1. Given the products below and the events that affect them, indicate what happens to demand, supply, equilibrium quantity, and equilibrium price in a competitive market.Identify the determinant of demand and supply that causes the shifts. Provide a graph with your explanation.

(a)Beef.Chicken prices fall because of a decline in the cost of feeding chickens.

(b)Bread.Many consumers adopt a low carbohydrate diet and avoid bread products; the price of flour falls for bread producers.

2.Recent data for the U.S. reveal the following (all figures in millions).

Total population

327.0

Under 16 or institutionalized

69.3

Employed

139.1

Unemployed

14.6

Use the data to find the following:

a.What is the unemployment rate?

b.What is the labor force participation rate?

c.Assume that 5 million college students graduate from college and start searching for a job, what is the unemployment rate? Did it change?

d.What type of unemployment are the college students?

e.Did the labor force participation rate change with college students searching for a job? If so, what is the new rate?

3.Suppose an economy produces only one good. In the base year, production was 8 units at a price of $10 each. The next year, production increased to 9 units and the price of the good increased to $12.

1. If the price index is 100 in the base year, what is the value of the price index in year 2?

b.What is the growth rate from year 1 to year 2?

4.The table below gives the purchases of a typical consumer in a country comprised of one large city. These consumers purchase only restaurant meals and parking. The year 2016 is the reference base period.

Item

Quantity 2016

Price 2016

Quantity 2017

Price 2017

Restaurant Meals

100

$10.00

100

$12.00

Weeks of parking

50

$100

50

$97.50

a.Calculate the nominal GDP of both years.

b.Calculate the real GDP of both years.

c.If the price of restaurant meals and parking were to increase to $13 and $101 in respectively in 2018 but the quantities were the same as in 2017 would there be an increase in real GDP from 2017 to 2018? Why or why not?