Test 2 results and midterm grades

The descriptive statistics from Test #2:

average = 29.85 out of 40 (74.62%)
median = 30.5 (76.25%)
mode = 32 (80%)
stdev = 6.25 (15.63%) (the standard deviation is rather large--10% is the target).

The distribution of results indicate a "fat tail" in the upper range (many high scores--38, 39) but a "long thin tail" in the lower range (a wide range of low scores, but not necessarily a high frequency-- just that some who did bad did very bad).

Use the following grade scale as a guide for evaluating your performance (based on raw scores out of 40 points):

A: 35.5+
B: 30 - 35.5
C: 24 - 29.5
D: 18.5 - 23.5
F: 18 and below

Midterm grades:

I am required to turn in midterm grades for those who are performing at the D and F level. The red number on your score sheet is the weighted average of total points earned up to the mid point of the semester (does not include HW #7). There are a total of 46 possible points so far.

Convert your points (in red) to a percent by

(your points)
-------------- x 100 = percent score at midterm
46 points

The overall class average is 77.19% with a median value of 79.21%.

Use the grade scale below to evaluate your midterm score:

A: 87.5% +
B: 77.0% - 87.49%
C: 67% - 76.99%
D: 50% - 66.99%
F: below 50%

Instructor's comment: It appears that many people in the class are doing well. The number of people in the A/B range is greater than the number of people in the C/D/F range.

To those who are doing well: keep up the good work.

To those who are struggling: take measures to improve your performance. You should come to class with regularity. Try to do the homework and not just hope you can come into class and complete it by writing down what we go over. You're not likely truly learning anything. You're just getting points (in an academically dishonest manner, I might add). The truth is revealed by your performance on the test. Moreover, this is NOT a class where you study by reviewing your notes for an hour or so before the test. You should spend several hours studying. Yes, several hours. This includes working through the sample multiple choice problems. This includes going over your past homeworks. This includes reading the text. You just can't slack your way through economics and expect an A or B. For most of us those grades are earned by having an interest in the material and spending time learning the material.

If you think you are spending a lot of time studying but your performance is not as expected, you should discuss this with the instructor. You will be advised on measures you can take to improve your study skills.

Good luck with the remainder of the course.

Answer Key to Study Questions for Test #2

Here is the key to the sample test problems. There are a few problems that are probably inappropriate in that they cover material we did not cover in these chapters. Also, since these problems were from old tests, there are a few duplicates. Moreover, since I'm using a different text this year, some of the terminology might be different (physical capital is the same as capital).

1-A, 2-C, 3-D, 4-D, 5-B, 6-A, 7-D,
8-A, 9-A [originally reported as D, thanks Yao], 10-B, 11-D, 12-A, 13-B, 14-B,
15-A, 16-B, 17-C, 18-B, 19-B, 20-C*, 21-C*,
22-B, 23-D, 24-A, 25-A, 26-D**, 27-A,
28-C [originally reported as A--thanks Mr. Gomez for the correction], 29-A***, 30-B***,
31-D [originally reported as A--thanks YSlacrosse], 32-D, 33-D, 34-D, 35-C, 36-C, 37-A,
38-B, 39-C, 40-A, 41-A, 42-B, 43-D, 44-A,
45-B, 46-A, 47-D, 48-C, 49-C,
50-D, 51-C, 52-A, 53-B, 54-D

Some comments:

* Problems 20 and 21 deal with price indexes. This comes in a later chapter which we haven't done yet. However, it is very similar to the construction of the GDP price index (GDP deflator), but what you are given are "market baskets of goods". But the GDP is like a market basket of goods. So to calculate a price index for a year you take the ratio to the base year. So given the info in these two problems, you calculate the PI for 2005 as (160/130) x 100 = 123.1, for 2004 it is (140/130) x 100 = 107.7. So for the inflation for 2005 you calculate the % change from the previous period, so inflation = [(123.1 - 107.7) / 107.7 ] = 14.2%

I will not have you construct a price index except maybe finding the GDP price index (deflator) given nominal and real GDP.

I hope you aren't confused. Just ignore these two problems if you want.

**I really don't expect you to know what GDP was in 2005, but updating it to 2006, you should be able to guess it to be about $13.2 trillion.

***Yes, this is an unorthodox circular flow diagram. This was a leftover from the previous text I used. However, you don't really need the diagram to answer this. From the equation

GDP = C + I + G + (X - M), if G increases, then GDP increases (29-A). If M increases, GDP decreases (30-B).

I will make every attempt to keep the jargon familiar.

Good luck.

Comments on Homework 7

You are given the diagram for a "productivity" function. It shows the relationship between "capital per worker" (K/L) and worker productivity (Y/L). This was an extension of the "production function" that shows the relationship between labor (L) and output (Y). In class we also drew a production function showing the relationship between capital (K) and (Y). We could also expect a similar one if we looked at "human capital" (H) and output (Y).

Note the shape. It is a curve that slopes up but gets flatter. This shows there are diminishing returns on the margin. This means that not only is there diminishing returns to labor and diminishing returns to capital, but there is also diminishing returns to capital-per-worker.

So in the diagram as drawn capital can vary, labor can vary, and then output per worker can vary.

As capital increases, K/L increases, you move farther out on the x-axis, and output per worker (productivity) increases.

As labor increases, K/L decreases, you move in on the x-axis, and output per worker (productivity) decreases.

So part B basically asks: "so if technology is fixed (that is the function doesn't change) and human capital is fixed, how can a country like Albernia move from point A to point B?" (note how productivity at B is roughly double the value at A). The answer would be for Albernia to have a K/L comparable to Brittania's. So this would require... (see the two statements above regarding changes in K/L to finish your answer).

Part C then says, suppose that technology or human capital (H) aren't fixed. Then how could these countries move to higher productivity? Well, then maybe if H and tech are not fixed, then let's increase those. Let's educate our workers better, lets make use of better technology. Both of these will shift the productivity function. Determine how it will shift, then draw it.

In your understanding, keep in mind: output per worker is the same as income per worker. The increased capital per worker increases worker productivity. They can produce more. This means they have higher incomes.

The key implication for economic growth and development: To boost the well-being of your economy and the people in your economy, you not only need to produce more stuff but you need each worker to produce more stuff. The more productive the worker, the higher their incomes and the more stuff they get to enjoy.

Test #2 Date Change!!

Announcement: Test #2 is set for Thursday, October 18, 2007. This is changed from Tuesday, October 16.