In 2020 the United States will use some $10 trillion of manufactured goods as measured by the price level as it will be in 2020—producing $9 trillion and paying for the extra $1 trillion by exporting services. Let’s use that as our unit of the quantity of manufactures—$1 worth at 2020 prices is equal to one unit of manufactured goods. And let’s set our index of the price of manufactured goods in 2000 equal to 1.

Suppose the supply curve for manufactured goods has constant-returns-to-scale, with no producer having (much of) an opportunity cost advantage over any other.

Suppose the demand curve for manufactured goods is a straight line linear function such that an increase in the price from its 2000 value of 1 to a value of 2 would lead to a reduction in the quantity demanded by $1 trillion.

What will be the equilibrium price of manufactures in 2020?

The mean cost of domestic airfares in the United States rose to an all-time high of $400 per ticket. Airfares were based on the total ticket value, which consisted of the price charged by the airlines plus any additional taxes and fees. Assume domestic airfares are normally distributed with a standard deviation of $105. Use Table 1 in Appendix B.

a. What is the probability that a domestic airfare is $530 or more (to 4 decimals)?

b. What is the probability that a domestic airfare is $240 or less (to 4 decimals)?

c. What if the probability that a domestic airfare is between $300 and $500 (to 4 decimals)?

d. What is the cost for the 5% highest domestic airfares? (rounded to nearest dollar)
$ or - Select your answer -morelessItem 5

Since September 11th, the United States has struggled with the possibility of having to exist in a "post--American world." What led to the terrorist attacks and how did America respond? How has America sought to retain its position in global leadership? Is it possible for America to remain on top of a global economy and a "globalized" world?

According to a recent study annual per capita consumption of milk in the United States is 21.5 gallons. Being from the Midwest, you believe milk consumption is higher there and wish to test your hypothesis. A sample of 14 individuals from the Midwestern town of Webster City was selected and then each person's milk consumption was entered into the Microsoft Excel Online file below. Use the data to set up your spreadsheet and test your hypothesis.

1. Develop a hypothesis test that can be used to determine whether the mean annual consumption in Webster City is higher than the national mean.

   H₀: ? _________> 21.5≥ 21.5= 21.5≤ 21.5< 21.5≠ 21.5

   H_a: ? _________> 21.5≥ 21.5= 21.5≤ 21.5< 21.5≠ 21.5

2. What is a point estimate of the difference between mean annual consumption in Webster City and the national mean?

   (2 decimals)

3. At ? = 0.05, test for a significant difference by completing the following.

   Calculate the value of the test statistic (2 decimals).

   The p-value is  (4 decimals)

   Reject the null hypothesis?

   _____NoYes

   What is your conclusion?

There are 1254 machinery rebuilding and repairing companies in the United States. A tool manufacturer wishes to survey a simple random sample of these firms to find out what proportion of them are interested in a new tool design. Assume that we’re dealing with a finite population in the following sub-questions.

(a) If the tool manufacturer would like to be 95% confident that the sample proportion is within 0.01 of the actual population proportion, how many machinery rebuilding and repairing companies should be included in the sample (Hint: use the conservative value of p for when p is not given)?

b) Suppose the tool manufacturer has carried out the study, using the sample size determined in part (a), and 39.0% of the machinery rebuilding and repairing companies are interested in the new tool design. Which of the following 95% confidence interval for the population percentage? Show work.

A. CI = (0.3710, 0.4091)

B. CI = (0.3613, 0.4187)

C. CI = (0.3572, 0.4228)

D. CI = (0.3338, 0.4462)

(c)Which of the following is the best interpretation of the confidence interval from the previous part?

A. After performing a large number of samples, we expect to arrive at the same confidence interval as above 95% of the time.

B. We are 95% confident that the unknown population parameter, π, falls in this interval.

C. 95% of all the data values in the population fall within the interval.

D. There is a 5% margin of error in our statistical analysis.

Use quintiles to briefly summarize the degree of income in-equality in the United States. How and to what extent does government reduce income inequality?

a. Assume that Al, Beth, Carol, David, and Ed receive incomes of $500, $250, $125, $75, and $50, respectively. Construct and interpret a Lorenz curve for this five-person economy. What percentage of total income is received by the richest quintile and by the poorest quintile?

b. How does the Gini ratio relate to the Lorenz curve? Why can’t the Gini ratio exceed 1? What is implied about the direction of income inequality if the Gini ratio declines from 0.42 to 0.35? How would one show that change of inequality in the Lorenz diagram?

c. Why is the lifetime distribution of income more equal than the distribution in any specific year?

The gender wage gap in the United States:

Group of answer choices

proves the existence of discrimination.

may be partially due to factors other than wage discrimination.

proves that men on average invest more in human capital than do women.

indicates that men are on average smarter than women are.

Scenario 18-7
Suppose the following events occur in the market for university economics professors.

Event 1: A recession in the U.S. economy lowers the opportunity cost of going to graduate school in economics to become a university economics professor.

Event 2: A decreasing number of students in U.S. primary and secondary schools decreases the number of students entering college and university.

Refer to Scenario 18-7. As a result of these two events, holding all else constant, the equilibrium quantity of university economics professors will

Group of answer choices

increase.

decrease.

not change.

It is not possible to determine what will happen to the equilibrium quantity.

Scenario 27
Suppose the following events occur in the market for university economics professors.

Event 1: A recession in the U.S. economy lowers the opportunity cost of going to graduate school in economics to become a university economics professor.

Event 2: A decreasing number of students in U.S. primary and secondary schools decreases the number of students entering college and university.

Refer to Scenario 27. As a result of these two events, holding all else constant, the equilibrium wages of university economics professors will

Group of answer choices

increase.

decrease.

not change.

It is not possible to determine what will happen to the equilibrium wages.

Other things being equal, what happens to labor supply in the pear-picking market when the wage paid to apple pickers decreases?

Group of answer choices

The labor supply will stay unchanged until the wages paid to pear pickers change.

The labor supply will decrease.

The labor supply will increase.

The labor supply may fall or rise, depending on the price of pears.

Scenario 22
Sam has two jobs, one for the winter and one for the summer. In the winter, he works as a lift attendant at a ski resort where he earns $11 per hour. During the summer, he drives a tour bus around the ski resort, earning $13 per hour.

Refer to Scenario 22. During the winter months, what is Sam's opportunity cost of taking an hour off work to go skiing?

Group of answer choices

$13

between $11 and $13

$11

less than $11

Your college roommate receives a pay raise at her part-time job from $9 to $11 per hour. She used to work 25 hours per week, but now she decides to work 30 hours per week. For this price range, her labor supply curve is

Group of answer choices

vertical.

horizontal.

upward sloping.

backward sloping.

Which of the following could increase the supply of labor in the market for cranberry pickers?

Group of answer choices

(ii) only

(i), (ii), and (iv) only

(i) and (iv) only

(ii) and (iii) only

In 2007, the United States experienced the biggest jump in food prices in 17 years (The Wallstreet Journal, April 1, 2008). A variety of reasons led to this result, including rising demand for meat and dairy products in emerging overseas markets, increased used of grains for alternative fuels, and bad weather in some parts of the world. A survey compared prices in $ of selected products at grocery stores in the Boston area. The dataset is available under: Files -> Dataset -> Mini-case 2 -> Mini2_Grocery In a report, use the sample information to: Determine whether differences exist in the average prices of products sold at the three stores at the 5% significance level Determine whether differences exist in the average prices of the 11 products at the 5% significance level Determine which stores’ prices differ using Fisher’s Least Significant Difference Method, if it is found that differences exist in the average prices among these stores. Use a 5% significance level.

ABC is a United States company that has a manufacturing subsidiary in Brazil. There have been large changes in the USD/BRL exchange rate over the last 5 years and the company has forecasted the following possible exchange rates and subsidiary values over the next year:

(a) Find the exchange exposure coefficient faced by ABC for its Brazilian subsidiary (i.e. find the b estimate from a regression)

(b) Describe in detail a hedge you could put in place to reduce this exchange exposure over the next 12 months using forward contracts.

(c) Show the effect of the hedge on the value of the subsidiary in $ if each state of the world occurs.

1. As stated in the article, “Economists agree that the United States must continue to rack up debt to prevent a full-blown depression. Otherwise, there won't be much of an economy left to repay the debt once the health crisis is over.”

a) Recessions exact a major toll on individuals, families, firms, and budgets throughout the U.S. A key aspect of proper macroeconomic policymaking is to minimize losses by responding quickly and effectively to downturns through fiscal policy. Explain!

b) There are two alternatives to borrowing: 1) raising taxes to fund the stimulus package; or, 2) do-nothing and wait for the economy to self-correct. Explain why each of those options are flawed.