1. Initially, suppose Contente uses 1 million hours of labor per week to produce rye and 3 million hours per week to produce jeans while Dolorium uses 3 million hours of labor per week to produce rye and 1 million hours per week to produce jeans. Consequently, Dolorium produces 24 million bushels of rye and 32 million pairs of jeans, and Contente produces 12 million bushels of rye and 72 million pairs of jeans. Assume there are no other countries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of rye and jeans it produces. 2. Reserve requirements-Any changes to Table 15.1? (textbook) Go to the Fed's Web site, www.federalreserve.gov, and select "Monetary Policy." Click on "Policy Tools," then "Reserve Requirements." On that page, scroll down and read the table labeled "Reserve Requirements." Does any part of Table 15.1 need updating? If so, prepare a new, updated table. Scroll down further and look at the table labeled "Low-Reserve Tranche Amounts and Exemption Amounts since 1982." Does Fed policy regarding reserve requirements change fairly often? Explain. 3. Consider a market where supply and demand are given Qs = -20 + P and Qd = 140 - 4P. Suppose the government imposes a price floor of $30, and agrees to purchase any and all units consumers do not buy a 4. A man is planning to retire in 20 years. Money can be deposited at 6% compounded monthly, and it is also estimated that the future general inflation (f) rate will be 5% compounded annually. What monthly deposit must be made each month until the man retires so that he can make annual withdrawals of $40,000 in terms of today's dollars over the 15 years following his retirement? (Assume that his first withdrawal occurs at the end of the first six months after his retirement.) 5. St Atanagio is a remote island in the Atlantic. The inhabitants grow corn and breed poultry. The accompanying table shows the maximum annual output combinations of corn and poultry that can be produced. Obviously, given their limited resources and available technology, as they use more of their resources for corn production, there are fewer resources available for breeding poultry. 6. Visit the site: Wheaton, IL Sanitary District. This tour of a wastewater treatment plant is an example of a high-volume, public project. How is capacity defined at a wastewater treatment plant? Throughout the year, the demand on capacity can vary significantly. How do they meet peak demand? What are the constraints involved in changing the capacity of a facility like this
