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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
 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 CR_{4} 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 
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.