Question 1
1. A college stadium capacity is 7,000. If the school management wanted a full house for the coming home game, it would set price at:
|
Price per Ticket
|
Quantity Demanded
|
|
$10
|
1,000
|
|
9
|
2,500
|
|
8
|
3,500
|
|
7
|
4,000
|
|
6
|
7,000
|
|
5
|
9,000
|
|
|
2. Do you agree or disagree with the statement that: "A monopolist always charges the highest possible price."? Explain.
Question 2
1. In year 2007, the population of island I is 150, 000, of which 50,000 are either less than 16 years of age orolder than 65. Of the people who are of working age, 60,000 have jobs (40,000 do not). 20,000 are unemployed but actively seeking employment and there are 20, 000 who have given up the job search in frustration. The employment rate is? What is the labor force participation?
In year 2008, the economy of the island moves out of a long recession and job openings increases. As a result, 5000 discouraged workers become encouraged and begin searching for jobs. What is the unemployment rate in 2008? And, what can you conclude?
2. In Haiti, the income tax rate is 20% and the MPC is 0.75.
a. Find the government spending multiplier
b. the tax multiplier.
c. If the government equally increases pending and taxes by 1000, income will be increased by how much?
d. What should the government do to increase income by 400?
3. An increase in government spending of 100 will cause the level of output to rise by 250, MPS is :
4. Let the price of Barbancourt (the Haitian Rum) be $15 a bottle in the year 2000 and $20 in 2010, and its production 500 and 750 bottles respectively for the two years. Let the price of a bag of rice be $25 in 200 and $30 in 2010when its production is 100 and 250 bags for the same two years. Using the year 2000 as the base year, compute:
- The Nominal GDP for both years
- The real GDP for both years
- The GDP deflator for both yearsa