CIA4U Grade 12 Economics Final Exam Review Questions

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EXAM REVIEW QUESTIONS

 

1. Future value if $10 000 with 5% per annual over 5 years?

 

 

 

 

 

2. Current interest rate = 7%, PV of 3 annual payments of 1000 and lump sum of 100 000 at the end?

 

 

 

 

 

3. Par Value = 1000, Coupon rate= 9%, Price of Bond= 935. Maturity Date= 2015. What is the YTM?

 

 

4. BCE is selling at $45, you buy 45 shares. You sell at $50. What is your profit?

 

Case One ( no margin) Case Two (with 50% margin)
 

 

 

 

 

 

 

 

 

 

5. Short 10 000 shares of YEL @ $1.20. Three weeks later, it is trading at $0.60. Calculate loss/profit.

 

 

 

 

 

 

 

 

6. a) Purchase a call option on BCE: strike price is $38, option has expiry date in six months, premium is $4 a share. 3 months prior you decide to use it and the stock has risen to $45. Calculate loss/profit

 

 

 

 

 

 

 

b) Assume you decided to sell the contract before it was over, what would it be worth?

 

 

 

 

c) What is the price drops to $27, what would you lose?

 

 

7. Complete the following table and draw PPF

 

Option Tomatoes (vines) Grapes (vines) Oppurtunity Cost of Tomatoes (in vines of grapes)
A 0 25 —————————–
B 1 24
C 2 21
D 3 16
E 4 9
F 5 0

 

 

 

 

 

 

 

 

 

 

Opportunity cost of producing the third tomato:________

Opportunity cost of producing 5 vines of tomatoes:____________

 

Unit two

  1. Given the demand and supply schedule for panda hats (in UCM), answer the following questions

 

Price Qd Qs Surplus/Shortage?
12 4 13
11 5 11
10 6 9
9 7 7
8 8 5

 

 

Draw the supply and demand curves. Indicate Equilibrium price and quantity.

 

 

 

 

 

Suppose penguin hats come into style, the demand for panda hats goes down by 1 at each price level. What happens to the equilibrium price? Demonstrate what happens on the graph and in words.

 

 

 

 

UNIT THREE

If the price if A, B and C are $2, $3, $1 respectively and the consumer has $26 to spend. What combination would maximize utility?

 

Unit of product MU (A) MU (B) MU (C)
1 18 39 12
2 16 36 10
3 14 33 9
4 12 30 8
5 10 27 7
6 8 24 5
7 6 21 3

 

 

 

 

 

 

 

 

 

 

2. This is the demand schedule for panda hats, calculate the elasticities between each point

 

Point Price Demand Elasticity
A 14 5000
B 12 700
C 10 10000
D 8 15000
E 6 24000
F 4 35000

 

 

 

 

 

 

 

 

 

 

 

3.

 

Price of Sprite per case Demand for Coke Demand for Sprite
10 100 000 20 000
8 95 000 30 000
6 90 000 40 000
4 60 000 50 000
2 20 000 60 000

 

Figure out cross price elasticity of demand for Coke with respect to the price of sprite as the price of Sprite moves from $8 to $6 and how are they related?

 

 

 

 

 

 

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UNIT FOUR

Calculate the CR4 and HI for these following companies in the search engine industry and determine whether this industry is a monopoly, oligopoly, monopolistic competition, or perfect competition.

 

Search Engine Market Share
Google 52%
Yahoo 21%
MSN 11%
AskJeeves 8%
AOL 5%
45 other firms at 1% each

 

 

 

 

 

 

 

2. In a perfectly competitive market, determine: price, MC, the firm’s profit max level of output and the firm’s profit at this max.

 

Output TR TC MC Profit
0 14
1 14 30
2 36
3 44
4 56
5 72
6 92
7 116

 

Price:________

Profit Max:_________

Profit at Profit Max:_______

 

4. The following table shows the number of really garlicy shawarma wraps that the SH cafeteria can produce by employing various numbers of shawarma makers. Assuming that the price per shawarma is $3, and the wage a worker is $30/day, how many workers should they employ?

 

# of Shawarma Makers # of Shawarmas/day MP MRPL
1 80
2 150
3 205
4 240
5 250
6 255

 

 

UNIT FIVE

Calculate the Panda Price Index for each year using 2011 as a base. Then calculate the percentage change between 2010 and 2012

 

Item 2010 2011 2012
Food 500 600 750
Shelter 1200 1350 1500
Entertainment 500 550 600
Total

 

 

 

 

 

 

 

 

 

 

 

2. Complete the table

 

Year Real GDP Nominal GDP GDP Deflator (2008=base year)
2006 600.5 55.5
2007 328.2 32.58
2008 690.1
2009 716.1 724.9

 

 

3. a) Given actual GDP = 2000, unemployment rate= 10%, frictional unemployment is 2.2%, seasonal unemployment is 1.1% and structural unemployment is 2.2%, calculate GDP gap

 

 

 

 

 

b) Using this information, fill in this table

 

GDP Gap
Personal Income 600
Initial Tax Rate 25%
New tax Rate 15%
Change in Investment Spending 100
MPC 0.8

 

c) Calculate the change in GDP that would result from the tax and spending changes.