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Homework Quizzes.pdf

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Department
Economics
Course
CAS EC 102
Professor
Jay Zagorsky
Semester
Spring

Description
Homework Quizzes Friday, February 7, 2014 6:49 PM Introduction 1. An example of a negative incentive is flunking all students who get less than 1/4 of the questions right 2. A key difference between Macroeconomicsand Microeconomicsis micro examines one individual's actions while macro examines the group 3. In a zero sum game, winners get their winnings from losers 4. A Mexico City attempt to ban cars from driving based on their ending license plate number was a negative incentive that did not work 5. Money is a signal of quantity is NOT a reason why money is important in macroeconomics Introduction Part II 1. If the news reports that country's economicoutput of goods and services has fallen by 3% over the past year then an economistwould say this is a positivestatement 2. The key economicdifference between a capitalist system and a socialist system is in a socialist system,the governmentowns the key businesses while individuals own smaller less important businesses; in a capitalist system,individuals own almostall businesses 3. Communismcan potentially exist under monarchy,dictatorship and or participatory democracy 4. An example of a positiveincentive that could ensure that business managers do not break rules is stock bonuses paid ten years after a leader leaves a company 5. Items, like fresh fruit, which last only a few days and then can no longer be sold are always a good World Population 1. Some policies that countries have enacted to decrease the number of children are forced sterilization 2. Laws which force people to wear a seat belt, use a helmet while driving a motor cycle, and obey the rules of the road all save lives. Which person would be mostin favor in these laws? Michael Kremer 3. The UN created a chart of world population from 500 BC to the year 2300. The graph shows population reaching about 10 billion people. Once it reaches 10 billion, the population will first dip, and then rise back to 10 billion. The creator of this graph believes in Malthus' theory 4. The US coversroughly 3.5 million square miles. This means the population density is approximately around 90 people per square mile 5. If population grows slower than output, then the amount of resources consumed by the average person rises Social Security 1. The Social Security program in the US is an intergenerational transfer program that takes money from current workers and transfers it to current retirees 2. Social Security system is expected to face financial difficulties in the near future due to the number of workers paying into the system is expected to decline relative to the number of retirees collecting benefits 3. A person is expecting over the next 40 years to work for many companies,some of which will likely to pay a lot and some probably very little. In general, economistsexpect this person prefers defined contribution retirementplan 4. The dependency ratio tracks number of retirees supported by each worker 5. Many politicians jokes that Social Security is the 3rd rail in US politics (touching the 3rd rail kills the person) because the program provides money to a very large percentage of the US' population and any changes would impact huge numbers of voters Supply and Demand Supply and Demand 1. Income effect means that when the price of an item goes down, you effectivelyhave moremoney, which could lead you to buy more of the item or more of a different item 2. In English auctions, the price shouted by the auctioneer rises, while in Dutch auctions, the price falls 3. As the Alberta oil sands projects came on line, these investmentscaused the supply curve to shift, helping moving the price of oil down 4. In a supply demand graph with the quantity of cars on the horizontal axis, and the price of cars on the vertical, we expect news of a problem with a car's quality to shift demand curve downward
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