Study Questions free essay sample

The population of Mountainland was 45. 7million in 2008 and 46. 3 million in 2009. What was the percentage change (rate of growth) in population from 2008 to 2009? (b) The rural population of Mountainland was 18. 3  million in 2008 and 17. 7 million in 2009. What was the percentage change? (c) The data below show Mountainland’s real GDP (real output produced) for the period 2008-2010. Calculate the rate of growth in real GDP in (i) 2008-9 and (ii) 2009-10. |Year |Real GDP (in billion $) | 2008 |5. 6 | |2009 |5. 7 | |2010 |5. 5 | 2. You are interested in buying a book that cost ? 30 but discover that its price has increased by 20%. What is the book’s new price? 3. For each of the following pairs of variables, explain (i) whether there is likely to be a positive or negative relationship between them, and (ii) which is the dependent and which is the independent variable. (a) income and saving (b) number of DVDs purchased and price of DVDs c) level of salary and number of years of working experience (d) the temperature and the number of swimmers on the beach 4. We will write a custom essay sample on Study Questions or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The following table contains data on the relationship between saving and income. Rearrange these data into a meaningful order and graph them on the accompanying grid. What is the slope of the line? The vertical intercept? Interpret the meaning of both the slope and the intercept. Write the equation which represents this line. What would you predict saving to be at the $12,500 level of income? | | | Income |Saving | |(per year)` |(per year) | | | | | | | |$15,000 |$1,000 | |0 |-500 | |10,000 |500 | |5,000 |0 | |20,000 |1,500 | 5. Construct a table from the following data shown on the accompanying graph. Which is the dependent variable and which the independent variable? Summarize the data in equation form. 6. Suppose that C = a + bY, where C = consumption, a = consumption at zero income, b= slope, and Y = income. a. Are C and Y positively related or are they negatively related? b. If graphed, would the curve for this equation slope upward or downward? c. Are the variables C and Y inversely related or directly related? d. What is the value of C if a =10, b =. 50, and Y = 200? e. What is the value of Y if C = 100, a = 10, and b = . 25? 7. In the accompanying graph, is the slope of curve AA’ positive or negative? Does the slope increase or decrease as we move along the curve from A to A’? Answer the same two questions for curve BB’. Show these data graphically. Upon what specific assumptions is this production possibilities curve based? b. If the economy is at point C, what is the cost of one more automobile? Of one more forklift? Explain how the production possibilities curve reflects the law of increasing opportunity costs. c. If the economy characterized by this production possibilities table and curve were producing 3 automobiles and 20 forklifts, what could you conclude about its use of available resources? d. What would production at a point outside the production possibilities curve indicate? What must occur before the economy can attain such a level of production? 4. Explain how (if at all) each of the following affects the location of a country’s production possibilities curve: a. The quality of education increases. b. The number of unemployed workers increases. c. A new technique improves the efficiency of extracting copper from ore. d. A devastating earthquake destroys numerous production facilities. e. Society prefers to produce more of one of the two goods and less of the other. 5. (a) What are economic resources? (b) What categories do economists use to classify them? (c) Why resources are also called factors of production? (d) Why are they called inputs? (e) Provide examples in your answers. 6. (a) Why isn’t money considered a capital resource in economics? b) Why is entrepreneurial ability considered a category of economic resources, distinct from labor? (c) What are the major functions of the entrepreneur? Referring to the table in Question 3, suppose improvement occurs in the technology of producing forklifts but not in the technology of producing automobiles. Draw the new production possibilities curve. Now assume that a technological advance occurs in producing automobiles but not in producing forklifts. Draw the new production possibilities curve. Now draw a production possibilities curve that reflects technological improvement in the production of both goods. 8. (a) In what way does capital differ from the other factors of production? b) Using diagrams and the production possibilities model, explain why a decision to produce more capital goods today can result in greater economic growth in the future. 9. (a) Using a diagram, explain the law of increasing opportunity costs. (b) Draw diagrams and use examples to illustrate the difference between constant and increasing opportunity costs. (c) Explain the reasoning behind the law of increasing opportunity costs. 10. Referring to the p roduction possibilities model, explain how the slope of the PPC is related to the concept of opportunity cost. Chapter 2 The market system and the circular flow 1. What are the main characteristics of a market economy? 2. Explain the five fundamental questions that must be answered by any economy. 3. (a) What are the two kinds of markets and the two groups of decision-makers in the circular Flow model? (b) Explain the two flows in the circular flow model. (c) Explain how both groups of decision-makers are both buyers and sellers. (d) Why is this model appropriate for illustrating a market economy? Chapter 3 Demand, supply, market equilibrium, consumer and producer surplus 1. (a) Explain the law of demand. (b) Why does a demand curve slope downward? (Use the concepts of income and substitution effects in your answer. ) (c) How is a market demand curve derived from individual demand curves? 2. a) What are the determinants of demand? (b) What happens to the demand curve when any of these determinants change? (c) Distinguish between a change in demand and a change in quantity demanded, noting the cause(s) of each. 3. What effect will each of the following have on the demand for small automobiles such as t he Mini Cooper and Smart car? a. Small automobiles become more fashionable. b. The price of large automobiles rises (with the price of small autos remaining the same). c. Income declines and small autos are an inferior good. d. Consumers anticipate the price of small autos will greatly come down in the near future. e. The price of gasoline substantially drops. 4. a) Explain the law of supply. (b) Why does the supply curve slope upward? (c) How is the market supply curve derived from the supply curves of individual producers? 5. (a) What are the determinants of supply? (b) What happens to the supply curve when any of these determinants change? (c) Distinguish between a change in supply and a change in quantity supplied, noting the causes(s) of each. 6. What effect will each of the following have on the supply of automobile tires? a. A technological advance in the methods of producing tires. b. A decline in the number of firms in the tire industry. c. An increase in the price of rubber used in the production of tires. d. The expectation that the equilibrium price of auto tires will be lower in the future than it is currently. e. A decline in the price of large tires used for semi-trucks and earth hauling rigs (with no change in the price of auto tires). f. The levying of a per-unit tax in each auto tire sold. g. The granting of a 50-cent-per-unit subsidy for each auto tire produced. 7. Consider the following two statements. (a) â€Å"In the corn market, demand often exceeds supply and supply sometimes exceeds demand. † (b) â€Å"The price of corn rises and falls in response to changes in supply and demand. † In which of these two statements, (a) or (b), are the terms â€Å"supply† and â€Å"demand† used correctly?