8. 20 points. Gary must choose between two options. The first

8. 20 points. Gary must choose between two options. The first option is spending $8 seeing a movie, resulting in 64 additional units of utility (compared to the status quo). The second option is spending $50 helping someone campaign for office.

A. Suppose if he helps the campaign, he gains 100 units of additional utility compared to the status quo. Based on this information which activity should he choose? Explain. In your answer be sure to use both words and numerical results to demonstrate your understanding of the terms and key concepts involved in consumer choice. 2-5 sentences.

B. How much additional utility (compared to the status quo) must Gary gain from helping with the campaign in order for him to choose that option over seeing the movie? Explain. In your answer be sure to demonstrate your understanding of the terms and key concepts involved in consumer choice. 2-5 sentences.
9. 10 points. Diminishing returns

NUMBER OF
WORKERS TOTAL
PRODUCT MARGINAL PRODUCT
OF LABOR AVERAGE PRODUCT
OF LABOR
0 0
1 80
2 180
3 290
4 390
5 420
6 400

A. Complete the table above.

B. Evaluate the following as true or false and explain, demonstrating you understand the relevant economic concept in the question:

Diminishing marginal returns sets in with worker number 6

Suppose the People’s Bank of China wishes to peg the rate of

Suppose the People’s Bank of China wishes to peg the rate of exchange of its currency, the Yuan, in terms of the U.S. dollar. In each of the following situations, should it add to or subtract from its dollar foreign exchange reserves? Why?

a. U.S. parents worrying about safety begin buying fewer Chinese-made toys for their children.

b. U.S. interest rates rise relative to the interest rates in China; therefore, the Chinese residents seek to purchase additional U.S. financial assets.

c. The Chinese furniture manufacturers produce high-quality early American furniture and successfully export large quantities of the furniture to the United States.

The FTC and the antitrust division—recent legal actions Go to

The FTC and the antitrust division—recent legal actions Go to the FTC Web site, www.ftc.gov, to find press releases by selecting News. Briefly summarize two antitrust (not false advertising) actions taken by the FTC over the past 12 months. Next, go to the Web site of the U.S. Department of Justice’s Antitrust Division,www.usdoj.gov/atr/index.html, and look under Recent Antitrust Case Filings. Briefly summarize two antitrust -actions taken by the Antitrust Division during the past 12 months.

Three years ago, you purchased a bond for $974.69. The bond had

Three years ago, you purchased a bond for $974.69. The bond had three years to maturity, a coupon rate of 8% paid annually, and a face value of $1,000. Each year you reinvested all coupon interest at the prevailing reinvestment rate shown in the table below. Today is the bond’s maturity date. What is your realized compound yield on the bond?