Econ Ch 2

Chapter 2 Homework Set 1. Indicate what types of resources each of the following is: a. Capital b. Land c. Entrepreneur d. Labor 2. If money GDP increased by 4 percent and the price level increases by 1 percent, what is the approximate impact on per capita real GDP? e. 4 3. Which of the following products or services would be counted in US GDP when produced? f. No g. Yes h. Yes i. No 4. In 2003, Microsoft lowered the price of its Xbox from $199 to $179 in the US. Does this price change indicate that the Xbox was becoming more or less scarce at the existing price level? What does this price change imply about the level of competition from companies like Sony and Nintendo? j. Less Scarce. More competition for the competitors. 5. If the population of some European countries is declining, does this imply a fertility rate greater than 2 or less than 2? How could immigration and emigration affect such changes in the population? k. Less than 2, immigration causes an increase in population for the US 6. In the following table, each column indicates the percentage of national income earned by 20 percent of the population, arranged in order from the poorest 20 percent to the richest. Which of the three countries has the greatest income inequality? l. Brazil 7. If a government imposes a larger income tax on the wealthy, will this lead to more or less income inequality? What impact would this tax be likely to have on overall economic growth? m. Less income inequality. Government would be able to take the tax from the wealthy and help economic growth. 8. My friend George is very concerned about air quality and the environment at present he drives a large SUV. If he and the large number of similar consumers chose to purchase only fuel-efficient vehicles such as hybrid cars, what would likely happen to the price of SUVs? What signal would this price change