The Fed thinks that the economy is about to slip into recession and takes actions to lessen its severity. In the left graph, draw a curve that shows the change that the Fed makes to either the demand for money or the supply of money. Label it. Draw a point to show the new equilibrium quantity of money and interest rate. Show the effect in the right graph. Draw either a new SLF curve or DLF curve. Label it. Draw a point to show the new equilibrium quantity of loanable funds and interest rate.
The table shows the demand and supply schedules for on-campus housing
Rent quantity d quantity s
. 500 5,000 4,000
. 550 4,500 4,000
600 4,000 4,000
650 3,500 4,000
700 3,000 4,000
750 2,500 4,000
If the college puts a rent ceiling on rooms of $700 a month, rent is the Rent demanded supplied and number of rooms (dollars per month) (rooms) rented is .The on-campus housing market is
The table shows a bank's balance sheet. The bank has no excess reserves and there is no currency drain. Suppose the bank sells $2 million of government securities to the central bank in an open market
As soon as the sale happens, the bank can create million of new money. The bank's actual reserve ratio is
The total quantity of new money created when the bank has no excess reserves is million.
Rabbit farming is a perfectly competitive industry and all rabbit farms have the same cost curves. When the market price is $37 a rabbit, farms maximize profit by producing 1,000 rabbits a week. At this output, average total cost is $35 and average variable cost is $15 a rabbit. Minimum average variable cost is $11 a rabbit. If the price of a rabbit falls to $11, the rabbit farmer will
produce the profit-maximizing output
continue to produce 1,000 rabbits a week
attempt to raise the price back to $37 a rabbit
either shut down or produce the profit-maximizing output
When the Fed buys securities from a bank, a sequence of events begins. The events are listed below. Number each event in the order in which it occurs.
The quantity of money increases.
New money is used to make payments.
Banks lend excess reserves.
Excess reserves decrease but remain positive.
Some of the new money remains on deposit and some is a currency drain.
Desired reserves increase because deposits have increased.
Banks have excess reserves.
Bank deposits increase.
Tulip growing is a perfectly competitive industry and all tulip growers have the same cost curves. The market price of tulips is $9 a bunch and each grower maximizes profit by producing 800 bunches a week. The average total cost of producing tulips is $20 a bunch. Minimum average variable cost is $7 a bunch, and the minimum average total cost is $12 a bunch.
In the short run, each grower is incurring an economic loss
Because firms in the industry are some firms will the market in the long run. The number of tulip growers will
incurring an economic loss; enter and some firms will exit; increase or decrease depending on the relative number of entering and exiting firms
making an economic profit; exit and some firms will enter; decrease or increase depending on the relative number of exiting and entering firms
making an economic profit; enter; increase
making zero economic profit; shut down and exit; decrease r
incurring an economic loss; exit; decrease
A bank makes a profit by
setting the interest rate as close to zero as possible
. buying cash assets
lending at a higher interest rate than the interest rate it pays on its deposits
increasing its reserves
. lobbying the government to keep the interest rate high
The table shows a nation's marginal benefit and marginal cost schedules.
What is the marginal benefit from and the marginal cost of growing 3 pounds of bananas?
The marginal benefit from growing 3 pounds of bananas is 1 pound of coffee.
The marginal cost of growing 3 pounds of bananas is 3 pounds of coffee.
Bananas (pounds of coffee per (pounds) pound of bananas)
1 2 3 3 2 1 1 2 3
Mildred and Robert are the only buyers in the market for DVDs. Mildred buys 14 DVDs when the price of a DVD is $6.00, 11 DVDs when the price of a DVD is $8.00, and 8 DVDs a month when the price of a DVD is $10.00. Robert buys 21 DVDs a month when the price of a DVD is $6.00, 8 DVDs when the price of a DVD is $8.00, and zero DVDs when the price of a DVD is $10.00. In the market for DVDs, the quantity demanded
at $8.00 a DVD is 11 DVDs a month
increases as the price falls
increases as the price rises
at $8.00 a DVD is 8 DVDs a month
$6.00 a DVD is less than the quantity demanded at $8.00 a DVD
Tony and Patty produce skis and snowboards. The tables show their production possibilities. Each week Tony produces 4 snowboards and 8 skis and Patty produces 15 snowboards and 30 skis. Tony and Patty decide to specialize and trade.
specializes in snowboards and produces
specializes in skis and produces
Tony, 20 snowboards; Patty; 60 skis
B. Tony, 60 snowboards; Patty; 20 skis O
c. Patty; 15 snowboards; Tony, 8 skis
D. Tony, 4 snowboards; Patty; 30 skis
E Patty; 30 snowboards; Tony, 10 skis
The number of snowboards produced by . The number of skis produced
Tony's Production Possibilities Snowboards (per week) Skis (per week) 20 and 0 16 and 2 12 and 4 8 and 6 4 and 8 0 and 10
Patty's Production Possibilities
Snowboards Skis (per week) (per week) 30 and 0 15 and 30 0 and 60
The graph shows the demand for on-campus student housing at the University of Idaho in Moscow, Idaho. The college has 6,000 rooms for rent.
If a rent ceiling of $125 a week is strictly enforced and there is no black market,
students who cannot find on-campus housing gain because it's more fun to live off campus
the university gains because it doesn't have any empty rooms on campus
the university gains and the owners of off-campus housing lose
students who get the cheaper on-campus housing gain and the university and those students who cannot find on-campus housing lose
Rent (dollars per week)
175- 150- 125- 100- 75- 50-
25 4500 6000 7500 9000 10500 12000 Quantity (rooms)
Once a month, the Bureau of Statistics calculates the Consumer Price Index, which is a measure of the consumers for a fixed basket of consumer goods and services.
Price; average of the prices paid by urban
Labor; non-discounted prices paid by urban
Price; prices paid by all
Labor; average of the prices paid by urban
List the sequence of events in the transmission from a rise in the federal funds rate to a change in the inflation rate. Number the items below from 1 through 8.
Consumption expenditure, investment, and net exports decrease.
The quantity of money and supply of loanable funds decrease.
Aggregate demand decreases.
The long-term real interest rate rises.
The Fed raises the federal funds rate.
Other short-term interest rates rise and the exchange rate rises.
Real GDP growth rate decreases.
Inflation rate decrease
The graph shows the demand curve for blankets and the market price of a blanket. Draw a point to show the quantity of blankets bought and the price paid. Draw a shape that represents the consumer surplus from the blankets bought. Label it. Draw a shape that represents the amount paid for the blankets bought. Label it.
The consumer surplus equals $.
The total amount paid for the quantity bought is $ .
The total benefit from the blankets bought is $ .
Price (dollars per blanket) 90 75 60
0 0 20 40 60 80 Quantity (blankets per day)
Checkpoint Test Score: 99.35% (228.5 of 2:
price D Amount paid
>>> Draw only the objects specified in the question.
Review: Final Exam
You must do your homework but you also want to check your emails.
You think hard about how to allocate the next hour between doing problem sets and reading email.
You decide to spend the first 55 minutes studying and the remaining 5 minutes dealing with your emails.
Your decision is an example of
A good time management
B. making a choice such that the marginal cost exceeds the marginal benefit
C making a choice at the margin
D misallocating your time
National comparative advantage arises from the differences
in ________ across countries.
the money cost of production
q- If country A has a comparative advantage in the
production of automobiles and country B has a comparative advantage in the
production of boats
both countries will gain if country A exports automobiles to
country B and country B exports boats to country A
B. only one country will gain, and that country is the one
that uses the most up-to-date technology 0
c. both countries will gain if country B exports automobiles
to country A and country A exports boats to country B O
D. only one country will gain, and that country is the one
that has the lowest wage rates
When Yvonne's income increases by 3 percent, her demand for
tickets to professional football games increases by 6 percent.
Yvonne's demand for tickets is income _________ . For
Yvonne, football tickets are ________ good.
elastic; a normal
elastic; an inferior
inelastic; a normal
inelastic; an inferior
Tiny is a small, isolated community served by one newspaper
that can meet the market demand at a lower cost than two or more newspapers
could. The May Intelligencer is the only source of news. The graph shows the
marginal cost of printing the May Intelligencer and the market demand for it.
The 7Jny Intelligencer is a profit-maximizing, single-price monopoly. What is
the efficient number of copies of the newspaper and what is the price at which
the efficient number of copies could be sold?
The efficient number of copies of the May Intelligencer is
250 and the price at which this number could be sold is 50 cents a copy
The BLS reported that in November 2016, the labor force was
158.5 million, employment was 151.0 million, and the working-age population was
Calculate the unemployment rate and the labor force
The graph shows the market for orange pickers in Florida.
What is the equilibrium wage rate and the equilibrium quantity of pickers
Mark's Mineral Springs is a single-price monopoly.
The table shows the demand schedule for Mark's spring water
(columns 1 and 2) and the firm's total cost schedule (columns 2 and 3).
Calculate Mark's total revenue and marginal revenue
A multiplex cinema in downtown Minneapolis is a monopoly.
Amazon. com, the on-line bookstore is a monopoly.
Costco, the discount retailer is a monopoly.
The only shoe-shine stand licensed to operate at an airport
is a monopoly.
The U.S. Postal Service is a monopoly.
Every day, we make many choices. We can't avoid having to
make choices because
a.we can't find enough things to do to fill our day
b. there is too much available
c. there is too much variety
D. there are too many TV channels
E. we can't afford to buy all the things we'd like
The table gives information about a nation's labor force.
What is the number not in the labor force?
Labor Market Data
Working-age population 223.4 million Labor force 147.4
million Unemployed 8.1 million
A department store in a large downtown Houston shopping mall
is a monopoly.
Tiffany, the upscale jeweler is a monopoly.
Wal-Mart, the national department store chain is a monopoly.
The only shoe-shine stand licensed to operate at an airport
is a monopoly.
The U.S. Postal Service is a monopoly.
Will runs a hot dog cart at the sports stadium. Will has no
skills, no job experience, and no alternative employment.
Entrepreneurs in the hot dog cart business earn $20,000 a
year. Will pays the rent of $2,000 a year, and his total revenue is $25,000 a year.
He borrowed $500 at 10 percent a year to buy equipment. At the end of one year,
Will was offered $300 for his business and all its equipment.
Will's explicit costs are____. Will's implicit costs are_____.
Will's economic profit in the first year is _____dollars.
For consumers, T-shirts and tank tops are substitutes.
If the price of a T-shirt increases, the demand for tank
tops will ________
increase or decrease,
but the demand for T-shirts will not change
decrease, and the
demand curve for tank tops will shift leftward
increase, and the
demand curve for tank tops will shift rightward
not change, but there will be a movement along the demand
curve for tank tops
Explain the change in aggregate demand when government
expenditure on national defense increases by $100 billion. Aggregate demand by
A. increases; exactly
B. decreases; less than
C. increases; more than
D. increases; less than
E. decreases; more than
In December 2000, currency and traveler's checks held by
individuals and businesses was $ 539 billion; checkable deposits owned by
individuals and businesses were $ 548 billion; savings deposits were $1,878
billion; small time deposits were $1,045 billion; and money market funds and
other deposits were $921 billion.
Calculate MI and M2 in December 2000.
MI in December 2000 is ___billion.
M2 in December 2000 is ____billion.