ECON 1250 Assignment 1
Due Date: June 07, 2018. Please submit hard copies and electronic copies!Proposals have been made to increase government regulation of firms providing child-care services by, for instance, setting education requirements for child-care workers. Suppose that these regulations increase the quality of child-care and cause the demand for child-care services to increase. At the same time, assume that complying with the new government regulations increases the costs of firms providing child-care services. Draw a demand and supply graph to illustrate the effects of these changes in the market for child-care services. Briefly explain whether the total quantity of child-care services purchased will increase or decrease as a result of regulation.
Below are some data for a simple economy that produces only two goods: milk and honey.
Year Price of milk Quantity of milk (liters) Price of honey Quantity of honey (litres)
2013 $1 100 $2 50
2014 1 200 2 100
2015 2 200 4 100
Compute nominal GDP, real GDP and the GDP deflator for each year, using 2013 as a base year.
Compute the inflation rate in 2014 and 2015 from the preceding year. Interpret the results.
Did economic well-being rise more in 2014 or 2015? Explain.
The data collected in the Labor Force Survey in February 2012 shows that the unemployment rate in Canada was 7.7%, the labor force participation rate was 65.6% and employment was 16, 877,000. Calculate:
The number of labor force
The number of unemployed population
Show the steps you follow in answering the question.
Please write a short note using the data and your results.
Suppose that people consume only three goods, as shown in the table below:
Tennis Balls Tennis Racquets Gatorade
2014 price $2 $40 $1
2014 quantity 100 10 200
2015 price $2 $60 $2
2015 quantity 100 10 200
If the base year is 2014, what is the CPI in both years? What is the inflation rate in 2015? Show your work.