1. (10 pts) You just bought a house for $400,000. You put 20% down and financed the rest over 30 years at 6% nominal interest. Assuming equal monthly payments over the term of the loan, what are the monthly payments? What is the effective rate? (Chapter 4)

2. (10 pts) What would you need to invest today in an account that had a nominal rate of 8% compounded quarterly, if you wanted $12,000 in 4 years? What would be the investment required if the account compounded semi-annually? What is the effective rate of each investment? (Chapter 3)

3.

1. (10 pts) Assume the following cash flows: (Chapter 4)

Assuming an 9% interest rate, what is the value of A required to make the present value of the cash flows equal to 0?

Working with labor force statistics

You are looking over data on the U.S. labor force, employment, unemployment, persons not in the labor force, and discouraged workers from the November 2019 Current Population Survey. You are particularly interested in the problem of discouraged workers. You make several quick calculations.

First, you determine the official unemployment rate.

Second, you determine the unemployment rate if all discouraged workers are considered to be part of the labor force (and thus, unemployed).

Finally, you calculate what would happen to the official unemployment rate if 500 of the discouraged workers begin actively searching for work.

When you write a report on labor market dynamics, which of the unemployment rate measures will you choose as a gauge of the state of the labor market in November 2019? Why?

What are the key resources of an electrical service business?

15. If the central bank keeps the overnight rate unchanged, a drop in financial confidence will lead to…

(a)     Lower investment and net exports.

(b)     Unchanged investment and net exports.

(c)     Lower investment and unchanged net exports.

(d)     Unchanged investment and lower net exports.

15.  Choice:  

Explanation:  

16. Comparing the size of the monetary base and the money supply...

(a)     The two are equal because the banks prudently keep reserves equal to deposits.

(b)     The monetary base is typically bigger because it includes treasury bills.

(c)     The money supply is bigger because banks make loans.

(d)     The money supply is bigger because it includes treasury bills.

Assume that the economy is operating at full employment (long-run equilibrium). Use our AD and AS analysis to answer the following questions.

1. Graphically show the current economic state with an AD curve, a (short-run) AS curve and a long-run AS curve. Compare current GDP and potential GDP.

Tim purchases cookies (C), brownies (B) and jam (J). At his current levels of consumption, his MU_C = 10, MU_B = 15, and MU_J = 20. The price of a cookies is $2, the price of brownies is $3, and the price of jam is $4. Is the Tim maximizing his utility? If so, why? If not, what must he do to move his consumption toward equilibrium?

There are 2 players: Albert and Barbara. Albert has 100 cards which he distributes in 2 buckets. After that, he leaves 1 bucket for himself, and offers Barbara the other one. Barbara saw how Albert distributed the cards, but does not know which of the buckets Albert is offering her. Valuation of 1 card by Albert - 1 pound, valuation of Barbara -1.5 pounds. Barbara offers the price for the bucket offered to her, and Albert decides to accept the offer or refuse. They both want maximum payoff. If one player is indifferent, then he chooses an action that will benefit the other player.
a) In one bucket there are 100 cards, and in the other 0. Albert knows how many cards are in the boxes, but Barbara does not. What price should Barbara offer?
b) What is the best card distribution for Albert?

Suppose the firm knows that, there are three types of buyers: ?? = 100 − 4?,?? = 400 − 6?, and ?? = 300 − 10?. The firm’s ATC=MC=5.

1. Suppose the firm operates as a single price monopoly, what will be the market price, market quantity, and profit?

2. What will be consumer surplus, producer surplus, and deadweight loss? Draw a graph!

3. Under which conditions can this firm use segmented price discrimination?

4. Suppose that the firm conditions from c) hold, what should the firm charge in each

   market? What is output in each market? What is total market quantity? What is the

   firm’s profit?

5. Does segmented price discrimination of the market improve efficency? Why?

Suppose a pro sports franchise faces demand for tickets to its home events according to the function Q = 13000 - 50P, where P is the price per ticket in dollars, and earns marginal revenue according to the function MR = 260 - 0.04Q, where Q is the quantity fo tickets. For this franchise, the vertical intercept of the demand function is

a. greater than the vertical intercept of the marginal revenue function

b. equal to the vertical intercept of the marginal revenue function

c. less than the vertical intercept of the marginal revenue function

d. equal to 13,000 tickets sold

Suppose the sports franchise discussed in item above incurs marginal costs according to the function MC = 80 + 0.01Q. Assuming the franchise is a profit-maximizer, it will generate consumer surplus in this market of:

a. $676,800

b. $259,200

c. $129,600

d. none of the above

What does it mean to someone to connect in today’s world, and how does writing facilitate those connections?

1. Consider the orange-growing industry, which hires workers on a common labor market and sells oranges on a common product market. Firms in the industry have nearly identical production functions and capital.   Suppose that a freeze affects the industry in the following way: some oranges on each tree are damaged and cannot be sold, but others are fine. As a result, each worker takes longer to harvest oranges from each tree. What is the effect on Labor Demand for workers in this industry? Think carefully about all the components of Labor Demand.

12. U-shaped LRAC curves with a horizontal segment surrounding their minimum level exhibit

a. Constant Returns to Scale

b. Increasing Returns to Scale

c. Decreasing Returns to Scale

d. All of the above

13. Economist’s classification of a market’s structure will depend upon

a. The number of firms in the market

b. The diversity of products available to consumers in the market

c. The ease with which a firm could potentially enter or exit the market

d. All of the above

14. In perfect competition, each firm’s individual demand curve for their product is

a. Perfectly inelastic

b. Perfectly elastic

c. Downward sloping

d. Upward sloping

15. If a market is perfectly competitive, which of the following would be inconsistent with a

predicted long run equilibrium condition?

a. The marginal firm is operating at the minimum point on its LRAC curve.

b. The marginal firm is earning $0 economic profit.

c. The marginal firm is earning positive economic profit.

d. All of the above

16. Gloria runs her own candy shop. Last year, she spent $215,000 purchasing candy to sell in her

store and paid $35,000 in rent. She had no other direct costs associated with operating her

business and her total revenues for the year were $295,000. Assume that during the same year, if

she did not run her own shop she would have worked at her friend’s shop for a salary of $50,000.

Gloria’s economic profit was ______and her accounting profit was ______.

a. - $5,000 ; $45,000

b. $60,000 ; $15,000

c. $45,000 ; $80,000

d. $45,000 ; $60,000

17. A firm should shut down in the short run if

a. It cannot earn revenues that cover its total costs

b. It cannot earn revenues that cover its variable costs

c. It cannot earn revenues that cover its fixed costs

d. All of the above

18. The long run market supply curve could be upward sloping in a competitive market due to which

of the following reasons?

a. Expansion of the market’s size increases the demand for the inputs used in production,

pushing their prices higher.

b. Entry and exit of the market is costly for firms.

c. Expansion of the market’s size brings new firms that are less efficient than previously

producing firms.

d. All of the above

compare and contras two countries and the different Regulatory and Legal aspects of their different Global Business Environments