At the beginning of 2018, the aggregate output in Atlantis was $15 billion and the population was 3 million. During 2018, aggregate output rose by 3.5%, the population rose by 2.5%, and the aggregate price level remained constant. For all calculations, calculate to 2 decimal places.

a) What was the aggregate output per capita in Atlantis at the beginning of 2018?

b) What was aggregate output in Atlantis at the end of 2018?

c) What was the population in Atlantis at the end of 2018?

d) What was aggregate output per capita in Atlantis at the end of 2018?

e) What was the annual growth rate of per capita output in Atlantis during 2018?

Is there extensive empirical evidence supporting the Lewis two-sector model? Give examples and details on those examples for the relationship between growth and inequality.

what are the microeconomic and macroeconomic indicators of Guyana, Barbados and Cayman

Consider the following marginal benefit (demand) curves of two individuals for a certain good: MB_A(q) = 100 – q and MB_B(q) = 300 – q.

Consider the Marginal Private Costs of providing Fireworks in The Park, MC(q) = 50 + q.

1. Find q^M, the amount of Fireworks in the Park provided by the Market, when individuals provide the good with no co-operation and act only in their self-interest.
2. What is the efficient level of Fireworks in the Park, q*?
3. Person B brings a friend to the park (person C), with the same MB curve as theirs (MB_C = 300 – q). Find the new quantity provided by the Market (q^M) and the new efficient level of Fireworks in the Park (q*).
4. Despite being visually appealing, fireworks are known to cause negative externalities such as noise pollution and increased deaths by heart attacks in dogs. We estimated the marginal external costs of Fireworks in the Park, MEC (q) = 70 + q. What is the new efficient level of Fireworks in the Park? Consider the MSB curve found in part f, which includes person C. How does this new efficient allocation compare to the Market equilibrium, q^M, found in f?

You have decided that your coffee habit has become too expensive! You currently purchase a large speciality coffee from the local cafe twice a day. Each coffee costs you $4.74. You have decided to purchase a $105 high-end coffee maker so you can make your coffee at home. After the cost of coffee, syrups, whip cream, etc., the cost of making your coffee at home is $1.81. By making your own coffee, how much money do you save over the first year?

Explain why each of the following statements is True, False, or Uncertain according to economic principles. Use diagrams where appropriate. Unsupported answers will receive no marks. It is the explanation that is important.

1. The transaction of a consumer who buys a “meal-kit” sent to their home adds less to GDP than a similar consumer who goes out to a restaurant for the same meal.

2. When Canada legalized cannabis consumption it likely led to an increase in Canadian GDP and an increase in general economic well-being.

3. In an economy with no government and no foreign sector, an increase in the marginal propensity to consume would result in a decrease in the size of the aggregate expenditure (AE) multiplier.

4. When inventories fall below planned levels, firms increase production so national income rises.

1a) Arthur sells $100 worth of cotton to Bob. Bob turns the cotton into cloth, which he sells to Camille for $300. Camille uses the cloth to make prom dresses that she sells to Donita for $700. Donita sells the dresses for $1,200 to kids attending the prom. Determine the GDP in two ways; the value-added method, by computing value added at each stage of production, and the final sales value method.







1b) Why might the GDP be a poor measure of production in an economy? Fully detail 3 reasons.







1c) Why might the CPI index be a preferred measure of price movements compared to the GDP deflator?







1d) Why might the PCE index be a preferred measure of price movements compared to the CPI index?

Maria consumes only two goods: pens and notebooks. Currently, pens cost $1 each and notebooks cost $3 each. Maria’s income is $15. The tables below show the total utility Maria receives from consuming various quantities of each of the goods. calculate the optimal consumption bundle for Maria. (Note: for full credit you must provide the correct quantities of pens and notebooks AND fill in as much of Table 3 as was necessary to arrive at your answer.)

#of Notebooks Total Utility # of Pens Total Utility

0    0 0 0

1    75 1 40

2    135 2 60

3      185 3 75   

4 230     4 87

5 . 270 5 97

6 300 6 105

7 320 7 111

PART I: • You live on the outskirts of a small town, and are considering investing in one of three different apple orchards, as a way to supplement your income and help pay for your college tuition. You are presented with the following four scenarios, and must discern the type of good involved in each, as well as the incentives associated with the use of each orchard. • Orchard A: You would be the sole owner of Orchard A. There is a fence around the orchard which restricts access, and you could pick the apples to keep for yourself or to sell to others. The apples would be of very high quality, since you would would wait to pick the apples at their ideal ripeness, and may be willing to invest in fertilizing and trimming the apple trees to promote healthier growth. 1. What type of Orchard is Orchard A? (a) Public Good (b) Private Good (c) Club Good (d) Common-resource Good 1 • Orchard B: Orchard B is managed by a restricted group of owners in a Cooperative. Access to the Cooperative is limited to only 20 members who join and pay dues. Members are free to pick as many apples as they would like at any time, as there are many more apples than the limited number of members would ever want to pick to sell or consume. Non-members are not allowed access to the orchard. 2. What type of Orchard is Orchard B? (a) Public Good (b) Private Good (c) Club Good (d) Common-resource Good • Orchard C: Orchard C is available for anyone in town to access. There are no fences or barriers, and fruit may be picked by anyone at any time. You are free to sell or consume any apples you pick. Due to the unlimited access and large number of patrons, each apple you pick means fewer apples for other citizens to enjoy. The orchard is funded by tax revenue from the city. 3. What type of Orchard is Orchard C? (a) Public Good (b) Private Good (c) Club Good (d) Common-resource Good • Now consider all 3 orchards to answer the following questions: 4. Which Orchard is least likely to have apples left on the trees in the last week of the apple-picking season? (a) Orchard A (b) Orchard B (c) Orchard C (d) All are equally likely 5. If the costs of maintaining an orchard are prohibitively expensive for a single-owner, which orchard may provide a way for you to enjoy the fruits of Orchard ownership while maintaining a sustainable orchard that can produce high-quality fruit for years to come? (a) Orchard A (b) Orchard B (c) Orchard C (d) All are equally likely

Think of various indicators of development that you would like to see in your concept of “economic development.” Think about why per capita income, as measured, may or may not be a good proxy for these indicators. Can you suggest a better alternative?

Discussion: "Is America to Blame for the Drug Wars in Mexico?"

From 2007 to 2009, nearly 10,000 people in Mexico died in drug-related violence. Who or what caused this? Some argue that it is Americans' insatiable demand for illicit drugs and the constant flow of guns from the United States, which arms the drug cartels. Others blame Mexico’s own government, which, they claim, is so corrupt that it cannot clamp down on the cartels. Unable to ignore the rising violence spilling over the border, Congress approved $700 million in security aid for Mexico and promised to increase the number of federal agents and intelligence analysts. Officials on both sides wonder whether this will make a dent in the problem.

1. Should Mexico’s government take full responsibility for what goes on within its own borders? Or should the US Government take some of the responsibility for the flow of Drugs into the USA and the drug war violence inside Mexico?