1) Compare and contrast the phases of the business cycle.

2) If efficiency is our goal, how do we know if our economy is running efficiently or not? Given the articles you have read and the things you have learned, what do you think about our current

economy? Is it running efficiently now?

Economies of scale can reward a company for growing. If the firm can achieve economies of scale, the average costs of a unit of production (of either a physical good or a “unit” of service) goes down as the company grows. What is the role of “fixed costs” in this?

Please use a graph to support your answer.

1. What is the definition of the unemployment rate? What are some potential short-comings of this single measure/

How important is the state of the economy in the November 3rd election?

Use supply and demand diagrams to show what would happen if additional LTC insurance allows more substitution of nursing home care for hospital care. According to your diagram, do LTC expenditures increase or decrease? Do hospital expenditures increase or decrease? Do total expenditures (LTC + hospital) increase or decrease? Explain.

What is the difference between a change in demand and a change in quantity demanded?

Use a graph (or two) to show the difference.

1. Assume that there is an increase in the labor productivity in an economy. What will happen to the LRAS? Show it graphically using the labor market and the production function and explain.
2. Assume that there is an increase in population in an economy. (for example, migration) What will happen to the LRAS? Show it graphically using the labor market and the production function and explain.

3. AD-AS and Phillip Curve Model, Money Market and Banking System

   1. Why does the aggregate demand curve have a negative slope?

   2. Why is the long run aggregate supply curve vertical?

   3. Why does the short run aggregate supply curve have a positive slope?

   4. Graphically illustrate an economy in the long run equilibrium, producing at the full employment level of production. Indicate the equilibrium Price level (P*) and the level of real GDP (Y*)

1. The Treaties of Westphalia are often viewed as the beginning of modern international relations. Why are they a useful benchmark? What factors does this benchmark ignore?

In Ch. 12 of Keynes’s The General Theory of Employment, Interest and Money

1. What is Keynes arguing in this chapter? Be as specific as possible. Does this chapter at all resemble or build off of Marshall’s approach to science?
2. Is this chapter relevant today? Why or why not?
3. What does Keynes mean when he refers to “the job likely to be ill done?”

Microeconomics question:

Consider the special case and assume that for a natural monopolist the marginal cost is constant and there is high fixed cost. Show graphically how the natural monopolist maximizes economic profits. At the point of profit maximization, what is the monopoly price and what is the monopoly quantity? Suppose now the natural monopoly is regulated. What is the best-regulated price? What happens to economic profits with the regulation? How is the consumer surplus changed due to the regulation? Show graphically.

• Why did people want to move to the United States?
• How did the industrialization of the US help establish itself as a world power?
• How did the Industrialization of the US help change the class structure in the country?
• What advancements did it have in technology and labor?

a. What is market equilibrium? Does the market always reach equilibrium? Explain

b. If there is surplus of houses in the market, then the price of houses will rise. True or false. Explain and offer an example.

How to measure economic development for growth and income

Okun’s Law is written as u – u(-1) = -0.4 (g_Y – 3%)

a. What is the sign of u – u(-1) in a recession? What is the sign of u – u(-1) in a recovery?

b. Explain where the 3% number comes from?

c. Explain why the coefficient on the term (g_Y – 3%) is -0.4 and not -1.

d. Suppose the number of immigrants per year allowed to enter the United States is sharply increased. How would Okun’s law change?

2. Use the IS-LM-PC model to illustrate how the economy adjusts to an increase in taxes both in the short run and in the medium run.

3. Explain why in the medium run an increase in the price of oil will cause an increase in the unemployment rate.

4. If the economy is initially operating at the natural level of output why an increase in the price of oil will cause an increase in the aggregate price level.

5. Explain why during the short run, an increase in the price of oil will cause an increase in the interest rate.