Question: Determine the effect on GDP for the

> Which portion of the Laffer curve did the supply-siders argue we were located when they recommended tax cuts and predicted a rise in tax revenues? Where on the Laffer curve were we in fact located?

> According to Keynesian economics, what impact would a balanced budget amendment to the constitution requiring the federal government to balance its budget annually have on the economy?

> If your answer to #1 above was yes, what do you think would happen to your taxes? What would happen to your private health insurance premiums? Would you come out ahead or not?

> Should government ensure basic comprehensive medical care for all citizens as a basic human right and pay for this through general tax revenues? Why or why not?

> What is the long-run impact of a decrease in aggregate demand on the price level and real GDP?

> What is the long-run impact of an increase in aggregate demand on the price level and real GDP?

> Why is the long-run aggregate supply curve vertical?

> Why is the short-run aggregate supply curve upward sloping?

> Evaluate the following statement: “A cartel will put an end to price war, which is a barbaric form of competition that benefits no one.”

> Assume a research firm collects survey sales data that reveal the relationship between the possible selling prices of hamburgers and the quantity of hamburgers consumers would purchase per year at alternative prices. The report states that if the price o

> What happened in terms of the AS/AS model during the Great Recession?

> a. If total spending increases, or decreases, does this create a tradeoff between unemployment and inflation? b. What could cause a simultaneous decrease in unemployment and inflation? What could combat stagflation?

> If AD was increasing quite a bit pushing the economy toward full employment, but was creating politically unacceptable high rates of inflation, what might the government want to do with its spending and/or taxes to reduce the inflationary pressures? What

> What impact would a dramatic increase in the world price of oil have on the national economy?

> What impact would an increase in the nation's money supply or the federal government's budget deficit have on the real GDP and price level in the macroeconomy? What phase of the business cycle might this create?

> Can equilibrium occur below full employment? Why, or why not?

> What can cause an increase in AD and therefore the real GDP and price levels?

> If workers push for higher wages and receive them, could this create inflation? If so, what kind of inflation would this create?

> Which type of inflation is usually most pronounced during the expansionary phase of the business cycle?

> If you got a 7% pay raise did your real income necessarily rise by 7%?

> What might be a general distinction between oligopolists that advertise and those that do not?

> What should happen to the money supply to combat demand-pull inflation?

> Why do most homebuyers hope for inflation?

> Why did the high rates of inflation during the 1970s hurt Savings and Loans so much?

> Why do most banks and credit card companies offer interest rates on their cards which vary with the current yield on newly issued U.S. Treasury bills?

> What are some examples of inferior products?

> What should government do with the money supply to combat a recession? Inflation?

> What should government do with its spending and taxes during an upturn in the business cycle? Why?

> What should government do with its spending and taxes during a recession? Why?

> What is the major economic problem during the expansionary phase of the business cycle?

> Why is a slow growing economy a problem during a recession?

> Ace Manufacturing produces 1,000 hammers per day. The total fixed cost for the plant is $5,000 per day, and the total variable cost is $15,000 per day. Calculate the average fixed cost, average variable cost, average total cost, and total cost at the cur

> What are the two major problems associated with a recession?

> What are some barriers to entry that may prevent potential competitors from entering a market?

> If a competitive industry expands and higher wages must be paid to attract more workers then what will the long-run supply curve for this industry look like?

> If a competitive industry is currently losing money, what can be expected to happen to the number of sellers, the price of the product, the volume of output and losses in this industry over time?

> What is the general cause of all recessions? All expansionary phases of the business cycle?

> If a firm is producing where MR =MC, and at that output level TR = $4,500, TC = $5,000, and TVC = $4,000 per week, is the firm making or losing money? How much? Should the firm shut down?

> If a firm has TFC = $2,000 per day, and is currently losing $1,500 per day, should the firm shut down?

> If a profit-maximizing firm is producing an output level in which marginal revenue equals marginal cost, then is this firm earning a profit?

> If a profit-maximizing firm is producing an output level in which marginal revenue exceeds marginal cost, should it produce more, less or the same?

> Assume the supply and demand curves for a good are given by the following equations: Qd = 1000 - 20P ; Qs = 5P. What is the equilibrium price and quantity?

> a. Construct the cost schedule using the data below for a firm operating in the short run. b. Graph the average variable cost, average total cost, and marginal cost curves.

> Why do you think "rock" stars charge concert ticket prices below what they could charge and still sell out their performances?

> What can we say about the demand and supply curves for products which are "free", like matches, toothpicks, and kittens?

> Is the price system a "just" or "fair" way to allocate products? What about medical services?

> Who does the demanding and the supplying in the labor market? The loanable funds market?

> What can you say about the price of campus parking permits if there never seems to be enough places to park even when you have a permit?

> What causes the business cycle?

> Is it possible for real GDP to increase and there to be no increase in employment?

> Which is a better indicator of growth in job opportunities: an increase in nominal GDP or real GDP?

> How could nominal GDP increase but real GDP remain the same?

> Consider this statement: “Total output starts falling when diminishing returns occur.” Do you agree or disagree? Explain.

> What would happen to GDP if a significant number of house-spouses who were previously staying home to care for their children began taking jobs and placing their children in day-care? Would the nation's well-being necessarily be better off?

> If the illegal drug trade was legalized what would happen to GDP?

> Which of the components of GDP must increase if we are to experience greater rates of economic growth?

> How are price controls related to anti-poverty programs?

> Some people have argued that the American workers' movement would have been more successful in achieving its goals if it would have been more organized across labor markets; if it would have adopted a more European style of creating a "Labor" political p

> Some people have argued: "Any gains made by unions in the form of higher wages will create lower wages for non-unionized workers." Leaving side whether this is actually the case or not, what is the economic logic behind such an argument?

> For each of the following determine the impact on the demand or the supply of labor and the effect on the equilibrium wage and quantity of labor employed. a. An increase in the price of capital. b. A union is formed which uses collective bargaining to ob

> What is the principle strategy of an inclusive (industrial) union in order to increase wages of its members?

> What is the principle strategy of an exclusive (trade) union in order to increase wages of its members?

> How would one calculate the profit an employer earns from the employment of workers?

> Suppose you own a video game store. List some of the fixed inputs and variable inputs you would use in operating the store.

> Why does the supply curve slope upward?

> If males (whites) are paid more than females (blacks) is that proof of discrimination?

> What is the best way to combat poverty over time?

> What are the three major goals of any short-run poverty relief program?

> Typically, how long do those in poverty whom are receiving public assistance (welfare) remain on the welfare roles?

> Based on real-world evidence, what is the profile of a family in poverty?

> Describe how investment in human capital could help solve the poverty problem.

> Why does the demand for labor slope downward?

> What are some strategies that firms use to collude?

> In a non-collusive oligopoly if one firm increased its price what would the other firms likely do? What about a price decrease? How is this related to a kinked demand curve?

> What short-run effect might a decline in the demand for electronic components for automatic teller machines have on Computech’s average total cost curve?

> What effect would a successful advertising campaign differentiating a product from one's competitors have on a monopolistically competitive firm's demand and its elasticity of demand? What does this do to the firm's profits? You may have heard the slogan

> Which market structure do most real world markets approximate?

> What happens to employment opportunities and wages paid in all non-competitive product markets? Why?

> How are the professional sports leagues like a cartel?

> What kind of agreements may cartels work out to reduce competition among themselves?

> How can cartels sow the seeds of their own destruction?

> If a company charges different prices to different customers as a result of differences in providing the product to these different customers then is that price discrimination?

> Why don't monopolists charge the highest possible price market demand will bear?

> How can a monopoly maintain its single-seller status?

> What evidence suggests that some government regulation may reduce competition in practice?

> Charles loves Mello Yello and will spend $10 per week on the product no matter what the price. What is his price elasticity of demand for Mello Yello?

> Why does a monopolist produce less and charge a higher price compared to a competitive market?

> How long can a monopoly earn economic profits?

> If a monopoly is losing money then when should it shut down?

> Can a monopoly lose money?

> What are some relevant public policy questions when government considers breaking up a monopoly?

> If a firm has $20,000 in total fixed costs, is producing 100 units, has average total cost equal to $240, then what is its average variable cost of production?

> Why do marginal costs of production rise?

> Is the "best" quantity of workers to hire where the marginal productivity of the last worker employed is the greatest (which implies an output level in which the marginal cost of producing additional units is the cheapest)?

> Many people search out and purchase "bargains" at garage and yard sales. What are some implicit costs associated with this type of shopping?

> Some companies advertise: "We deal in high volume and pass our savings on to you in the form of lower prices." How could this be?

> Will each of the following changes in price cause total revenue to increase, decrease, or remain unchanged? a. Price falls, and demand is elastic. b. Price rises, and demand is elastic. c. Price falls, and demand is unitary elastic. d. Price rises, and d

> How can the extent to which economies or diseconomies of scale are experienced help us to predict the size and number of real-world firms in an industry?

> If a firm wished to minimize its cost of production then what output level should it produce?

> Why does the marginal cost curve intersect the average variable and average total cost curves at their respective minimum points?