ECON 1530 Lecture Notes - Lecture 11: General Idea, Entire Function, Continuous Or Discrete Variable

7. Write a class MetroLine in which you define a new type MetroLine (10 points) A MetroLine is defined to have the following private properties: • A String representing the colour of the line (e.g. blue, red, green, etc. No numbers. It's Montreal, not Manhattan!) • A collection of MetroStation This collection can be either a built in array, an ArrayList, or any other kind of collection you feel would satisfy the requirements of the class. The collection must be able to define an ordering from "beginning" to "end" of the MetroLine. It does not matter which part you consider the beginning and which part is the "end" as long as it is consistent. (We recommend using ArrayList but you are free to do otherwise if you feel it will be casier.) A MetroLine should have the following methods defined: • A constructor which takes nothing as input and performs any initialization necessary to maintain your collection of stations. • A method addstation which takes as input a MetroStation and adds it to the end of your collection. The method can assume the station is not already part of the collection and should return void. Note that the order the MetroStations are added is the same as the path the trains will travel on (or it could be the reverse path as well). • A method hasStation which takes as input a MetroStation and returns a boolean representing whether the metro line has a MetroStation with the same name or not. A method get LineColour which returns the colour of the line. • A method get First Stop which returns the MetroStation representing the first stop of the metro line. If there is no such station (ic, if the collection of MetroStation is empty), your method should return null. • A method get PriorStop which takes as input a MetroStation and returns the stop prior to the MetroStation passed as input. You may assume that the MetroStation passed as input is indeed in the collection of MetroStations If the current station is the first stop on the MetroLine then this method should return null. You may assume that there are no "loops" in the MetroLine That is, no station is present on the same line twice. A method getNext Stop which takes as input a MetroStation and returns the stop after the MetroStation passed as input. You may assume that the Metrostation passed as input is indeed in the collection of Metrostations. If the current station is the last stop on the MetroLine, then this method should return null. You may assume that there are no "loops" in the MetroLine That is, no station is present on the same line twice. For the above methods, you may assume that there is no aliasing issue. That is to say, you can use == to compare the references, or if you are using a type such as ArrayList to maintain your list of stations, you can use the indexOf or contains method defined on an ArrayList.

Please no cursive or typed out

1. (65 points total).

a) (5 points) Fill in the Table below.

b. (10 points) Define the marginal product of labor and explain how it relates to the production function (with N on horizontal axis and Y on vertical axis). What shape does a production function typically take and why? Does this production function take the 'typical' shape?

c)(5 points) Assume that you sell your output to Europe for a US price = $10. The exchange rate is this time is $1.07 per Euro. What is the price of your product in Euros? Please round to 2 decimal places.

d) (5 points) You can hire all the workers you want at $80 per worker. Along with the US price = $10, calculate the number of workers that you will hire and the associated profit in REAL terms (as we did in class, we 'assume away' all other costs of production). Please give me the marginal REAL profit of each worker hired and then add them up and that is the total profit in real terms.

e)(5 points) Inflation data in the US is weaker than the Fed would like and thus, expectations change such that the Fed is less likely to raise interest rates. As a result, the new and updated exchange rate is $1.23 per Euro. What has happened to the value of the US dollar and what is the new Euro price of your product, assuming that your American price stays at $10?

f).(5 points) Given the change in conditions you decide to raise the price of your product in US dollar terms so that the Euro price stays the same as it was before the change in the exchange rate (part c above). What is the new US dollar price? Please show all work.

g) (10 points) What has happened to the marginal revenue product (MRPN) for each worker (has it gone up or down?) and why given the change in price? Be sure to define what the marginal revenue product is and what it means in 'laypersons' terms.

h) (10 points) Given that the US$ price of your product has changed, explain how and why you would change your behavior. Please provide the intuition beginning your answer with... at the same level of labor input I am no longer ......... (please be as specific as possible). Again, explain in REAL terms, not nominal terms.

i. (5 points) Calculate the new level of profits in REAL terms given the change in condition including the change in the exchange rate, the change in the US $ price of your product. and the change in your behavior.

j)(5 points) The Fed has had its eye on inflation for a long time and have been disappointed in that inflation has been too low. Is the change in the value the dollar vs the Euro a welcome development for the Fed? Why or why not? Assume that these conditions changed in a similar way for many US firms.

I've completed this but I want to check my answers. Thanks

1) List and briefly explain three economic variables that shift the Demand Curve.

2) Define opportunity cost. How is opportunity cost used to determine comparative advantage?

3) In the market for calculators we observe that the price has fallen and more calculators are being sold. What might have happened to cause this change?

4) The price of gasoline rises. What would we expect to see happen in the market for cars with high gas mileage (like the Prius)?

5) What is the effect of a price floor (a price set above equilibrium) in the sugar market. Why does the government impose price floors?

6) Define the price elasticity of demand. Why is this concept important in economics?

7) Define the income elasticity of demand. Why is this concept important in economics?

8) List and briefly explain three economic variables that shift the Supply Curve.

9) A firm lowers of price of its product by 10% and consumers buy 5% more of the product. What is the price elasticity of demand for the product?

10) If the price elasticity of demand for a product is elastic, explain what will happen to total revenue when the price is decreased.

11) What is the difference between a change in quantity supplied and a shift in supply?

12) Write out the equation for the arc price elasticity of demand using symbols. Then write out the equation using the following numbers: the price increases from $8 to $10 and the quantity demanded falls from 3 units to 2 units. (Do not calculate the equation.)
Three Questions (no choice)

Long Answer Questions (20 points each)

Be certain to label all graphs. Write all explanations in complete sentences.

1) Draw a supply and demand graph for the market for oranges.

Illustrate and explain what happens with when a freeze destroys part of the crop.

2) Draw an increasing cost Production Possibilities Curve (PPC) for the U.S. with computers on the horizontal axis and textiles on the vertical axis.
a) What is the definition of a PPC

b) Choose a point on the PPC. What does this point represent?

c) Illustrate the opportunity cost of producing more computers.

d) Explain a point inside the PPC.

e) Explain a point outside the PPC.

f) Technological change reduces the cost of producing computers and textiles, illustrate and explain what happens in the graph.

g) Choose a new point that represents production and consumption after technological change.

h) Where does the U.S. produce and consume relative to before technological change.

i) Illustrate and explain the opportunity cost of producing more computers after technological change.

3) Define the price elasticity of demand. What does elastic, inelastic and unitary price elasticity of demand mean? For each of the three values of the price elasticity of demand explain what happens to quantity demanded and total revenue when the price of the product is increased? What about when the price of the product is decreased?

4) Using a supply and demand graph in the market for bread, illustrate and explain the effect of a price ceiling (Price set below equilibrium price).

Why would the government impose such a price ceiling?

How is the available bread distributed to consumers when there is a price ceilin