HONOR CODE Agreement of terms for participations in Economics 101
By registering in an online course, you agree to:
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Complete all papers assessments, and other assignments with your own work and only your own
work.
You will not submit the work of any other person.
You will not post answers to problems that are being used to assess student performance
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You will not copy or share assignments with any web sites.
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When you hand in written work for a grade, it must be your own work and
not copied from another student or from a book, magazine, Internet, etc.
When you take an online quiz, you may use notes but you may not copy
from other students.
Academic dishonesty will lead to a failing grade for the course
and possibly dismissal from school. Therefore, if you don't
understand these rules, please discuss them with me before you
hand in written work. Copying assignments from web sites such as
Chegg.Com, AI, Chat GPT, Study.com, Course Hero.com and
Khan.com or another student is Cheating and will result in an F grade
for the Course and possible dismissal from school. Please read and
sign the Honor Code.
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This test is Mandatory for a passing grade in this course. It is
worth 50 points.
You will acknowledge any and all external sources used in your work;
Test 1.
PepsiCo Sales and Earnings Rise as
Shoppers Keep Spending on Snacks
The food and beverage giant raised its revenue
outlook for the year
Consumers continued to shrug off price increases and spend on Doritos, Cheetos and other
snacks, prompting the food and beverage giant to raise its revenue outlook for the year.
Makers of packaged foods have continued to charge more for pantry staples like potato
chips and ketchup even as the cost of meat and produce has dropped. Consumers’
willingness to pay up for some of those products has fueled growth at companies like
PepsiCo and Kellogg.
Hugh Johnston, PepsiCo’s finance chief, said that while consumers are pulling back on
bigger-ticket purchases like cars, they aren’t skimping on snacks.
“They want that affordable luxury because they still have some money in their pockets, and
we very much represent that,” he said. “I’m going to fill up my car with gas, and I’m going to
treat myself to a Mountain Dew and a bag of Lays.”
.
Questions:
1.
Peggy pays $3.00 for a package of Doritos Nacho
Cheese Chips for which she would have paid as much
as $5.00. (I) How much consumer surplus did Peggy
receive from her purchase? (II) Stewart paid $5.00 for
a package of Cheetos Crunchy Cheese Puff Chips. If
Stewart received more consumer surplus from his
purchase than Peggy received from hers. How much
must Stewart have been willing to pay?( give a
number) ( 6 points)
2.
From the article: “PepsiCo reported strong growth in
sales and profit as consumers continued to shrug off
price increases and spend on Doritos, Cheetos and
other snacks…” Assume that higher prices caused
the number of packages of Doritos and Cheetos to
decrease. Explain using Economics concepts, how
the revenue from sales of Doritos and Cheetos could
have increased. (6 points)
Richard and his daughter Alison finally have something in common. They both just quit their
jobs. Economists say changing demographics like ageing and retiring workers are a factor
behind the supply shortages as well as worker’s demands for better pay and flexible working
arrangements. The “quit rates” are historically high.
3.Alison is 35 and Richard is 73.
Richard is a member of ___________________________(name of population group).
(3 points)
Richard’s group was born between ___________(year) and ____________ (year) (3
points)
4. Alison is a member of ___________________________(name of population group).(3
points)
Alison’s s group was born between ___________(year) and ____________ (year) (3
points)
5. Oliver took a job at Walmart. He was willing and able to work 40 hours. They are only
using him for 20 hours. The economic term we use to label people or resources not
used to full capacity is ____________________.
(5 points).
6. WASHINGTON — The Biden administration has revised the nutrition standards of
the food stamp program and prompted the largest permanent increase to benefits in the
program’s history, a move that will give poor people more power to fill their grocery
carts but add billions of dollars to the cost of a program that feeds one in eight
Americans.
Under rules to be announced on Monday and put in place in October, average benefits
will rise more than 25 percent from prepandemic levels. All 42 million people in the
program will receive additional aid. The move does not require congressional approval,
and unlike the large pandemic-era expansions, which are starting to expire, the changes
are intended to last.
For at least a decade, critics of the benefits have said they were too low to provide an
adequate diet. More than three-quarters of households exhaust their benefits in the first
half of the monthly cycle, and researchers have linked subsequent food shortages to
problems as diverse as increased hospital admissions, more school suspensions and lower
SAT scores.
Under the new rules, average monthly benefits, $121 per person before the pandemic,
will rise by $36. Although the increase may seem modest to middle-class families,
proponents say it will reduce hunger, improve nutrition and lead to better health.
A. Would Adam Smith consider food stamps a legitimate role of government? (2 points)
B. According to Adam Smith what are the 3 legitimate roles of government? (6 points)
7. What are the 4 returns to the factors of production. (8 points)
The cost of employer-sponsored health care benefits are expected to approach $16,800
per employee next year. Big employers project that their total cost of providing medical
and pharmacy benefits will rise 6 percent for the sixth consecutive year. The total cost
of health care, is estimated to average $17,800 per employee in 2022, up from $7,099
last year. Large employers will cover roughly 70 percent of those costs.
8. Read the above. For Employers, what is the “OPPORTUNTY COST “of health
care? (not the price.) (5 points)