[SOLVED] ECO 102 Assignment 1

Name: [SOLVED] ECO 102 Assignment 1
Brand: Assignment Chef
SKU: 53255
Price: 25 USD
Availability: InStock
Rating: 5 (1 reviews)

5.0 1 customer review Digital download

Digital download

$25.00

Availability: In stock
Checkout: One item

Need a hand?

Message us on WhatsApp for payment or download support.

ECO 102 Assignment 1 Due on February 14 @ 11:59pm Question 1 (10 marks)

The country of Emmental has the following firms, whose information is displayed in the accompanying table (in thousands). Assume that no international trade exists and that each firm sells all goods/services either to the population of Emmental as finished goods or as an intermediate good to another company.

a. Find the missing information (in thousands). Show your work. b. Find the GDP of Emmental using the value-added approach. c. Find the GDP of Emmental by summarizing the finished goods only. Is your result the same as in part b? Why and/why not. d. Find the GDP of Emmental using the income approach. Is your result the same as in part b? Why and/why not. Note: business profits are income to business owners in terms of returns to capital. Question 2 (10 marks) Suppose coffee and scones are the only two products produced in country Z. According to the information below:

Year	2019		2020
	Price	Quantity	Price	Quantity
Coffee	$1.75	250	$3.25	375
Scones	$3.75	350	$6.00	375

a. Using 2019 as the base year, find the real GDP and the GDP deflator in both years.

b. Using 2019 as the base year, find the real GDP growth rate between 2019 and 2020

c. Using 2020 as the base year, find the real GDP growth rate between 2019 and 2020

d. Use 2019 as the base year, and assume its CPI is 100. Find the CPI in 2020. Find the inflation from 2019 and 2020. e. Using the information in part d, find the real GDP growth rate between 2019 and 2020. Question 3 (5 marks)

Below are the 2024 3rd Quarter Canadian GDP data from the Statistics Canada. https://www150.statcan.gc.ca/t1/tbl1/en/cv.action?pid=3610010401Find the relevant information of the following parts to the best of your judgement.

Gross domestic product, expenditure-based, Canada, quarterly (x $1,000,000) Estimates Q3 2024 Durable goods 56,026 Semi-durable goods 26,577 Non-durable goods 98,024 Services 240,426 Non-profit institutions serving households' final consumption expenditure 11,571 General governments final consumption expenditure 164,760 Residential structures 60,589 Non-residential structures 46,169 Machinery and equipment 23,836 Intellectual property products 18,802 Non-profit institutions serving households' gross fixed capital formation 1,065 General governments gross fixed capital formation 32,767 Investment in inventories 24,756 Exports of goods 190,890 Exports of services 54,981 Imports of goods 198,312 Imports of services 54,096 Statistical discrepancy 341 Gross domestic product at market prices 799,172 a. Find the corresponding components of GDP under the expenditure approach for: C, G, I, and NX b. Find the GDP under the expenditure approach. Show that it is consistent with the estimates provided above. Question 4 (5 marks) Based on the information below, find your best estimates of the values in the questions. Household consumption 1800 Household purchase of used cars 500 Imports 900 Government purchases of goods and services 600 Sales of new homes and apartments 450 Sales of existing homes and apartments 750 Exports 450 Government payments to retirees 675 Government GST rebate payments 300 Household purchases of durable goods 900 Household purchases of nondurable goods 300 Beginning-of-year-inventory 600 End-of-year inventory 900 Business fixed investment 400 Household investment in the stock market 390 Labor income 1950 a. From the above table, estimate the (nominal) GDP. If you exclude any item, provide your reasoning. b. What is total expenditure on services? c. What is total capital income? Question 5 (10 marks)

Suppose a typical college or university student spends money primarily on the products in the following table. Use 2019 as the base year to construct a CPI for the students. Assume the 2019 CPI is 100.

Item	Quantity		Price
Item	2019	2020	2019	2020
Pizzas	200	160	$20	$22
Chicken wings	165	200	$7	$7.50
Room and board	1	1	$10,000	$10,800
Textbooks	8	6	$150	$180

a. Find the cost of the base year basket (cost of living) in 2019. And find the weights of each component in this basket. Which item do you expect to have the largest impact on the students’ cost of living? Explain briefly. b. Find the cost of the base year basket (cost of living) in 2020. Find the rate of inflation without finding the CPI. (Hint: we can simply look at the percentage change in the cost of base year baskets) c. Find the level of CPI in 2020. d. Some analyst argues that as the main food price (pizza) increase by 10% and textbook prices increases by 20%. Students must face a huge rise of burden. Do you agree? Explain. Question 6 (10 marks) a. Use the table on the price of coffee beans and the Consumer Price Index (CPI) to answer the questions. Please round all answers to the nearest whole number.

	Price per pound	CPI
2010	$10	133
2011	$17	170

i. What is the inflation rate between 2010 and 2011? ii. How much percent did the price of coffee bean rise between 2010 and 2011? What are some reasons that this is different from the inflation rate? b. Suppose Felix, a recent graduate of University of Toronto School of Medicine, is presented with the following job offers.

City	Annual Salary	CPI
Mount Sinai Hospital, Toronto, ON	$199,000	150.2
Montreal Sacred Heart Hospital, Montreal, QC	$170,000	105.8
Vancouver General Hospital, Vancouver, BC	$250,000	216.7

i. Which offer would you advice Felix to accept considering the “real units” or purchasing power? ii. Suppose the inflation rate in Toronto, Montreal and Vancouver are 2%, 1% and 3% per year respectively. The salary growth rate at Mount Sinai, Montreal Sacred Heart and Vancouver General are 3%, 1.5%, and 3.5%. Find the real rate of growth of the annual salaries (the approximation method is sufficient). iii. Following the previous part, would you revise your advice in part i given the new information? Why and why not. iv. Since Felix is searching for job right now, what type of unemployment is he considered by the Statistics Canada? Or is he not in the labour force? Explain with your reasonings. v. Once Felix accepts his offer, how will this impact the unemployment rate in Canada (up or down)? Explain. Question 7 (10 marks) Consider the following scenarios and explain how it affects the official unemployment rate.

a. Due to AI, many full time jobs a lost, but an equivalent number of part-time jobs are created.

b. Many high school and university students start to earn part-time income as social media influencers, while before they are full time students without any employment. c. As AI replaces many old jobs, these workers are laid off, and they go back to school to develop new skills. d. When auto drive becomes more common, former drivers lose their job and stop searching for work. e. With the advance of health care technology, more and more people who were unable to work due to long-term illness join the labour force and become employed. Question 8 (10 marks) Given the following scenarios, classify whether they belong to frictional, structural, or cyclical unemployment. a. Mark, a former accountant, moves to Calgary from Toronto, and look for an accounting position. b. Considering the potential 25% tariff by US on Canadian exports, manufacturing firms may have to cut jobs. c. The latest union strike successfully achieved wage increase for its members. However, potential job seekers now face less openings as the firms have to cut costs by hiring less. d. In order to keep up with inflation experienced workers seek higher paying openings more frequently by switching jobs. Question 9 (5 marks)

The diagram below summarizes the actual unemployment and the natural rate of unemployment (equilibrium unemployment rate) Note: the natural rate of unemployment is the rate of unemployment when the economy is operating in operating in equilibrium, i.e., not in recession nor over heating.

Find the cyclical unemployment rate in 1983, 1993, and 2009. Is the economy in recession or over heating in these years? Explain briefly. Question 10 (10 marks)

Consider a labour market supply and demand for a local economy. The potential labour force is 6300 people. (Note: the labour supply may not be the same as the potential labour force due to frictional unemployment.)

a. Find the current equilibrium wage and equilibrium number of workers employed. Is there any structural unemployment at this equilibrium? b. Compared to the potential labour force, what is the currently unemployment rate at the equilibrium? What is this level of unemployment rate referred to as? c. Find the frictional unemployment rate at the equilibrium. d. Suppose a new minimum wage law stipulates that the wage rate cannot fall below 11$. How many people will be unemployed? What type of unemployment is this? e. Suppose at $11, the potential labour force is 8100 people. Find the structural and frictional unemployment rate. Question 11 (5 marks) In year 2000, Jordan has $50,000 for saving. He wants to retire in 2020 years with $1 million dollars. a. What is the rate of growth he must achieve on his investment? b. Suppose the CPI in 2000, CPI2000 = 100, and the inflation rate is 2% per year. What is the price level in 2020? c. Use the year 2000 as the base year, what is the $1 million dollar in $2020 worth in terms of 2000 dollar? Question 12 (10 marks)

Consider the following production function for a fictional economy: Y = AK0.5L0.5 where K is the capital input and Lis the labour input in terms of number people. Y is the real output. Assume Lis the same as the entire population.

a. Show that the real output per capita is: y = AK0.5 where y = Y/L, is the real output per capita, and K = K/L, is the capital stock per capita. Note: since L is the entire population under the assumption, the real output per capita is the real output per worker, i.e., a measure for labour productivity. b. Show that in this set up, there is constant returns to scale in real output (Y) and NOT in output per capita (y). c. Suppose K = 100, A=0.5, show that when the population (L) grow from 100 to 1000, the real output per capita falls dramatically. Do you agree that Malthusian trap theory is true in this set up? d. Show we can escape Malthusian trap by increasing capital stock (K), Hint: one way is you can show that the real output per capital may NOT decrease when population grows significantly.