1.From the data inTable 5.5about demand for smart phones, calculate the price elasticity of demand from: point B to point C, point D to point E, and point G to point H. Classify the elasticity at each point as elastic, inelastic, or unit elastic.

PointsPQA603,000B702,800C802,600D902,400E1002,200F1102,000G1201,800H1301,600

Table5.5

2.From the data inTable 5.6about supply of alarm clocks, calculate the price elasticity of supply from: point J to point K, point L to point M, and point N to point P. Classify the elasticity at each point as elastic, inelastic, or unit elastic.

PointPriceQuantity SuppliedJ$850K$970L$1080M$1188N$1295P$13100

Table5.6

1.Country A has export sales of $20 billion, government purchases of $1,000 billion, business investment is $50 billion, imports are $40 billion, and consumption spending is $2,000 billion. What is the dollar value of GDP?

2.Which of the following are included in GDP, and which are not?

1. The cost of hospital stays
2. The rise in life expectancy over time
3. Child care provided by a licensed day care center
4. Child care provided by a grandmother
5. A used car sale
6. A new car sale
7. The greater variety of cheese available in supermarkets
8. The iron that goes into the steel that goes into a refrigerator bought by a consumer.

8.Is it possible for GDP to rise while at the same time per capita GDP is falling? Is it possible for GDP to fall while per capita GDP is rising?

9.The Central African Republic has a GDP of 1,107,689 million CFA francs and a population of 4.862 million. The exchange rate is 284.681CFA francs per dollar. Calculate the GDP per capita of Central African Republic.

10.Explain briefly whether each of the following would cause GDP to overstate or understate the degree of change in the broad standard of living.

1. The environment becomes dirtier
2. The crime rate declines
3. A greater variety of goods become available to consumers
4. Infant mortality declinesr