(a) Using the Aggregate Demand (AD) model diagram, illustrate what happens to the equilibrium level of aggregate output when the Federal Reserve (Fed) engages in a tightening of monetary policy. Make sure you properly label all the axes and curves.

(b) Would the Federal Reserve be more likely to engage in a tightening of monetary policy during an expansion or recession? Explain in one sentence.

(c) Has the Federal Reserve recently (past 1-2 months) been engaging in a tightening of monetary policy (yes or no)? Explain in one sentence.

We have discussed that country’s sustained economic growth depends mostly on rising (labor) productivity. Describe two ways how a country can increase its productivity.

1. If an economy suffers from unanticipated deflation, then

2. In the classical model, an increase in the demand for labor leads to

3. An increase in the supply of labor through immigration leads to an increase in real wages and an increase in the quantity of labor.

a. True

b. False

1. Purchasing Power Parity theory

2. Suppose that an ounce of gold sells for $2000 in the United States and 1000 euros in France. A euro currently trades for $1.50 . it costs $100 to ship an ounce of gold between the two countries. Assume it is legal to buy and ship gold in both countries. Then

3. Suppose that Laborland has a population of 100 people. Five people are under 16 years of age and five people are retired. Ten people have given up looking for work. Sixty people are actively employed and 20 people are actively seeking work. If five of those give up looking for work, then

If the daily marginal cost of security guards is $500, what is the socially optimal number of security guards for the community?

1. EXPORTS AND IMPORTS

a. Graph a nation that is exporting a good to a trading partner. Who benefits from the domestic nation exporting to a trading partner?

b. On the graph, Identify the amount of good exported, identify the change in domestic consumption and the change in domestic production caused by exporting that good.

c. In a separate graph, show a nation importing a good from a trading partner. Who benefits from the domestic nation importing from a trading partner?

d. On the graph, identify the total amount of the good imported, the changes in domestic consumption and production as caused by the imports

A firm with a production function given by ?=170?q=170N, where ?q is the quantity produced and ?N is the number of workers hired. The firm sells its product in a competitive market, and the market price of its good is ?=1p=1.

The firm, however, is the only employer in the town where it operates, and hence it does not take the cost of labour as given. The inverse labour supply function in this town is given by ?=50+0.02?2w=50+0.02N2.

(a) Write an equation for firm profits as a function of ?N and solve for the profit-maximizing choice of ?N.

(b) What will the wage be in the town where the employer operates?

(c) Is the wage equal to, greater than, or less than the marginal product of labour? Explain intuitively why this is the case in this setting.

A company TFA has a monopoly on toilet paper production. It offers its product in three different sizes: a small (S) package which contains 4 rolls, a medium (M) package which contains 8 rolls, and a large (L) package which contains 12 rolls.

There are two types of consumers in the market: type A consumers and type B consumers. The willingness-to-pay (WTP) for each type of toilet paper package for each type of consumer is detailed in the table below (in dollar amounts):

(c) Suppose that TFA now offers better prices for people buying larger packages of toilet paper. Specifically, while the price of the S package remains at $4, the M package will now be sold for $6.40 and the L package will now be sold for $9. How does this affect the consumption decisions of each type of consumer? How does it impact TFAs total revenues?

(d) TFA is considering discontinuing sales of the M packages, and selling only S or L packages (maintaining the same pricing strategy as in part c). If TFA's goal is to maximize their revenues, would this be a good strategy for them? Explain why or why not.

In a market economy resources tend to be allocated optimally. Discuss how the interaction of consumers and producers makes this happen.

How do I reflect on the Baldrige principle?

What can be a more effective way of reducing the disincentive to work created by the Medicaid rule that benefits are proportionally reduced when a recipient finds work or increase in salary?

Group of answer choices

take away the medicaid benefits then tax the income from the new job a 20% tax until all the medicaid benefits are paid back

take away the medicaid benefits but reward the job acquisition by giving the recipient a tax credit

send them a congratulatory letter then take away their medicaid benefits in proportion to their wage

CMS can just collect the paychecks but continue to give Medicaid benefits

this does not create a disincentive to work

What are the major factors that are changing the energy industry?

• Describe changes in the domestic supply of oil in the USA.
• Identify the new sources of oil and gas and the costs of extraction of these resources.
• Discuss the environmental impacts of new sources of oil and natural gas.
• Identify what is the "shale revolution".
• Identify what factors will likely determine the future of nuclear energy.
• Discuss perspectives of alternative to oil and gas sources of energy.

Answer the following questions about oligopoly.

1. If a group of sellers could form a cartel, what quantity and price would they try to set?
2. What is the prisoner's dilemma, and what does it have to do with oligopoly