NCWC
Eco211 Exam I

Do not copy answers verbatim from the book. Any examples used that can be found in the text book or my lectures will be given ZERO credit. Do NOT use red ink. Write on only one side of the paper. Make sure your name is on every page. Staple all pages together. Failure to comply with these instructions will result in forfeiture of all points that had been earned.

Part One: Answer all 6 questions (12 points each for a total of 60) * Identify each of the follow as either Normative (N) or Positive (P). Defend your answer. * Hurricane Ophelia will cause flooding in the North Carolina Mountains. * Home mortgage rates should fall so more families can buy homes. * The US has the Highest employment rate of the big eight countries. * The next US president will be a Yale graduate. * It was too hot today.

* There are four economic resources. What are they and give an example of how a change in each impact Gross Domestic Product.

* Explain why each of the following would or would not be included in this year's GPD.. * Jack and Jill purchase a 100 year old farm house. * Al Coholic purchases a fifth of Grey Goose. * Poly Ester, owner of “New Again” a retail store, purchases some new fabric to reupholster an old sofa. * Dick Tator purchases new tanks for his army. * Old Mother Hubbard buys new bones for her dogs with funds given to her by the state government. * Hansel and Gretel purchase cloths for the new school year at the local thrift shop.

* Defend the following statement: “There are no needs in society, just wants”. You can not disagree with this statement.

* There are Three Fundamental Questions an economy must answer. * What are they? * Explain in detail how the economic answers one of them

* List three (3) shortcomings of GDP as a measure of how well or poorly the economy is performing, and a brief explanation of why these shortcomings impact the health of the economy

Part two : Answer any 3 questions (9 points each for a total of 60)

* There are six determinants of Demand. What are they and give an example of how each will increase demand

* The government announces the minimum wage will increase to $15.00/hour starting October 1st 2012. * What will happen to the demand for labor? * What will happen to the supply of labor? * What will happen to the unemployment rate?

* There are six determinants of Supply. What are they and give an example of how each will decrease supply.

* List the components of the Expenditures Approach of determining GDP. Explain the impact on the economy when each component decreases

* Why must the price effect be removed when determining GDP growth?

Part 3 : Answer this questions (1 point)

1. A hobo Joe discovers a way to make cigars from discarded cigar butts. He uses 5 butts to make one cigar. If Joe has 25 butts how many cigars can he make? Explain your answer.

Extra Credit: 1. Answer an additional part two question (5 points) 2. How many months have 30 days? (1 point) 3. What come first in the day 12 am or 11 am?