1a. The production function for computers is q(K,L) = 7K1/3L2 where K=capital and L=labor. A firm has two units of capital (K=2) which it cannot change. A manager wants to know the marginal productivity of labor if the firm goes from 2 to 3 workers. Calculate the marginal productivity of labor for the manager. Explain your answer carefully to the manager who is not familiar with what the marginal productivity of labor means.

1b. Last year the price of bread was $2.26 and Jen bought 4 loafs of bread. This year the price of bread is $2.57 and Jen bought 3 loafs of bread. Calculate the price elasticity of demand for bread. Explain your answer to the bread delivery person.

1c. Explain why in the short run a firm may not be able to change its inputs.

When we defined the term “auteur” we said that these directors generally “have a distinctive style from film to film.” In the films that you saw how would you describe Spike Lee’s distinctive style? What do the films have in common? - Give a personal critic of the films you watched. Did you like them? Explain why you liked or disliked them

Identify the five main values/elements of the American political culture. Explain the meaning of each value. Show how these values shape our laws and influence our political and economic behavior.

3. Briefly name and describe two (quantitative) measures of competitive balance. Which measure do you think best captures the concept, and why?

4.Explain the link between diminishing returns and competitive balance.

5.Explain the invariance principle, i.e. why, with or without Free Agency, Babe Ruth (perhaps history’s most famous baseball player) was destined to play for the Yankees.

Construct an original numerical example of a Ricardian model in which one country has an absolute advantage in the production of both goods.

1. Make an assumption about the amount of labor resource available in each country, then draw each country’s PPF.
2. Will trade be mutually advantageous in your example? If not, why not? If trade is mutually advantageous, give an example of one international terms of trade that would make trade mutually advantageous.

A neighboring city looks identical in every way (except each house in the neighboring city requires only half the electricity and only ¼ of the water is produced for use compared with the city in the above questions – which sacrifices 1 unit of water for 1 unit of electricity). Use comparative advantage to determine which city will supply water and which will supply electricity. Estimate the price range of electricity in terms of water.

  Durable goods                                          400

                                      Non-resident investment                                 300

                                      Federal purchase of goods                               300

                                      Exports                                                            500

                                      State and local purchases of goods                250

                                      Residential investment                                        5

                                      Imports                                                            150

                                      Change in business inventories                        -25

                                      Nondurable goods                                          600

                                    Depreciation                                                       50

                                    Net factor income from abroad                          30

Determine:

i)                Personal consumption expenditures

ii)              The value for gross private domestic investment

iii)             The value of Net Exports

iv)             The value of government spending in

v)               The value of gross domestic product (GDP)

vi)             The value of GNP

vii)           The value of NNP

2. In an economy, Y (national income) + C (Consumption) + I (investment). If consumption + $50m + 0.75Y, planned investment = $180m and national income = $800m, realised investment will be:

$50m

$100m

$200m

$300m

Summarize “The Limits to Growth Model”

A Wimax wireless network integrated with a satellite network can provide connectivity to any location within 10 km of the base station. The number of sectors per base station can be varied to increase the bandwidth. An independent cable operator is considering three bandwidth alternatives 44(Mbps), 55(Mbps), and 88 (Mbps). Assume a life of 20 years and a MARR of 10% per year.

1) Use incremental RoR analysis(IRR) and PW to determine the financially justified one.

2) Why should you use incremental Rate of return and what is the difference between that and MARR?

Summarize “Property Rights and Environmental Regulation”

Provide an outline for how a bill becomes law in the state legislature in California. Be sure to identify the key players and the role the Governor plays in the process.

  Use four separate supply and demand diagrams to illustrate the effects of the following possible shocks on the equilibrium price and quantity of avocados. In each diagram clearly indicate the initial equilibrium price and quantity with a P₁ and Q₁ and the new equilibrium price and quantity after the shock P₂ and Q₂

A.) A major scientific study shows that people who regularly consume avocados live on average seven years longer than those who don’t consume avocados.

B.) Farmers produce genetically modified avocado plants which allow for greater output without increasing costs.

C.)   There is a large increase in the price of tomatoes, which is a complement of avocados.

D.) There is a significant increase in the price of water in California, where most U.S. avocados are grown

How does the market mechanism distribute income?

From the Industrial Revolution to the present, innovation has played a major role in the growth of output. What do the leading analysts of economic growth argue were some of the most significant innovations of this period?