devry econ312n Week 4 homework latest 2016 July.

1) Why is income inequality in America so? pronounced? Consider education

?Outsourcing, immigration, and the gains of the? super-rich are the most common reasons for the income inequality in America. Tyler Cowen? disagrees: The problem is largely the lack of education. To? date, outsourcing is not yet common enough to have much effect. Immigration? doesn't account for much of the change in the wages paid to unskilled workers since 1950. Advances in technology raises the incomes of highly skilled workers. Inequality will be reduced if more people undertake education.

Read the news? clip, then answer the following question.

If outsourcing were to have a big effect on the personal distribution of income in the United? States, how would the distribution? change?

The distribution of income would become more? ________ and the percentage of total income received by the? ________ would? ________.

A. ?equal; poorest 20? percent; increase

B. ?unequal; richest 40? percent; decrease

C. ?unequal; poorest 40? percent; increase

D. ?equal; richest 20? percent; decrease

E. ?unequal; poorest 40? percent; decrease

2) Indicate all the items in the following list that are not factors of production and explain why.

Item a?: Vans used by a baker to deliver bread

Item b?:? 1,000 shares of Amazon.com stock

Item c?: Undiscovered oil in the Arctic Ocean

Item d?: A bulldozer

Item e?: A soda

Item f?: The Attorney General

A. Item b because it is just a piece of paper and item c because it? isn't available to produce goods and services. All other items in the list are factors of production.

B. Item f??because the Attorney General has many assistants.

C. Item e only because it is a consumption good.

D. Items ?a, d, and f because they are productive resources used to produce goods and services long dash—?land, ?labor, capital, or entrepreneurship.

E. Items ?b, c, and e because they are not productive resources used to produce goods and services long dash—?land, ?labor, capital, or entrepreneurship

3) Which of the entries in the list below are capital? goods?

An interstate highway

An airplane

A schoolteacher

A stealth bomber

A garbage truck

A pack of bubble gum

A strawberry field

A movie

An ATM

President of the United States

4) The table on the right shows the personal distribution of income in the United States in 2009.

If everyone in the United States were to consume an equal quantity of goods and? services, what percentage of total income would the poorest 20 percent of households have to receive from? higher-income groups? What percentage would the second poorest have to? receive?

The poorest 20 percent of households would have to receive 16.6 percent.

The second poorest 20 percent of households have to receive 11.4 percent.

5) In the African nation of? Senegal, to enroll in school a child needs a Birth Certificate that costs? $25. This price is several? week's income for many families.

Because of this requirement we would expect to see? _______.

A. the education system in Senegal to disappear

B. slow growth of human capital in Senegal and particularly slow growth in the human capital of girls and women.

C. an increase in the human capital of girls and women because girls and women prefer academic jobs to manual labour jobs and more families will be willing to pay for a? girl's Birth Certificate than for a? boy's Birth Certificate

D. an increase in the growth of human capital in Senegal because when families are forced to buy a Birth Certificate to enroll their children in? school, the children will work harder at their studies

E. an increase in human capital in Senegal because families will work longer hours to raise the? $25 needed to buy a Birth Certificate

6) Compare the scale of agricultural production in the advanced and developing economies.

Agricultural production as a percentage of total production is higher in ______________ economies.

The total amount of food produced is greater in _______________ economies.

7) Poor India makes millionaires at fastest pace

?India, with the? world's largest population of poor? people, also paradoxically created millionaires at the fastest pace in the world. Millionaires increased by 22.7 percent to? 123,000. In? contrast, the number of Indians living on less than a dollar a day is 350 million and those living on less than? $2 a day is 700 million. In other? words, there are? 7,000 very poor Indians for every millionaire.

Read the news? clip, then answer the following question.

Why might incomes of? $1 a day and? $2 a day underestimate the value of the goods and services that these households actually? consume?

A.?$1 a day and? $2 a day is an estimate. No household could exist on this income.

B. Most households living on? $1 or? $2 a day produce and consume much of their own food and clothing.

C.A dollar buys more in India than in the United States.

D. Prices are lower in India than in the United States.

E. Both C and D are correct.

8) In which of the flows in circular flow model does each transaction occur.

You buy a coffee at Starbucks.

The government buys some Dell computers.

A student works at Kinko.

Donald Trump rents a building to Marriot hotels.

You pay your income tax.

9) How do the actions of governments modify what?, how?, and for whom goods and services are? produced?

?Where, in the circular flow? model, do those choices? appear?

The actions of governments modify what?, how?, and for whom goods and services are produced for two? reasons:

(1) ?they ________________________________ and

?(2) they _______________________________________________.

Government activities appear in the circular flow model as _____________________________ through the goods market and as _________________________households and governments and between firms and governments.

10) The supply of luxury boats is perfectly? elastic, the demand for luxury boats is unit? elastic, and with no tax on luxury? boats, the price is ?$44 million and 440440 luxury boats a week are bought.

Now luxury boats are taxed at 2020 percent.

After the tax is? imposed, the buyer pays? ______ for a luxury boat??

A. ?$4 million

B. ?$4.80 million

C. ?$0.80 million

D. ?$4.40 million

E. ?$440 million

Choose the statement about the tax incidence that is correct..

A. The buyer and the seller split the tax evenly.

B. The buyer pays all of the tax.

C. The seller pays all of the tax.

D. It is impossible to know how the tax is split between the buyer and the seller.

E. The tax reduces the quantity of luxury boats sold to? zero, so there is no tax.?

The government raises tax revenue of ?$____________ million.

11) The graph shows the market for luxury boats. The government decides to tax luxury boats 2020 percent. Draw a shape that represents the excess burden of the tax.?

The tax is? ______ because at the quantity produced ? ______.

A. ?inefficient; marginal benefit exceeds marginal cost

B. ?efficient; the seller receives the price the buyer pays

C. ?efficient; marginal benefit exceeds marginal cost

D. ?inefficient; marginal cost exceeds marginal benefit

E. ?efficient; marginal cost exceeds marginal benefit

12) The graph shows the market for apartments in Harrisburg, Pennsylvania.

If the city government imposes a rent ceiling of ?$1,200 a? month, what is the rent and how many apartments are rented in Harrisburg Pennsylvania??

The rent is ?$______ a month and _________ apartments a month are rented.

If a black market? develops, the black market rent may be as high as ?$__________ a month.

13) The graph shows the market for apartments in Dayton Ohio. Suppose there is a strictly enforced ?$1,200 rent ceiling in this market.?

With the rent? ceiling, the housing market is? ______.

A. efficient because the marginal cost of the last apartment rented is greater than its marginal benefit

B. efficient because a rent ceiling gives poorer people greater access to housing

C. inefficient because the marginal benefit from the last apartment rented is greater than its marginal cost

D. inefficient because a black market arises

E. inefficient because the marginal cost of the last apartment rented is greater than its marginal benefit ??

With the rent? ceiling, the deadweight loss is ?$_____________.???

With the rent? ceiling, the housing market is fair by both the fair results and fair rules views.

A. True

B. False

14) The table shows the demand and supply schedules for? on-campus housing.

If the college puts a rent ceiling on rooms of ?$650 a? month, rent is ?$__________ and the number of rooms rented is ___________. The? on-campus housing market is _________.

15) The table shows the demand and supply schedules for? on-campus housing.

If the college puts a strictly enforced rent ceiling on rooms of ?$250 a? month, rent is ?$_______ and the number of rooms rented is ____________.

If the college strictly enforces the rent ceiling of ?$250 a? month, the? on-campus housing market is? ______ because? ______.

A. ?efficient; with the rent ceiling more rooms are rented

B. ?efficient; with the rent ceiling fewer rooms are rented

C. ?efficient; the rent ceiling does not change the number of rooms rented

D. ?inefficient; the rent ceiling has no effect on the number of rooms rented

E. ?inefficient; with the rent ceiling more rooms are rented

16) The table shows the demand and supply schedules for? on-campus housing.

If the college puts a strictly enforced rent ceiling on rooms of ?$________ a month and a black market? develops, the rent in the black market may be as high as ?$_____ a month.

If a black market? develops, the housing market is? ____.

A. fair according to the fair results view of fairness and fair according to the fair rules view of fairness

B. fair according to the fair results view of fairness and unfair according to the unfair rules view of fairness

C. unfair according to the fair results view of fairness and unfair according to the fair rules view of fairness

D. fair according to the fair results view of fairness and unfair according to the fair rules view of fairness

E. unfair only if participants in the black market are apprehended and punished

17) Suppose that Congress caps executive pay at a level below the equilibrium.

The quantity of executives demanded will? ______, the quantity of executives supplied will? ______.

A increase; decrease

B. ?increase; increase

C. ?decrease; decrease

D. ?decrease; increase

Executive pay will ________.

The outcome is inefficient? because______.

A. the marginal benefit to firms exceeds the marginal cost of work to executives

B. government employees will move to the private sector

C. there is surplus of executives and some become unemployed

D. the marginal cost of work to executives exceeds the marginal benefit to firms

The graph shows the market for corporate executives.??

Draw a line to show a cap on executive pay at a level below the market equilibrium. Label it Pay cap.

Draw a point on the demand curve at the quantity demanded. Label it 1.

Draw a point on the supply curve at the quantity supplied. Label is 2.

Draw a shape that represents the deadweight loss created by the pay cap. Label it DWL.

Draw a point to show the highest pay that an

executive might be offered in a black market. Label it 3.

18) The graph shows the demand for? on-campus student housing at Florida State University in Tallahassee. The college has 6,000 rooms for rent.

The equilibrium rent is ?$ _________ a week and ________ rooms are rented.??

If the college sets a rent ceiling on? on-campus housing of ?$75 a? week, the quantity of rooms rented is

_________. With the rent? ceiling, this market is ____________ .

??The allocation of housing with the rent ceiling is? _____.

A. unfair because it makes it difficult for? off-campus landlords to compete with? on-campus housing

B. fair because it makes housing affordable for the poorest students

C. unfair because it prevents voluntary exchange and does not necessarily reallocate housing to the poorest students

D. fair because without the rent? ceiling, the university would charge too high a rent

19) The graph shows the demand for? on-campus student housing at Purdue University in Lafayette, Indiana. The university has 12,500 rooms for rent.

If a black market develops as a result of a rent ceiling set at ?$100 a? week, the rents actually paid will range from a low of ?$____ a week to a high of ?$_______ a week.???

When a black market operates in this? market, the market is efficient.

A. True

B. False??

A black market operating in the student housing market is fair.

A. True

B. False

20) The graph shows the market for orange pickers in Florida.

What is the equilibrium wage rate and the equilibrium quantity of pickers? employed?

The equilibrium wage rate of orange pickers is ?$____ an hour and the equilibrium quantity of orange pickers employed is ________.

If Florida introduces a minimum wage of ?$6.00 an? hour, ______ pickers are employed and ___ pickers are unemployed.

21) The graph shows the market for strawberries.

What is the equilibrium price and the equilibrium quantity of strawberries??

The equilibrium price of strawberries is ?$___ a pound and the equilibrium quantity of strawberries is

____ billion pounds.

The market for strawberries is? ______ because? ______.

A. ?inefficient; consumers want to buy more but the price is too high

B. ?inefficient; supply is not perfectly inelastic

C. ?efficient; marginal benefit equals marginal cost

D. ?efficient; farmers are supplying the maximum possible amount

E. ?inefficient; demand is not perfectly elastic

22) The graph shows the market for oranges. The government introduces a price support for

oranges and sets the support price at ?$5.00 a pound. ?_______ gain from the price support and? ______ lose from the price support.

A. Farmers and? consumers; taxpayers

B. ?Taxpayers; consumers

C. ?Farmers; consumers and taxpayers

D. Consumers and? taxpayers; farmers

E. ?Consumers; farmers

The quantity of oranges produced is _______ pounds and the surplus is _________ pounds.

The deadweight loss is ?$ _____.

23) A semiconductor is a key component in your? laptop, cell? phone, and iPod. The table provides information about the market for semiconductors in the United States.

Producers of semiconductors can get? $18 a unit on the world market.

With no international? trade, what is the price of a semiconductor and how many semiconductors are bought and sold in the United? States? Does the United States have a comparative advantage in the production of? semiconductors?

With no international? trade, the price of a semiconductor is ?$___ and ____ billion semiconductors a year are bought and sold in the United States.

The United States ____ a comparative advantage in producing semiconductors.??

If U.S. producers of semiconductors sell at the highest possible? price, they sell ___ billion units in the United States and they export ____ billion units.

24) The top figure show the U.S. market for shoes and the bottom figure shows? Brazil's market for shoes if there is no trade between the United States and Brazil.

?_____ has a comparative advantage in producing shoes. With trade between Brazil and the United? States, _____ exports shoes.

A. The United? States; the United States

B. The United? States; Brazil

C. ?Brazil; Brazil

D. ?Brazil; The United States

The price of shoes in the importing country? _____ and the quantity produced by the importing country? _____.

A ?falls; decreases

B. ?falls; increases

C. ?rises; decreases

D. ?rises; increases

_________________________________ from trade

?25) ______ are the? ______ that we buy from people in other countries.

A. ?Imports; goods and services

B. ?Exports; goods and services

C. ?Imports; goods

D. ?Exports; goods

?______ are the? ______ that we sell to people in other countries.

A. ?Exports; goods and services

B. ?Imports; goods and services

C. ?Imports; goods

D. ?Exports; goods

26) When a country opens up to free international? trade, domestic producers of the imported good receive a? ______ price and sell a? ______ quantity of it.

A. ?higher; greater

B. ?lower; greater

C. ?lower; smaller

D. ?higher; smaller

Producers receive a __________ producer surplus.

27) The graph shows the U.S. demand for potash and the U.S. supply of potash.

The world price of potash is? $50 a ton.??

Total surplus in the United States from potash when the United States does not trade internationally ?$______ million.

Total surplus in the United States from potash when the United States trades internationally is ?$

_______ million.

28) The graph shows the U.S. supply of? cotton, U.S. demand for? cotton, and the world price of cotton.

The total surplus in the United States from cotton when the United States does not trade internationally is ?$______ million.

The total surplus in the United States from cotton when the United States trades internationally is ?$______ million.

29) The figure shows the car market in Brazil when Brazil places no restriction on imports of cars.

The world price of a car is? $10,000. ?

Suppose the government of Brazil introduces a 20 percent tariff on car imports.?

The new price of a car in Brazil is ?$_______.??

The quantity of cars imported into Brazil is ____ million a year.?

The quantity of cars produced in Brazil is ____ million a year?

The? government's tariff revenue is ?$____ million dollars.

30) The graph shows? Spain's demand for and supply of oranges.

The world price of oranges is euro€1.00 a pound. Suppose that the government of Spain imposes a tariff of euro€0.50 a pound on oranges imported into Spain.??

Draw a line to show the price of oranges in Spain. Label it Spanish price.

Draw a point at the quantity of oranges demanded by Spanish consumers at the world price plus tariff. Label it 1.Draw a point at the quantity of oranges supplied by Spanish producers at the world price plus tariff. Label it 2.

31) The U.S. tariff on paper? ______ the U.S. price of? paper, ______ U.S. production of paper and? ______ the U.S. gains from trade.

A. ?raises; increases; increases

B. ?doesn't change;? doesn't change; decreases

C. ?raises; increases; decreases

D. ?doesn't change;? increases; increases

32) The people who support restricted international trade say that? ______.

A. outsourcing sends jobs? abroad, which brings diversification and makes our economy more stable

B. U.S. firms? won't be able to compete with? low-wage foreign labor if trade is free

C. protection saves? jobs, in both the U.S. and foreign economies

D. protection is needed to enable U.S. firms to produce the things at which they have a comparative advantage

33) Suppose that the world price of sugar is 10 cents a? pound, the United States does not trade? internationally, and the U.S. equilibrium price of sugar is 20 cents a pound.

The United States then begins to trade internationally.

The price of sugar in the United States? ______. U.S. consumers buy? ______ sugar

A. remains? unchanged; the same quantity of

B. ?rises; more

C. ?falls; more

D. ?falls; less

E. ?rises; less

U.S. sugar growers produce? ______ sugar. The United States? ______ sugar.

A. ?more; imports

B. ?less; imports

C. the same quantity? of; no

D. ?more; exports

E. ?less; exports

34) Suppose that the world price of steel is? $100 a? ton, India does not trade? internationally, and the equilibrium price of steel in India is? $60 a ton.

Suppose that India now begins to trade internationally.

The price of steel in India? ______. The quantity of steel produced in India? ______.

A. ?rises; increases

B. ?falls; decreases

C. ?rises; decreases

D. does not? change; does not change

E. ?falls; increases

The quantity of steel bought by India? ______. India? ______ steel.

A.?increases; exports

B. ?decreases; exports

C. ?increases; imports

D. ?decreases; imports

E. does not? change; neither imports nor exports

35) Underwater oil discovery to transform Brazil into a major exporte?

The discovery of a huge oil field could make Brazil a large exporter of gasoline. Until two years ago Brazil imported? oil; then it became? self-sufficient in oil. With this? discovery, Brazil will become a major exporter of oil.

Read the news? clip, then answer the following question.

Brazil has changed from a country that? ______ have a comparative advantage in producing oil to a country that? ______ have a comparative advantage in producing oil because? ______.

A. ?did; does? not;

Brazil has become? self-sufficient in energy

B. ?did; does? not;

the price of oil has risen significantly

C. did? not; does; an increase in the supply of oil in Brazil has lowered the price of oil in Brazil to below the world price

D. did? not; does; the demand for oil is increasing around the world

E. did? not; does; Brazil is experiencing strong economic growth