Problem 1. Malcolm currently buys two gallons of milk a week for a total expenditure of $5.00. When the price of milk decreases by $1.00 per gallon, Malcolm purchases 3 gallons of milk a week. Given this information, which of the following equations describes the relationship between the price of milk per gallon (P) and the quantity of milk in gallons (Q)?
a. P = 7 - Q
b. Q = 7 - P
c. Q = 4.50 - P
d. P = 4.50 - Q
Problem 2. Bob just finished taking his First Midterm in Statistics 101. The midterm had a total of 40 points and Bob scored 30 points. What was Bob's score stated as a percentage?
Bob's percentage score = _________________________
Problem 3. Each year Sally purchases a basket of fruit to send to her Aunt Jane for the holidays. In 2008 the fruit basket cost $60 and in 2009 the same fruit basket cost $72. What was the percentage change in the price of the fruit basket?
a. 20%
b. 16.7%
c. .2%
d. .167%
Use the following information to answer the next three questions.
Suppose there are two straight lines: line A and line B. Line A's slope is equal to 2 and the point (X, Y) = (10, 20) sits on this line. Line B has a y-intercept of 10 and an x-intercept of 10.
Problem 4. What is the equation for line A? Show your work.
Problem 5. What is the equation for line B? Show your work.
Problem 6. What are the equilibrium values for X and Y given the above information? Show your work.
Use the information about a country Z's production possibility frontier below to answer the next three questions. Assume the country only produces boats and airplanes and that country Z's resources and technology are constant. Also, assume that country Z's production possibility frontier is linear between each adjacent combination (e.g., the PPF is linear between points A and B, or points B and C, etc.).
Combination Quantity of Boats Quantity of Airplanes
A 0 100
B 75 75
C 135 50
D 175 25
E 200 0
Problem 7. Country Z is currently producing at combination C. What is the opportunity cost of producing an additional 25 airplanes?
a. 60 boats
b. 40 boats
Problem 8. Country Z is currently producing at combination C. Country Z would like to produce 150 boats and 40 airplanes. This combination is
a. feasible.
b. infeasible.
Problem 9. Given the information in the table, what is the maximum number of boats Country Z can produce if it is currently producing 80 airplanes and plans to continue producing 80 airplanes?
The maximum number of boats Country Z can produce if it produces 80 airplanes = _______
Problem 10. Joe is a data collector. He meets with Sue and collects data about Sue's income, wealth, eye color, level of education attained by age 25 (Sue is 54 years old), and number of children (assume Sue can no longer have children and is not interested in adoption). Check the relevant box in the following table to describe each kind of data.
Variable Time Series Data Cross-Sectional Data
Income
Wealth
Eye Color
Level of Education by age 25
Number of Children