It;s not an actual essay, It\’s about answering questions.
Some of the questions\’ answers should be as a paragraph or two, but most of them are short brief answers.
Each question has to be answered independently and clearly.
Here are the questions:
A) Explain the nature of trade and benefits to people from trade. Discuss comparative advantage, specialization and gains from trade. Also, explain conditions where trade is not mutually beneficial.
B) What is efficiency and why is it important?
C) Explain why the profit maximizing production is found where the marginal cost of production is equal to the marginal revenue of that production.
D) Calculate GDP and Real GDP from the following information. Consumption=1,000. Private Investment=150. Government Spending=400. Exports=100. Imports=150. Social Security Payments=300. CPI=150.
E) Identify four functions of the Federal Reserve Board and explain how each of them is important.
F) In class you saw financial notes from the Confederate States of America. Was this money? Why and why not?
G) How does Income and wealth distribution impact GDP? Why do many economists express concern about the current income and wealth distribution in the United States?
H) Why does it matter that financial markets are regulated, competitive and liquid?
I) Why is a return to the gold standard a bad idea? If the goal is to remove the threat of inflation from Federal Reserve action what is an alternative approach that does not have the problems of the gold standard.
J) OIL: Assume the world price of oil in 2006 was $80/bbl. In 2006 a technological advancement lowered the variable cost of producing oil from shale formations to $55/bbl. What is the expected direction of change for oil production and price?
In 2015 the United States and its European allies negotiated an agreement with Iran which will allow Iran to begin exporting oil again. What effect does this have on the price and quantity of oil?
At what price do you expect to see quantity begin to fall?
In December 2015 the Saudi Oil Minister announced his intention to put the new production from 2006-15 out of business. At what price does this happen?
Finally, you are planning a driving trip across the country and back. Do you expect the price of gasoline to be cheaper this year or next year?