Question

1. a) If population 16 or older = 208 million and labor force participation rate (LFPR) = 65%, what is the size of the labor force?

            0.65*208,000,000 = 135,200,000

b) In a given year, there are 10 million unemployed workers and 120 employed workers the country of Landia. Calculate the unemployment rate in Landia.

120/10,000,000 = 0.0012%

1-0.0012 = 0.9988

0.9988*100 = 99.88

Unemployment rate = 99.88%

Show all your calculations for full credit.

2. Use either a shift in demand of supply to GRAPHICALLY represent each of the following situations. Also, label the graphs correctly and indicate the changes in equilibrium in each case.

1. Beef market:  Increases in the cost of cattle feed.
2. Air travel market: Reduced number of travelers due to Covid-19 pandemic.
3. SUV market: Reduced gasoline prices.
4. Smartphone market: Technology improvements reduced the cost of manufacturing smartphones.

Four separate graphs please.

3. a) How would economic contraction brought about by Covid – 19 slowdown be represented using production possibilities curve?

b) Repeat a) for improved technology which results in increased productivity?

4. Good                Quantity           Price in 1999                Price in 2000

X                      10                    $5                                $6

Y                      20                    $10                              $10

Z                      5                      $6                                $10

1. Calculate the market basket value for each year. What is the consumer price index in 1999?
2. What is the inflation rate between 1999 and 2000?

Show all calculations for full credit.

Answer 1

Q 1 has been given with solution.I am solving all 4 parts of next unsolved question.

a) Beef market

If cost of cattle feed increases ,less no of people will rear cattle for supplying in beef market because cost of production increases which will reduce profit margin.

The supply curve will shift leftward.

This will create the problem of "excess demand" .The buyers will compete to buy beef and ready to pay higher prices. When price will be increased by sellers , due to law of demand qty demanded decreases ( contraction) and qty supplied increases (extension).

Equilibrium price will increase and equilibrium qty will decrease.

b)

c)

d)