Question 1:

Suppose that work hours in New Zombie are 300 in year 1 and productivity is $18 per hour worked.

a) What is New Zombie's real GDP? $_____________

If work hours increase to 320 in year 2 and productivity rises to $20 per hour, what is New Zombie's rate of economic growth?

b) Rate of growth = __________%

Question 2:

The per-unit cost of an item is its average total cost (= total cost/quantity). Suppose that a new cell phone application costs $150,000 to develop and only $0.50 per unit to deliver to each cell phone customer.

a) What will be the per-unit cost of the application if it sells 100 units

Per-unit cost = $__________

b) What will be the per-unit cost of the application if it sells 1000 units?

Per-unit cost = $__________

c) What will be the per-unit cost of the application if it sells 1 million units?

Per-unit cost = $__________

Question 3:

Refer to the figure below and assume that the corresponding GDPpointsa,b, andcare $10 billion, $20 billion, and $19 billion respectively.