Assignments: 1. PRINT and READ the text packet - Chapter 1, Appendix, and Chapter 2 Available below

Transcription

1 Summer Assignment for AP Economics Welcome to AP Economics!! Read the following VERY carefully. All assignments will be due on the First Day of School!!! Assignments: 1. PRINT and READ the text packet - Chapter 1, Appendix, and Chapter 2 Available below 2. COMPLETE Supplementary Questions handout - Available below Important dates: 1. September 3 rd (First day of School) Supplementary questions are due 2. September 4 th and 5 th Review and Discuss concepts 3. September 8 th : Exam on Chapter 1, Appendix, and Chapter 2 Good Luck Look forward to meeting you all in September!!

2 Complete the READING - Chapter 1, Appendix 1, and Chapter 2 and then answer the questions below. Answers should be WRITTEN in the spaces provided below. 1. Below are six statements. Indicate whether each one pertains to microeconomics (MIC) or macroeconomics (MAC). (a) The GDP in the China is at one of the lowest levels in the last twenty years. (b) Facebook s profits will soar as they go public. (c) Demand is expected to fall in the PC industry as technologies flourish. (d) The inflation rate increased 5% in the second quarter of the year. (e) Exchange rates between the dollar and Euro have increased by 3 percent since last fall. (f) Microsoft plans to spend $600 million on R&D next year. 2. Below are six statements. Identify whether each is a positive or normative statement. (a) The inflation rate seems to have decreased as the US has relied more on outsourcing. (b) Government spending should be a drag on output over the next two years as tax breaks have been eliminated. (c) The Federal Reserve Bank has lowered the Fed Funds Rate to 0%. (d) The government should take action to break up the monopoly power of Microsoft. (e) Tax rates have increased by 4% since the year (f) The general price level rose about 5% last year.

3 3. The value of the vertical intercept is $5 and the slope is 10 in a linear equation for price and quantity demanded. If price is $105, what is the quantity demanded? State the linear equation and show how you found the answer. 4. The production possibilities table below shows the hypothetical relationship between the production of apples and copy machines in an economy. Combination Apples Copy Machines A 0 5 B 6 4 C 12 3 D 16 2 E 28 1 F 29 0 (a) What is the marginal opportunity cost of producing the third unit of copy machines? (b) What is the total opportunity cost of producing the third unit of copy machines? (c) What is the marginal opportunity cost of producing the fourth unit of copy machines? (d) What is the total opportunity cost of producing the fourth unit of copy machines? (e) Explain the problem with producing inside of the production possibilities curve.

4 5. Explain how each event affects production possibilities (shift outward, inward, or neither). (a) The population becomes more educated over time as the number of high school dropouts falls and the number of college graduates rises. (b) The unemployment rate increases from 4.3 to 7.5 percent of the labor force. (c) Businesses and government are unable to solve a major computer problem, thus reducing economic efficiency and national output. (d) Advances in telecommunications and new technology significantly contribute to economic growth over time. (e) The Congress and the President decide to allocate more resources to national defense. (f) A nation participates in increased international trade with other nations of the world. 6. Draw a hypothetical MC and MB curve. (a) Determine the points (on the graph) of over-allocation and under-allocation of goods and explain why this occurs.

5 7. Refer to the circular flow model to address the following. a) Is there a difference between the upper and lower money flows in the circular flow model? Explain. b) Why is this model referred to as the the circular flow. Please do NOT use the definition in the text your OWN words. 8. Draw a hypothetical production possibilities curve for wheat (place on vertical) and tractors (place on horizontal) that represents the law of increasing opportunity costs. a) Label a point A which is unattainable with current resources b) Label a point B which is attainable yet inefficient c) Explain the law of increasing opportunity cost: d) List two ways we can get to point B in an economy

6 9. What do economists mean when they state that investment is spending on goods for the future? 10. Research and define the difference between Monetary and Fiscal Policy. FIND ONE CURRENT EVENT that relates to either Monetary OR Fiscal Policy write headline below, discuss how it relates to the concept, and attach article with this assignment. Be prepared to discuss in class.

7 11. In YOUR OWN WORDS define the following: a) macroeconomics b) ceteris paribus c) positive or direct relationship d) independent variable e) economizing problem f) production possibilities g) marginal benefit h) factors of production i) opportunity cost j) allocative efficiency k) productive efficiency

8 This assignment will be collected on the FIRST day back in school BE SURE TO STAPLE AND COMPLETE ON YOUR OWN!!! Exam 1 on chapter 1, appendix, and chapter 2 will be during the first week back be ready and good luck. Mrs. Scrivanich