1:

Firm. Value of Product. Value AddedBy: Value Added Equals.

Cotton farmer. Raw Cotton= $3. The cotton farmer. 3

Textile mill Cotton woven into cotton fabric= $5 The textile mill 2

Shirt company Fabric made into a shirt= $17 The shirt company 12

L.L.Bean Shirt sold onL.L.Bean's website= $37. L.L.Bean _____

Total Value Added ______

2: Theemployment-population ratio measures the

A.percentage of the working age population that is not employed.

B.percentage of the working age population that is employed.

C.percentage of the working age population that is in the labor force.

D. portion of the total population that is employed.

3: What advice for finding a job would you give someone who is frictionallyunemployed?

A.Someone who is frictionally unemployed has to find an employer who needshis/her specific skills in the industryhe/she has already worked in.

B.Someone who is frictionally unemployed has to acquire skills necessary to switch industries.

C.Someone who is frictionally unemployed should wait until the recession is over or swich to apart-time job.

D.Someone who is frictionally unemployed need to find another industry to work in.

4:If Parliament eliminated the Employment Insurancesystem,

A.the level of frictional unemployment would increase.

B.the level of frictional unemployment would decrease.

C.the level of frictional unemployment would not change at all.

D.the level of cyclical unemployment would increase.

5:

United States France

Minimum wage Minimum wage

Year. (dollars perhour) CPI. (euros perhour) CPI

1957. $1.00 27 0.19 8

2016 $7.25 240 9.76 106

The percentage change in US real minimum wages between 1957 and 2016 is ______ %. (Round your response to two decimalplaces.)

6: Suppose you were borrowing money to buy a car. Consider the following situations.

Situation1: Suppose the interest rate on your car loan is 21.00 percent and the inflation rate is 20.00 percent.

The real interest rate is ______ %. (Round your response to two decimalplaces.)

7: An artist buys scrap metal from a local steel mill as a raw material for her sculptures. Lastyear, she purchased $7,000 worth of scrap metal. With the steel she produced 10 authentic sculptures that she sold for $1,000 each to a local art dealer. The art dealer then sold all of the sculptures to art collectors for an average of $1,200 each.

The total value added of the artdealer is $ _____ (Enter your response as aninteger.)

8: Suppose that a simple economy produces only the following four goods andservices: shoes,hamburgers, shirts, and cotton. Further, assume that all of the cotton is used in the production of shirts.

Use the information in the following table to calculate Nominal Gross Domestic Product (Nominal GDP) for 2021.

PRODUCTION AND PRICE STATISTICS FOR 2021

Product Quantity Price

Shoes 150 $70.00

Hamburgers 125 3.00

Shirts 75 30.00

Cotton 2,000 0.80

The Nominal GDP for the year 2021 is $ ______

9: An article in the Economist states that"the appeal of GDP is that itoffers, or seemsto, a summary statistic of how well an economy isdoing."In what sense does GDP offer a summary statistic of how well an economy isdoing?

A.GDP can measure happiness among citizensthat is, the more goods an economyproduces, the happier its people arethus indicatingwell-being.

B.Since GDP measures how much an economy produces during a period oftime, it may also indicatewell-being.

C.Since GDP accounts forcrime, pollution, and other socialproblems, it can be used as a rough measure ofwell-being.

D.GDP is able to provide a summary of the goods and services consumed by a typicalperson, thus indicatingwell-being.

10: Ireland is one of the few countries where GDPLOADING...

and GNP differ significantly.(Note that GNP is similar to GNI and is defined as the value of final goods and services produced by residents of acountry, even if the production takes place outside thecountry.) Using GDP perperson, Ireland has thethird-highest income per person in Europe. An article on the Financial Times websitestated, "With GDP being about 20 percent larger thanGNP, Irish people appear(when using GDP perperson) to be richer than what they feel theyare." Briefly explain theauthor's reasoning.

A.Most of the increase in the value of production in Ireland must be due toinflation, making the Irish people look richer than they feel they are.

B.Many Irish workers have jobs in othercountries, which makes the Irish people appear richer than they feel they are.

C.The prices that Ireland charges for its goods and services must be higher than prices in the rest ofEurope, which explains why the Irish people appear richer than they feel they are.

D.A significant portion of production in Ireland is byforeign-owned firms, which makes the Irish people appear to be richer than they feel they are.