Economics Homework Help

Consider the following activities and answer the accompanying questions.

·      Travis

manufactures custom craftsman furniture. Last year, he produced and sold $450,000 in final furniture products.

·      Travis manufactures custom craftsman furniture. Last year, he produced $50,000 in final products that went unsold.  He added the products to his inventory and plans to sell them next year.

·      Travis manufactures custom craftsman furniture. Last year, he purchased $175,000 in repurposed barn wood that he used to produce a custom line of cabinets.

·      Travis manufactures custom craftsman furniture. Last year, he used a brokerage service to purchase a used delivery truck for $25,000.  He paid the brokerage $750 for the service.

·      Last year, Travis sold some stock holdings from his retirement account for $400,000.  With the proceeds, he purchased a new construction home for $325,000 and used the remainder purchases stock shares in a new technology company.

1.    What types of activities are generally excluded from GDP calculations?

a.    Home production 

b.    Purchase of used goods

c.    Asset transfers

d.    Illegal Activities

e.    All of the above

2.    How much did the above activities contribute to GDP?

a.    $825,750

b.    $775,750

c.    $500,750

d.    $825,000

Suppose Travis sells his woodshop, and begins looking for a job in industrial design.

3.    As Travis transitions away from manufacturing, he begins to circulate resumes, attend career fairs, and meets with several prospective employers.  The household survey would classify Cody as

a.    Employed

b.    Unemployed 

c.    Not in the labor force

d.    Underemployed

4.    Travis accepts a job with a firm in Chicago doing industrial design in furniture applications.  The household survey would classify Travis as

a.    Employed

b.    Unemployed

c.    Not in the labor force

d.    Marginally unemployed

5.    Travis loses his job when the economy moves into recession.  He reaches out to contacts in the industry, secures a couple of interviews, but is unable to land a job.  Travis would now be classified as

a.    Employed

b.    Structurally unemployed

c.    Cyclically unemployed

d.    Frictionally unemployed

e.    Marginally attached to the labor force

6.    After searching for a job for some time without any luck Travis quits actively looking.  He would still like to work and would take a job if offered, but isn’t actively looking.

a.    Employed

b.    Unemployed

c.    Not in the labor force

d.    Marginally attached to the labor force