ECON 1101: MACROECONOMICS SECTION OL12/ OL14

Midterm Part II: Problem Sets (Be sure to label your answers to the corresponding questions) (25 Points)

1. A market research team has come up with the demand and supply schedules for gasoline in Motorville in the table below. Use these data to analyze the situation in the market for gasoline in Motorville.

Price (cents per gallon)	Quantity demanded (thousands of gallons per week)	Quantity supplied (thousands of gallons per week)
90	80	20
100	70	30
110	60	40
120	50	50
130	40	60
140	30	70
150	20	80

1. Draw a graph showing the demand curve for gasoline and the supply curve of gasoline. Mark the market equilibrium price and quantity in your graph.Make sure to have price on the vertical axis and quantity on the horizontal axis. Otherwise no credit is given. (4 points)

1. What is the market equilibrium price and quantity? (not definition, just state the equilibrium price and quantity based on the information in the table) (2 points)

1. Suppose the price is $1.30. Describe the situation in the market and explain how the price adjusts. (2 points)

1. Now suppose the price is $1.00. Describe the situation in the market and explain how the price adjusts. (2 points)

1. Use the table below to answer the following questions:
   1. Using the information in the table above, calculate the value of GDP for Sandy Island in 2022 (Show your calculation). (2 points)

The information in the table is the economic data for Sandy Island in 2022.

Item	Billions of Dollars
Personal consumption expenditure	900
Government expenditure on goods and services	300
Net indirect taxes	350
Investment expenditure	200
Exports of goods and services	300
Imports of goods and services	500
Depreciation	100

1. Calculate the value of net exports (Show your calculation). (2 points)

1. A labor force survey in Econland records the following data:

Employed: 189,000

Unemployed: 15,000

Not in the labor force: 84,000

a) Calculate the unemployment rate. (show your calculation) (2 points)

b) Calculate the size of the labor force. (show your calculation) (1 point)

4. Suppose that in 2022 a country has a population of 1 million and real GDP of $1 billion. In

2023, the population is 1.1 million and the real GDP is $1.1 billion. What is the real GDP per

person growth rate? (Show your calculation) (2 points)

5. In an economy, 42 million people are in the labor force, 38 million are employed, and 47 million are of working age.

a. How many people are not in the labor force? (2 points)

b. What is the unemployment rate? (show your calculation) (2 points)

6. What is the official U.S. unemployment rate for February 2024? (2 points)

Your answer: ______________%.