<p>How much out of the 28 points you think you got? I cant believe I got the marginal utility one wrong >.<...</p>
<p>What you say for:
(c) Assume that consumers always buy 20 units of good R each month regardless of its price.
(i) What is the numerical value of the price elasticity of demand for good R? 0?
(ii) If the government implements a per-unit tax of $2 on good R, how much of the tax will the seller pay? The majority ?</p>
<p>That one was easy.</p>
<p>i) 0
The price elasticity is 0. <a href="Change%20in%20demand">u</a>/(change in price). There is no change in demand, no matter what the price is. 0 divided by whatever change in price is always 0.</p>
<p>ii) $0
It's $0. The demand curve is a vertical line. If the supply curve moves over to cover the $2 tax (the seller charges $2 more for his item), the demand curve change in price is $2 also, and the seller pays none of it. The buyer pays all of it.</p>
<p>aww, I never read that when i self-studied...dam. I think I failed the easy ones >.<</p>
<p>Yeah, I self-studied too. 1 day on micro, 1 day on macro, 1 day review the day before. = )</p>
<p>Do you think if I get 20/28 on FRQ, and about 51/60 on MC I might get a 5?</p>
<p>I think it was 71-90 for a 5, so you're right on the border.</p>
<p>ugh at least 4 guaranteed... cant believe i missed the easiest ones >.<!!! The last one was quite straight forward and easy. The first one was easy too, just prolly got something wrong on the long run subsidy. Got I want my grade so bad!!!</p>
<p>The tests are online now.</p>
<p>For the first micro free-response question, are these the correct answers?</p>
<p>Short-run: quantity unaffected (annual lump-sum subsidy only changes fixed cost, not marginal cost -> MR = MC at same point), profits increase, number of firms doesn't change</p>
<p>Long-run: more firms would enter the market, same price, same output</p>
<p>I messed up the number of firms in the short-run and long-run by forgetting that firms can't enter the market in the short-run... :/</p>
<p>This what I put for #1 Micro:
(b)
(i)Short-run quantity - increases (subsidy is meant to increase)
(ii)Profits increase (MR increases, and ATC shifts down)
(iii)Number of firms increase (since everyone wants to make a profit)</p>
<p>(c)
(i) Number of industries decrease (since lot of supply = price goes down...firms shutdown.) Also in the long-run its always at equilbrium, so by firms decreasing it goes back to equilibrium.
(ii) Price decrease since in the short-run output would increase, thus decreasing price. (Also on the industry curve graph, demand would shift downward)
(iii) Industry output would decrease as well because the number of firms would decrease, thus decreasing industry output.</p>
<p>The only ones I was confused on was the number of firms in the industry in short-run/long-run.</p>
<p>O and btw here are the links:
Macro - <a href="http://apcentral.collegeboard.com/apc/public/repository/ap08_macro_econ_frq.pdf%5B/url%5D">http://apcentral.collegeboard.com/apc/public/repository/ap08_macro_econ_frq.pdf</a>
Micro - <a href="http://apcentral.collegeboard.com/apc/public/repository/ap08_micro_econ_frq.pdf%5B/url%5D">http://apcentral.collegeboard.com/apc/public/repository/ap08_micro_econ_frq.pdf</a></p>
<p>Asc3nd i put exactly what you put, except for the short-run the subsidy is a lump-subsidy not a unit subsidy. That difference is why quantity stays the same</p>
<p>Hmm, if firms do enter in the short-run to compete for profits and then leave the market, wouldn't the lump-sum subsidy have no effect on the number of firms in the industry? Number of firms before the subsidy = number of firms after a really long time</p>
<p>I hope I got enough multiple choice questions right to make up for all my mistakes on the first free response question.</p>
<p>Mike you had most of it correct, except the short-run/long-run industry thing.
I was also in your position and remembered reading industries dont change in the short-run, bu then I reasoned that they would have to increase in the long-run which wouldn't make sense, cause I knew for sure that in the long-run the industry is at equilibrium. </p>
<p>Btw what is a lump-subsidy? and a unit subsidy?</p>
<p>Ok so I think I did worst on macro then I did on micro.
For #1 on macro:
(b) Impact of recession on fed budget? - I put it decreases/restricts the budget. (since deficit spending would increase)
(d) Real interest rates go up ??
(e) Growth decreases (since high int. rates would decrease investment)</p>
<h1>2 on macro:</h1>
<p>(a)
(i) Chocolate - Current good
(ii) Comp - Current good?? (I put capital, but i'm pretty sure i'm wrong)
(b) Increase in income would decrease current budget (we buy more from foreigns than they do from us, basically our imports increase)
(c) Dollar depreciates (b/c we our spending in India, so we our demaning the rupee in exchange for dollars)</p>
<p>Which ones did I get wrong? lol</p>
<p>I'm really not sure. On the test, I put increase for short-run and unchanged for long-run. At least the other questions were very easy.</p>
<p>A per-unit subsidy is money that is given for every additional unit of output that a firm produces. A lump-sum subsidy is given regardless of the quantity produced.</p>
<p>I got the same answers as you for macro. I put capital good as well since it talked about a manufacterer buying the computer.</p>
<p>i'm not solid on my answers but here they are...
I put for macro:</p>
<ol>
<li><p>a) b is farther along the x axis than a
b) budget probably turns to negative w/ automatic stabilizers coming from less GDP/spending/aggregate demand
c) i) $100
ii) ppl would save some of the extra money that they have because of decreased taxes. the tax cut would therefore need to be larger than govt spending
d) crowding out effect/real int rate rises with more demand
e) growth slows b/c of less investment with higher int rates</p></li>
<li><p>(this question was really unexpected and i didn't study for parts a & b)
a) i) current---its consumption
ii) capital---computer is machinery and therefore represents transfer of capital (i hope)
b) curr acct balance decreases/goes neg b/c of more imports since ppl have more disposable income (i hope)
c) US dollar will depreciate. on the dollars graph, supply curve will shift to the right b/c more us dollars are needed in the intl market to be converted to rupees.</p></li>
<li><p>a) 1 bicycle in artland costs 2 hats
b) rayland will import bicycles b/c artland has lower opportunity cost (2 hats::1 bicycle in artland to 4 hats::1 bicycle in rayland)
c) i) Yes
ii) No
d) no because productivity increase of both products is proportionately equal & does not affect opportunity cost/comparative advantage</p></li>
</ol>
<p>Nice i pretty much what you got.
I was just wondering how do you calculate the frq score (what do you mutliply by?)
Let's say the first question (on micro) is 12 pts, and #2 and #3 are worth 6 pts each. What would a 22/24 translate to?
And on macro (same scale) what would a 23/24 translate to on a 30-pt. scale?</p>
<p>No. The capital account represents holdings in foreign assets (like currency). For example, our government's holdings in rupees are in the capital account. The capital account has nothing to do with actual "capital" the resource. (I got that one wrong as well). That one was really unexpected, I did all the old FRQs that were on college board and they've never asked about balance of payments before.</p>
<p>So yeah I pretty much put exactly the same things as you. Except I freakin said that the current account increases (DUH wasn't even thinking of net exports at the time) but since I said a rise in income will increase demand for foreign products i.e. imports, hopefully I get some points for that. I think I put the same things for #1.</p>
<p>can someone shoot me
i thought it said how much will the buyer pay..shoot me someone</p>
<p>and what were the answers for the 3rd one.can someone just say the answers for all 3</p>
<p>^</p>
<p>I thought it said how much will the buyer pay too. I don't know how I could have read it wrong though...</p>
<p>Hopefully, they printed the page wrong somehow.</p>
<p>@tlesc01 - From what I know, I think you were originally correct. According to Investopedia, the capital account relates to "dealings including debt forgiveness, the transfer of goods and financial assets by migrants leaving or entering a country, the transfer of ownership on fixed assets, the transfer of funds received to the sale or acquisition of fixed assets, gift and inheritance taxes, death levies, patents, copyrights, royalties and uninsured damage to fixed assets."</p>
<p>Thus, the capital account includes both non-produced (such as financial assets, which you correctly listed above) and fixed assets. A fixed asset is "a long-term tangible piece of property that a firm owns and uses in the production of its income" - these include plants, factories, and equipment/machinery. Under this category (and thus under the capital account) is computer equipment purchased by a firm.</p>
<p>You may be thinking about the IMF definition of the capital account, which is referred to therein as the financial account.</p>
<p>EDIT: Moreover, the only instance the current account would include any element relating to investments is in the following case -- INCOME derived from investment is recorded in the current account, the actual investments in the capital account)</p>