Problem Set 1 accounts for 10 points, or 10 % of your course grade. The deadline to submit Problem Set 1 is Friday, September 24 at Noon EST. Your work should be submitted to D2L under Assignment Problem Set 1. Late submissions will not be accepted, and the grade will be 0 (zero) for a late submission.
Problem 1:
In the schedules below for Commodity x, identify which schedule is for Demand and which is for Supply.
Create an equilibrium pricing graph for Commodity x, plotting the Demand and Supply and showing the equilibrium values for this market. Be sure to label all numbers and terms on the vertical and horizontal axes.
______________ Schedule _________________ Schedule
Px Qx Px Qx
8 10 10 40
6 20 8 30
4 30 6 20
2 40 4 10
CONTINUE TO THE NEXT PAGE
Problem 2: (2 points)
A month ago, on August 14, 2021, Haiti was ravaged by a devastating earthquake. Over 2,000 Haitian citizens died, and the small nation, one of the world’s poorest, is struggling to recover from this most recent of several catastrophes.
Click on the link and scan this Wikipedia article to learn about the scope of the devastation from the earthquake.
Create a Production Possibilities Frontier graph to show the Haitian economy before and after the earthquake. Be sure to complete the graph by labeling both axes. From what you discovered in the Wikipedia article, explain what Haiti must do to recover and achieve higher levels of growth in the future.
CONTINUE TO THE NEXT PAGE.
Problem 3: Evaluate the chart showing the Rate of Inflation in Argentina from 2004 to 2019 and answer the question below.
Create two AD AS graphs for the Argentinian economy. Each graph should show the change from a 10.62% Rate of Inflation in 2013 to a 55.55% Rate of Inflation in 2019. The first graph should show that the change is attributed to Demand Pull Inflation; the second to Cost Push Inflation. NOTE: Label the horizontal and vertical axes with what is being measured. There is no need to plot specific values.
CONTINUE TO THE NEXT PAGE.
Problem 4: (2 points)
Examine the FRED chart below for the Unemployment Rate during and after the Great Recession in the United States from December 2007 to December 2019. Answer the questions below.
4A. Draw an AD AS graph for the American economy, showing the effects on real GDP of a change from a 4.8% Unemployment Rate in December, 2007 to a 10% Unemployment Rate in December, 2009. NOTE: Label the horizontal and vertical axes with what is being measured. There is no need to plot specific values on the graph.
4B. Which of the three types of unemployment would account for most of this increase in the unemployment rate?
4C. In what year does the Unemployment Rate finally return to the level of the Natural Rate of Unemployment?
CONTINUE TO THE NEXT PAGE.
Problem 5: (2 points)
Consider the FRED Chart below comparing the unemployment rate for the entire American workforce for the last 20 years, to the unemployment rate of those in the workforce with a college education.
What can you conclude regarding the value of obtaining a Bachelor’s Degree? How does this relationship affect your own choice to attend college to complete the BA Degree?
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