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Economics

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1. What has been the role of increasing complexity and rapid change in the development of management and organization theory?

2.Consider two Canadian workers: one has 13 years of education and an annual salary of $55,971 and the other has 17 years of education and an annual salary of $80,565. Consider a line passing through these two observations. If y is the annual salary measured in 1,000s of Canadian dollars and x is years of education, what is the value of a in y = a + b*x? (Record your answer accurate to at least the nearest second decimal place with standard rounding. Make sure to notice the units of measurement of y and x.)

3.Y = 25N − N2 2 (1) Production function

Nd = 100 − W P (2) Labour demand

Ns = 0.25W P (3) Labour supply

Nd = Ns = N (4) Labour market equilibrium

Goods market: Z = C + I + G (5) Planned aggregate expenditure

C = 40 + 0.5YD (6) Consumption function

I = 5 + 0.5Y − 50i (7) Planned investment

G = 50 (8) Government expenditure

YD = Y − T (9) Disposable income

T = 25 + 0.5Y (10) Tax function

Y = Z (11) Equilibrium Condition

Money market: L = 25 + 0.25Y − 100i (12) Money demand

M/P = 100/P (13) Money supply

L = M P (14) Money market equilibrium

3. Suppose that the interest rate is exogenously fixed at i = 0.025. In this case, what is the value of the multipier and the equilibrium value of output Y ∗ according to the goods market? (2 marks)

4. Suppose, alternatively, that the interest rate is an endogenous variable, but the price level is fixed exogenously at P = 1. In this case, what are the equilibrium values of Y ∗ and i ∗ according to the goods and money markets? (2 marks)

4.In the market for a particular product, the price elasticity of supply is + , and the price elasticity of demand is At equilibrium, price is 25 (in dollars) and quantity consumed is 35 7 (in thousands). (a) Assuming supply and demand are linear, reconstruct and draw the supply and demand curves. Label the intercepts. (b) To help consumers and produces, the government subsidizes the product by $2 per unit. What are the prices paid by buyers Pg and prices received by seller Ps after the subsidy? What is the new equilibrium quantity? illustrate them on the same graph. (c) How big is the change in consumer surplus, producer surplus, government expenditure, and deadweight loss?