) fu(cid:374)(cid:272)tio(cid:374)s: takes initiative, makes business decisions. Firms objective: maximize profit, decide how much to produce illustrate production choices. Assumptions full employment (no wasted resources) fixed resources fixed technology. Human capital capital possessed through human abilities ex. Capital goods- goods used in production process that are not workers ex. Unemployment, growth & future: economy might not be operating at full employment, points inside the production possibilities curve, a move toward full employment. = increase labour force = advancement in technology. A qualification: international trade: nation not necessarily limited to the combination of output indicated by its production curve. International specialization: production of items w lowest opportunity cost, trade.

Related Questions

Required:

Compare and contrast (find the similarities and differences) in the labor law of GCC countries, including the UAE, according to major legal issues such as priority of employment, similarities or differences in the treatment of women, minors, expatriates, working hours, wages, leaves, working hours, etc. You may search for additional information about the labor laws in these countries. Based on your readings, are there significant differences when compared to UAE Labor Law?

Specifics of Labor Law in GCC Countries

Bahrain

An employer is required to give priority of employment to Bahraini nationals and thereafter to other Arab nationals, wherever they are available and possess the requisite skills and competence for the role. For some businesses, there is a mandatory minimum ratio of the number of Bahraini nationals to the number of non-Bahraini nationals.

Employers are under a statutory duty not to discriminate between Bahraini and non-Bahraini nationals in particular with regard to pay (except to the extent necessary to attract foreign employees); or subject any employee to any other form of detrimental treatment.

The employment contract should include the terms of employment agreed by the parties and may be entered into for a fixed term, or for an indefinite duration terminable on notice; or for the execution of a specific project. The employment contract outlining the terms and conditions of employment must be in writing. It must comply with the Bahrain Labor Law for the Private Sector of 1967 as amended and any relevant laws, regulations and orders. Any term or condition in the contract which does not conform to the Bahraini law will be deemed null and void except to the extent it is more favorable to the employee.

Employers must register their employees in the Kingdom of Bahrain with the Ministry of Labor and Social Affairs and receive a certificate of registration. It must also register its employees with the General Organization for Social Insurance (GOSI) and contributions must be paid monthly for compulsory insurances against old age, disability and death (for Bahraini employees only), and against work-related injuries including death (for all employees). Employers may also want to consider non-compulsory insurances such as private medical or life insurance.

Wages are defined as total remuneration payable in cash or in kind to an employee under an employment contract and will include additional increments, gratuity payments and allowances, if any (bonuses, commissions, transport allowance, accommodation allowance, cost of living allowance and other allowances and benefits will all be included if they are paid by the employer to the employee as part of the employeeâs wages). The general rule is that an employer cannot exclude specific payments from the calculation of the wages in the contract as any such exclusion will not be enforceable under local law. However certain payments such as phone bills, company car costs and rent (if paid directly to the Landlord rather than to the employee) may be excluded from the definition of wages. Orders are issued from time to time setting minimum wages in particular industry sectors. There is however no national minimum wage.

An employee cannot be required to work for more than six days in any given week and Fridays are deemed to be the weekly day of rest on full pay. The employee is also entitled to leave for official public holidays. Where such public holidays occur on a Friday, the employer must compensate the employee with one (1) further day of rest. The employer may require an employee to work on public holidays or on Fridays, subject to the provisions of local law. All employees are entitled to a minimum of 21 days paid annual leave rising to 28 days after 5 years of service. An employee may not waive this entitlement, postpone it, or receive payment in lieu except in accordance with the law and on termination of employment. In the event of illness which is certified by an approved doctor or hospital, an employee is entitled to a total of forty-five absences in each year of employment. A Muslim employee, employed for five consecutive years, will be entitled to leave of two weeks on full pay once during his/ her period of employment to perform his/ her âHajâ pilgrimage duty.

Kuwait

An employeeâs terms of service are contained in his employment contract, which may be for a fixed time or it may be indefinite. A fixed time may not exceed five years. The labor law specifies minimum limits below which terms of service may not fall, and if a clause in his contract gives an employee a lesser benefit than his right under the law, he is entitled to the minimum specified by law for that particular term.

An employment contract may be verbal or in writing. Where a contract is verbal then, in the event of a dispute, either side can use circumstantial evidence to prove what is in it. If the contract is in writing, it must be in Arabic. A translation into another language may be attached but the Arabic version is authoritative, i.e. only the Arabic version will be considered in resolving a dispute in a court of law.

An employee may be hired on probation for 100 days at most. During this time he may be terminated without notice, though accrued indemnity but not holding pay must be paid. The same employer may not put an employee on probation more than once.

Remuneration includes basic pay, incentives, commissions, obligatory bonuses, gratuities from third parties and allowances from whichthe employee benefits (such as housing allowance), but excludes allowances on account of expenses and profit shares, Payment of a bonus is obligatory if it is stipulated in the contract of employment or in the by-laws of the firm or it has been paid in the same amount regularly every year. What is included in total remuneration is important, as this is the Figure that must be used when calculating terminal indemnity or compensation on account of injury. Where an employee is paid on a time basis the last salary payable is used, but if he is paid on a piece-work basis than the average wage actually payable to him during the previous three months is used.

There is no minimum wage. Salaried employees must be paid at least once a month. Piece-workers and those on hourly or weekly wages must be paid every two weeks.

Persons working for a subcontractor, who has failed to pay their salaries, may demand payment from their employerâs superior contract to the extent that the latter owner their employer money for work done. When an employer goes bankrupt the outstanding salaries and termination benefits of his employees must be paid before his other creditors.

An employee may not be obliged to buy products made by his employer, if he owes his employer money than not more than 10% of his salary may be deducted to pay off his debt and he may not be charged interest. Where an employeeâs Salary is attached on account of debts to third parties, the deduction is limited to 25 % of his salary.

The working hours of an adult are limited to eight hours a day and 48 hours a week. A rest break of at least one-hour must be allowed after five consecutive hours of work. Rest periods are not included in the calculation of working hours. These standard hours may be increased or decreased by the MSA&L in certain cases, such as hotel works.

An employee is entitled to one full day off with-out pay a week. The traditional day off is Friday, but this is not a legal requirement in Kuwait. An employee with up to five years of continuous service is entitled to 14 days leave a year on full day, provided he has completed one year of services, and 21 days after more than 5 years of continuous service. Official holidays and days of sick leave may not be counted a part of annual leave. The employer has the right to fix the date of leave.

An employee must be given his holidays pay before he goes on leave and the last salary payable before the holidays must be used to calculate the amount due. If an employeeâs services are terminated that he is entitled to acash payment in lieu of accumulated leave, irrespective of the number of years of leave due, and payment for the accumulated leave must be calculated on the basis of the last salary payable on the date of termination.

A women performing the same work as a man must be paid equal remuneration. The standard working hours for women are the same as for men. They may not work at night (7pm to 6 pm) except in clinics, pharmacies, hotels, nursery schools, homes for the handicapped, airline and tourist offices, theaters and Entertainment City. They may work up to midnight in cooperative societies and public utilities, beauty salons, tailoring shops, banks and offices. Night-time working hours may be extended by the MSA&L during Ramadan, and on Eids and public holidays. Employers are obliged to ar-range transport for women working at night. A woman is entitled to maternity leave to a maximum of 30 days prior to delivery and 40 days after delivery on full day. Thereafter she may be absent from work without pay for up to 100 consecutive or non-consecutive days, provided she presents a medical certificate stating that she is ill as result of gestation and parturition. The annual leave entitlements of a woman who makes use of her maternity for leave privileges in any year are forfeit on day-per-day basis until her annual leave entitlement for that year is extinguished.

When his employment is terminated, an employee is entitled to a lump sum payment called termination indemnity.

For those paid monthly, termination indemnity is 15 days remuneration for each complete year of service for first 5 years and 30 days for each complete year beyond 5 years, but the total indemnity is limited to one and a half yearâs remigration. For piece-rate workers and those paid on an hourly, daily or weekly basis, the indemnity is 10 days remuneration for each complete year of service for the first 5 years, and 15 days pay for each complete year beyond 5 years, subject to a limit of one yearâs remuneration. In both cases part years are calculated pro-rata.

An employee who resigns with less than five years of service is not entitled to indemnity. One who resigns with five years or more of services is entitled to 50% indemnity. But employees are more made redundant (irrespective of length of service), who reach retirement age, who are disabled at work, or who die are entitled to full indemnity. And woman who marriage while she is an employee and who resigns within six months of marriage is entitled to full indemnity.

All employeesâ related regulations must be issued as circulars or bulletins written in Arabic. Miscreant employees may be penalized provided the employee issued regulations specifying the acts that are punishable. Where an employment contract is for a fixed period, it terminates automatically at the end of the period, but if both parties then continue to implement it, it is deemed to be renewed indefinitely under the same terms and conditions. If both parties terminate the contract before the end of the fixed period and there is no clause in the contract to cover this, then the party terminating the contract must compensate the other. Where termination is made by the employer, compensation is limited to wage the employee would have earned from the day of termination to the expiry of his contract. Where it is the employee who quits, compensation is limited to the employerâs actual loss. Where an employment contract is for an unlimited period, either party may terminate it by notifying the other in writing at least 15 days prior to termination (Where the employee is paid more frequently). Either party may pay the other 15 or 7 days salary, as appropriate, in lieu of notice.

Oman

Investor Visa is granted to a foreigner who intends to invest his money in Oman and pursuant to a certification in this respect from the authority concerned. - This visa can be used within six months from the date of its issuance. - It is a multiple-entry visa valid for staying in the country for two years from the date it is inserted in the passport. This period is renewable.

Oman, like most other GCC states has adopted minimum employment quotas for companies in favor of Omani nationals (Omanisation). The required approval to employ foreign workers is generally only granted if the company meets the established quotas. The required quotas vary from industry to industry. The minimum wages payable to Omanis is RO 140 (about US $ 360) per month including house and transport allowances. Apart from that as per the Social Security Law private sector employer must make monthly contributions to the Public Authority for Social Insurance at the rate of 9.5 % of the monthly wage.

Qatar

The relationship between an employer (other than the government and its corporations) and its employee (skilled or unskilled) is regulated by the Labor Law. The Labor Law No. 14 of 2004 mandates that an employment contract must be drawn in the Arabic language. Another language may be used besides Arabic, but the Arabic text will prevail. A working week may consist of up to six business days. Ordinary working hours may not be more than eight hours a day, except during the Islamic month of Ramadan in which the normal working hours are reduced to no more than six a day. The term of an employment contract may be of an indefinite duration or of a limited period, provided that the term does not exceed 5 years. Any stipulations contrary to the provisions of the Labor Law are void unless more advantageous to the employee. The Law provides a framework for forming worker's committees in organizations in which the number of Qatari workers is not less than hundred.

Saudi Arabia

With regard to their employees, foreign contractors are subject to terms of employment of the Saudi Labor Law ("Labor Law"), which regulates all fundamental aspects of the relationship between employer and employee. These include in particular working hours and conditions, leave, termination and (relative) employment protection and various contracts and due diligence requirements of the employer. The labor laws in part directly relate to residence law provisions. Foreign workers only receive a (temporary) residence permit if, as in Germany, they have a work permit. The Labor Law sets exemptions to its application, especially for foreign workers who are sent earmarked for no more than two months to Saudi Arabia.

Employment law disputes can be carried forward by the employee to the Labor Inspection("LaborOffice"), if it is not possible to reach an amicable agreement, the Labor Office refers the case to the Labor Court ("Labor Dispute Committee").Trade unions and workers associations are prohibited by law, strikes are illegal.

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Lonely Planet In 1972, Tony and Maureen Wheeler were newlyweds who decided to have one last adventurous travel experience before settling down. Their trip was an overland trek from London to Australia through Asia. So many other travelers asked them about their experiences that they sat down at their kitchen table and wrote a book titled Across Asia on the Cheap. They published the book themselves and were surprised by how many copies they sold.

More than three decades and 60 million books later, their publishing enterprise has turned out to be one of the most successful in history. The Wheelers%u2019 publishing company, Lonely Planet, has grown rapidly, with typical annual sales increases of 15 percent or more. In 2007, BBC Worldwide purchased a 75 percent ownership interest in the company and purchased the rest of the company%u2019s stock in 2011.

Lonely Planet TV now produces a variety of travel and documentary programs that appear on cable networks throughout the world. As a BBC subsidiary, the company does not release sales figures, but industry analysts estimate current annual revenues to be about $110 million. Lonely Planet publishes more than 600 titles and holds a 20 percent share of the travel guide market. The company has more than 450 employees in its U.K., U.S., French, and Australian offices performing editorial, production, graphic design, and marketing tasks.

Travel guide content is written by a network of more than 200 contract authors in more than 20 countries. These authors are knowledgeable about everything from visa regulations to hotel prices to the names of the hottest new entertainment spots. The combined expertise of the in-house staff and the in- country authors has kept Lonely Planet ahead of its competitors for many years.

Lonely Planet also offers travel services that include a phone card, hotel and hostel room- booking, airplane tickets, European rail travel reservations and tickets, package tours, and travel insurance. These services are sold by telephone and on the Lonely Planet Web site. The Web site has won numerous awards, including the Society of American Travel Writers Silver Award and a spot on Time magazine%u2019s %u201CFifty Best Web Sites%u201D list.

The site was launched in 1994 and includes an online store in which Lonely Planet publications are sold. However, the site%u2019s main draws are its comprehensive collection of information about travel destinations and its online discussion area, the Thorn Tree, which has nearly a half million registered users. The company has had trouble turning any of this information into a source of revenue generation. Despite its excellent Web site and its use of new technologies, most of Lonely Planet%u2019s revenues are still generated by book sales.

The typical production cycle of a travel guide is about eight months long. This is the time it takes to commission authors, conduct research, work through several drafts of writing and editing, select photos, create the physical book, and print it. This production cycle causes new books to be almost a year out of date by the time they are published. Only the most popular titles are revised annually. Other titles are on two-, three-, or four-year revision cycles. The time delay in publication means that many details in the guides are outdated or wrong; restaurants and hotels close (or move), exchange rates and visa regulations change, and once hot night spots are abandoned by fickle clientele. Lonely Planet publications are well researched and of high quality, but the writers do not work continually because the books are not published continually.

The Web site often has information that is more current than the published travel guides. The site%u2019s online shop does offer some custom guides, which are parts of its existing travel guides packaged in different ways, and it does let customers buy specific chapters from its books, but it still is largely focused on selling books, although the site does offer PDF files that can be downloaded to mobile devices. Lonely Planet has adopted some new technologies, but has not used them to change its revenue model in any major way or to make basic changes in the production of its main product, the travel guides.

Required: 1. Review the company%u2019s offerings for Apple iPhone and iPad products and for Android smart phones (Trippy). Evaluate those products and identify opportunities for other products or services that the company could offer for mobile devices that would take advantage of Internet technologies (including wireless technologies for mobile devices) and address customers%u2019 concerns about the timeliness and currency of information in the printed travel guides.

2. Prepare a report in which you analyze the marketing channel conflicts and cannibalization issues that Lonely Planet faces as it is currently operating. Suggest solutions that might reduce the revenue losses or operational frictions that result from these issues.

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1) Which of the following transactions would be included in GDP?

a) The purchase of a Monet painting.

b) The purchase of paper clips.

c) The purchase of Telstra shares.

d) The purchase of a used car.

2) Economics is the study of

a) the choices everybody makes to attain their goals, given their scarce resources.

b) supply and demand.

c) how to make money in a market economy.

d) how to make money in the stock market.

3) The economy is considered to be at full employment when

a) all unemployment is voluntary.

b) all unemployment is frictional or structural.

c) there are no unemployed workers.

d) there are more unemployed workers than job vacancies

4) An example of an intermediate good would be

a) a can of cool drink sold by a super‐market.

b) a microwave used at home.

c) the bread that goes into a sandwich sold by a lunch bar.

d) the petrol purchased by consumers for their cars

5) From 2004 to 2005, the CPI for medical care increased from 260.8 to 272.8. What was the inflation rate for medical care?

a) 12 percent

b) 11.1 percent

c) 4.9 percent

d) 4.6 percent

6) A shift outwards of the nation's production possibility frontier can occur from

a) a reduction in unemployment.

b) an increase in the size of the labour force.

c) a change in the amounts of one good desired.

d) a natural disaster like a hurricane or severe earthquake

7) What assumptions about humans do economists make?

a) People are greedy and selfish.

b) None, because economics takes humans as given.

c) People are rational and respond to incentives.

d) Humans prefer to live in a society that values fairness above all else.

8) The labour force is the

a) a number of people employed minus the number of people unemployed.

b) ratio of the number of people employed by the number of people unemployed.

c) ratio of the number of people employed to the working-age population.

d) the number of people employed plus the number of people unemployed.

9) The production possibility frontier shows

a) attainable combinations of two products that may be produced with available resources.

b) the various products that can be produced now and in the future.

c) what an equitable distribution of products among citizens would be.

d) the rate of substitution between capital and labour.

10) Which of the following transactions would be included in the official calculation of GDP?

a) Bridgestone sells $2 million worth of tyres to General Motors Holden

b) You illegally download music off the Internet to put on your new iPod.

c) A new iPod.

d) A student buys a used textbook at the bookstore.

11) What are the three fundamental questions that any economy must answer?

a) What will be the prices of goods, how will these goods be produced, and who gets them?

b) What will be the prices of goods, what will be produced, and who gets them?

c) What will be produced, how will these goods be produced, and who gets them?

d) How much will be saved, what will be produced, and how can these goods be fairly distributed?

12) If the nominal interest rate is 6% and the inflation rate is 2%, then the real interest rate is

a) 3%.

b) 2%.

c) 4%.

d) 8%.

14) Suppose that a very simple economy produces three goods: movies, burgers, and bikes. Suppose the quantities produced and their corresponding prices for 2004 and 2009 are shown in the following table:

	2004		2009
	Quantity	Price	Quantity	Price
Movies	20	$6	30	$7
Burgers	100	$2	90	$2.5
Bikes	3	$1000	6	$1100

What is real GDP in 2009, using 2004 as the base year?

a) $3690

b) $7035

c) $6360

d) $3320

15) If the production possibility frontier is graphed as a straight line, what does this mean?

a) Opportunity costs are constant as production shifts from one product to the other.

b) It is easy to efficiently produce output.

c) Nothing, there is no significance of a straight line production possibility frontier.

d) Opportunity costs are increasing as production shifts from one product to the other.

16) If you have both an economics exam and a management exam tomorrow, but find that you have time to fully study for only one of them, what are you facing?

a) A failing grade in both exams

b) A zero opportunity cost

c) A trade‐off

d) An impossible situation

17) Which of the following is a problem inherent in centrally planned economies?

a) Production managers do not satisfy consumer wants but the government's orders.

b) Too much production of low‐cost, high‐quality goods and services.

c) There are no problems, everyone, including consumers are satisfied.

d) None of these describe the problem inherent in a centrally planned economy.

18) Inflation is an increase in the

a) average hourly wage rate.

b) general price level in the economy.

c) the overall level of economic activity.

d) rate of growth of GDP.

19) Total production in the economy is measured as the

a) dollar value of all final goods and services produced in the economy.

b) the total number of services produced in the economy.

c) the total number of goods produced in the economy.

d) the total number of goods and services produced in the economy.

20) An increase in the price of dairy products produced domestically will be reflected in

a) Both the GDP deflator and the consumer price index.

b) Neither the GDP deflator nor the consumer price index.

c) The GDP deflator but not in the consumer price index.

d) The consumer price index but not in the GDP deflator.

21) The reason that opportunity cost arises is that

a) money has proven to be an inefficient means of facilitating exchange in a market.

b) sometimes there are no alternative decisions that can be made.

c) resources are limited at any point in time. d) people have unlimited wants.

21) You have an absolute advantage whenever you

a) are better educated than someone else.

b) can produce something at a lower opportunity cost than others.

c) can produce more of something than others with the same resources.

d) prefer to do one particular activity.

22) Which of the following is an example of a worker experiencing cyclical unemployment?

a) A Freightliner employee who was sacked because of a recession.

b) A worker who quits his job because he does not get along with his boss

c) A worker that changes jobs to move closer to her family.

d) An assembly line worker who loses his job because of automation.

23) A company named Home Depot sells new and used doors to contractors who build new homes. Home Depot also sells new and used doors to home‐owners. Which of the following would be counted in GDP?

a) The sale of a used door to a home‐owner

b) The sale of a used door to for construction for installation into a new home.

c) The sale of a new door to for construction for installation into a new home.

d) The sale of a new door to home‐owner.

24) If you buy shares, the dollar value is

a) not included in GDP.

b) included in GDP under consumer expenditure.

c) included in GDP as a business expense.

d) included in GDP under-investment.

25) During the 1930s, Australia and other industrialised countries experienced the Great Depression with a large number of workers and factories unemployed.Which of the following points on a production possibility frontier model would represent this experience?

a) A point on the frontier

b) A point inside the frontier

c) An increase in the opportunity cost of the substitution between capital and labour

d) A point outside the frontier

26) How is the decision about what goods and services will be produced made in a market economy?

a) The government decides on what will be produced.

b) Producing firms decide to produce only what the firms' owners say must be produced.

c) By consumers, firms, and government choosing which goods and services to buy.

d) What will be produced is determined by what society needs the most.

27) In the country of Shem, the CPI is calculated using a market basket consisting of 5 apples, 4 loaves of bread, 3 robes and 2 gallons of gasoline. The per‐unit prices of these goods have been as follows: Using 2002 as the base year, what was the inflation rate between 2003 and 2004?

a) 28.5 percent

b) 34.2 percent

c) 47 percent

d) It is impossible to determine without knowing the base year.

28) Given the following information, calculate the unemployment rate: Full‐time employed = 80 Part‐time employed = 25 Unemployed = 15 Discouraged workers = 5 Members of underground economy = 6 Consumer Price Index = 110

a) 18.8 per cent.

b) 12.5 per cent.

c) 16.7 per cent.

d) 25 per cent.

29) If the quantity of resources available is fixed, as more of a good is produced, the opportunity cost of producing it increases. The most probable reason for this is that

a) as more of a good is produced, the quality of technology available to produce additional units declines.

b) the price of the inputs used to produce the good will rise.

c) consumers are unwilling to pay higher prices to cover the increases in production costs.

d) resources are not equally well‐suited to producing all goods.

30) Which of the following is a normative statement?

a) The current high price of petrol is the result of strong worldwide demand.

b) The price of petrol is too high.

c) Larger vehicles always use more fuel per kilometre than smaller vehicles

d) The supply of petrol has not been able to meet the demand for petrol.

31) Transfer payments are not included in GDP because

a) they do not generate income.

b) their market value is difficult to measure.

c) they are not purchases of goods or services.

d) their value is included in government expenditure.

32) The opportunity cost of going to your economics class

a) depends on the cost of your transport getting to class.

b) is equal to the highest value of alternative use of the time.

c) is zero because there is no admission charged if you are enrolled in the class.

d) depends on the salary of the lecturer.

33) Establishing employment agencies that speeds up the process of matching unemployed workers with unfilled jobs are an attempt to lower

a) cyclical unemployment.

b) seasonal unemployment.

c) structural unemployment.

d) frictional unemployment.

34) Suppose that money GDP for 2009 was $15 000 billion and the price index was 150 and in 2010 money GDP was $17 050 billion with a price index of 155. What is the rate of economic growth?

a) 5%

b) 10%

c) 2%

d) 1%

35) An individual has a comparative advantage in activity whenever she

a) also has an absolute advantage in that activity.

b) can perform the activity at a lower opportunity cost than another person can.

c) can do everything better than everyone else can.

d) can do the activity in less time than anyone else.

36) GDP is not a perfect measure of wellbeing because

a) GDP is adjusted for increases in drug addiction.

b) GDP is not adjusted for the effects of pollution.

c) GDP is adjusted for changes in crime.

d) the value of leisure is included in GDP.

37) What does an entrepreneur do in a market economy?

a) Organise the factors of production in a working unit.

b) Stand to lose the personal funds provided.

c) Develop the vision for the firm and ensure funding for the firm.

d) An entrepreneur does all of these things.

38) An example of a transfer payment is

a) the purchase of a new government office block.

b) a teacher's pay is transferred electronically from the government to the teacher.

c) interest repayments on a loan.

d) an unemployment benefit.

39) Which of the following is a microeconomics question?

a) What will be the level of total production in the national economy?

b) How much income will be saved and how much will be spent on consumer goods?

c) What factors determine the price of computers in the market?

d) Why is the rate of unemployment rising?

40) The measure of production that values production using current prices is called

a) value-added GDP.

b) nominal GDP.

c) black economy GDP.

d) real GDP.

41) Which of the following causes the official measure of the unemployment rate to understate the true extent of joblessness?

a) People who collect unemployment benefits report themselves to be searching for a job.

b) Discouraged workers are counted as unemployed.

c) Discouraged workers are not counted as unemployed.

d) Many full-time workers really want to be part-time workers.

42) A production possibility frontier will shift inwards if

a) inefficiency in production processes arise.

b) there is an increase in the rate of unemployment.

c) productive resources are destroyed due to war.

d) all of these options are correct.

43) Structural unemployment would increase when

a) discouraged workers drop out of the workforce.

b) the economy enters a recession.

c) the number of individuals who quit their job to find another increase.

d) workers are replaced by machines and the workers do not have the skills to perform new jobs.

44) The 2005 CPI was 196 and the 1982 CPI was 96.5. If your parents put aside $1,000 for you in 1982, how much would you have needed in 2005 in order to buy what you could have bought with the $1,000 in 1982?

a) $1,834.20

b) $2,031.09

c) $2,308.89

d) None of the above is correct.

45) What is an economic model?

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ECN 101- Final Exam Guide - Comprehensive Notes for the exam ( 28 pages long!)

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