Choices of how you allocate your time are never easy, but you need to make those choices if you are to be successful in your studies at URI. Consider the plight of BOB, a student dealing with the choice of allocating his time between studying Math and Demographics. The situation facing BOB could be represented by which of the following 'grade possibility curves' where we measure grades in Demographics on the horizontal axis and the grades in Math on the vertical axis. Use this diagram to answer the following questions.
1. The decision to lower total time spent studying without any reduction in time spent studying Demographics.
2. The decision to allocate more time to studying and less time to TV.
3. The decision to maintain the time spent studying, but increase the time spent studying math.
Which of the following diagrams would best represent the situations described below in the hypothetical surveys?
4. The results of a survey of students in introductory economics courses which found a positive relationship between the scores on a math pretest (X) and their grade in economics (y).
a. A b. B c. C d. D e. E
5. A review of the post WWII data reveals that real interest rates (y) tend to be high when inflation rates (x) are low.
a. A b. B c. C d. D e. E
6. A survey of college students attitude toward welfare reform was recently conducted. In that survey students at 50 universities were asked whether they supported welfare reform. One of the findings of the survey was that there appeared to be no evidence of a relationship between median family income of the students (y) and the percentage of the school's students who reported that they supported change in welfare policy (x)-that the percentage of support tended to be the same at all of the schools.
a. A b. B c. C d. D e. E
7. One of the issues that the authors of your text highlight is the inflation-unemployment tradeoff. There seems to be evidence that there is a negative relationship between the level of unemployment (y) and the inflation rate (x): as the inflation rate increases we see a decrease in the unemployment rate. This result would best be represented in which of the scatter diagrams.
a. A b. B c. C d. D e. E
Use the Supply and Demand Graphs below to answer the following questions.
8. The crisis is Southeast Asia has forced many investors to reconsider their investment decisions. What impact will the financial crises in Asia have on the market for stock in Asia?
a. A b. B c. C d. D e. E
9. Gold has long been recognized as a hedge against inflation - as the asset that people prefer when inflation rises - and in recent days we have seen the price rise on new fears of inflation.
a. A b. B c. C d. D e. E
10. There is a new technology in window washing-now competing with the scaffolding that can cost $20,000 we have single seats that look like swings and cost only $500. What will this new technology do to the price of washing windows on our cities' skyscrapers?
a. A b. B c. C d. D e. E
11. The impact on the market for electric cars of a new, cheaper battery.
a. A b. B c. C d. D e. E
12. The impact on the market for apartment rentals in the Kingston area of the recent building boom and the lower enrollments at URI.
a. A b. B c. C d. D e. E
13. The president has been looking for some support for the extension of the NAFTA agreement to Chile - which happens to be a producer of salmon that costs substantialy less than American salmon. What will be the impact on the market for salmon of a decision to allow Chile to import its salmon to the US?
a. A b. B c. C d. D e. E
14. The impact on the market for plumbers in New York City of the recent lifting of the ban on garbage disposers.
a. A b. B c. C d. D e. E
14. The impact on the market for package delivery of the recent settlement with UPS that resulted in higher wages.
16. What would happen to the market for beef with the release of a new study linking higher beef consumption to higher cholesterol levels. We would expect:
17. There has been a report of a decrease in consumption of oil and an increase in the price. This could best be explained by:
18. In class we talked about alternatives open to a national leader looking to expand the possibilities open to his people. Which of the following alternatives to war was offered by Adam Smith?
19. If you found policy makers in a position where they could forecast that price would rise as a result of a public policy but that they were unable to forecast the impact on consumption, then you would expect that the policy caused:
20. Which of the following would lower a student's estimate of the cost of a year's college education?
21. Below is the possibility curve of a student in an MBA program attempting to allocate her time in a way to balance peace at home with good grades in the program. What would happen to the curve if the student developed a better way to study which would increase the efficiency of time spent studying?
22. Stephen Works, the owner of SDI, a rapidly expanding computer services business which he started a few years ago, has been told by his accountant that profits for the next five years, the firm's expected 'lifetime', should total $250,000 on revenues of $1,500,000 and labor and material costs of $1,250,000. He has also been approached by WBS (World Business Systems) to sell his business. They are willing to pay him $500,000 for the business. Should he take the deal? What is the profit of SDI after the offer?
What are the possibilities open to some potential trading partners? As a first step toward answering this question we can look at the following production possibility curves for two countries producing Naugahyde and Liveries.
23. What can you tell about the price of liveries in Empire B?
24. Which of the following events would lead to a decrease in the price of naugahyde in empire B?
25. Which of the set of demand curves below is most likely to be representative of the relationship between the price of gasoline (P) and consumption of gasoline (Q) in Japan (J) and the US (US)? What we know about the situation in the two countries is that an increase the price of oil is forecast to have a minimal impact on the level of oil consumption in the US, while in Japan consumption is forecast to drop substantially.
Students and teachers generally believe that there is a relationship between the number of hours one studies (T) and the grade one receives (t). You should use the following graphs to answer the next two questions.
26. Which diagram best captures the situation if we believe that there is a positive relationship between the number of hours one studies (T) and the grade one receives (t).
a. A b. B c. C d. D
27. If in fact we found that the grade increases as a student spends more time studying only up to a certain point and then the grade begins to fall with more hours studying, which of the graphs would describe this relationship?
a. A b. B c. C d. D