Answers to Study Problems for Test #3

Here is the answer key to the practice problems.

1-C, 2-A, 3-A, 4-B, 5-D, 6-A, 7-B,
8-A, 9-D, 10-A, 11-C, 12-D, 13-C, 14-D, 15-D,
16-D, 17-D, 18-B, 19-D, 20-C, 21-D, 22-C,
23-C, 24-A, 25-D, 26-A,
27-D, 28-A, 29-D, 30-C, 31-D, 32-A, 33-A, 34-D,
35-D, 36-C, 37-D, 38-B, 39-A, 40-C, 41-B, 42-C.

Comments: The practice test questions come from old tests of mine. Some of the terminology is different from class or Krugman and Wells since I used to use a different text. I hope you don't wind up confused. If you need clarification, just ask.

Also, a few problems refer to the "money supply". We haven't talked about that yet so don't let questions employing the use of money supply throw you off.

Problem 3: As mentioned in class, productivity can be considered output per worker or output per worker hour. This problem has you calculate all hours worked by the 5 workers to calculate output per worker-hour. Again, you ought to have figured that out from the context.

Problem 11: Don't worry about that "A" in the production function. It can be used in explaining production functions. I've dropped that notation as KW do not use it either. However, the presence of that "A" should not hinder you from getting the correct answer.

Problem 39: In this problem, AD shifts as well as AS-short run. As with regular markets, when both demand and supply shift, some variable, in this case the price level, may go up or down or stay the same (or indeterminate).

I had a busy day and I put this key together rather quickly. If you think there are any errors please contact me (jjulian@iup.edu) or send an instant message to CinciDood (AIM).

Good luck.

JJ