THE UNIVERSITY OF WESTERN ONTARIO
Economics 1022B - 002/004
J. Gillmore Review 4 April, 2012
1) A south sea island produces only coconuts.
In 2005, the price of a coconut is $2.00 and the quantity produced is 400.
In 2008, the price of a coconut is $1.50 and the quantity produced is 350.
2005 is the reference base year.
Real GDP in 2008 in terms of base-year prices is
2) Interest plus miscellaneous investment income is a component of which approach to measuring
A) Output approach.
B) Income approach.
C) Opportunity cost approach.
D) Expenditure approach.
E) Injections approach.
3) The unemployment rate is supposed to measure ________. It is an imperfect measure because
A) the underutilization of labour resources; it excludes some underutilized labour and some
unemployment is unavoidable
B) the percentage of the working-age population who are unemployed; it is impossible to count
everyone in the working-age population
C) the underutilization of labour resources; it includes part-time workers and excludes
D) the number of unemployed plus the number of marginally attached workers expressed as a
percentage of the labour force; it excludes the marginally attached workers because Statistics
Canada considers them as employed
E) the percentage of the labour force who are unemployed; it is impossible to count everyone in
the labour force
1 Use the table below to answer the following question.
Suppose a simple economy produces three goods only.
The price and output data for some selected years are shown below.
Price Price Quantity Quantity
(dollars) (dollars) (number) (number)
1998 2008 1998 2008
Pop 0.75 1.10 100 120
Crackers 1.25 2.10 300 280
Cucumbers 2.00 3.00 200 190
4) Refer to Table 1. The reference base period is 1998. The CPI in 2008 is
5) When the population increases with no change in labour productivity, employment ________ and
potential GDP ________.
A) increases; increases
B) increases; decreases
C) increases; does not change
D) decreases; decreases
E) decreases; increases
2 Use the table below to answer the following question.
Capital per hour Labour
Year of labour productivity
2007 600.0 400.0
2008 654.0 424.0
2009 719.4 466.4
6) Refer to Table 2. The table shows capital per hour of labour and labour productivity for the beach
economy of Whitepool. Whitepool follows a one-third rule. In the year 2009, what is the
contribution respectively of the increase in capital per hour of labor and the contribution of
technological change to the growth in labour productivity?
A) 10 percent; 0 percent
B) 3 1/3 percent; 6 2/3 percent
C) 5 percent; 5 percent
D) none of the above.
E) 0 percent; 10 percent
3 Refer to the figure below to answer the following question.
7) Refer to Figure 1. In Figure 1, the initial supply of loanable funds curve 0sd the initial
demand for loanable funds curve isDLF 0. An increase in th