College of Business and Economics

Department of Economics

ECONOMICS GROUP ASSIGNMENT FOR FRESHMAN STUDENTS

General Instructions
 The assignment should be clear and precise to get full marks.
 The assignment will be evaluated from 10 % of your total grade.
 Duplication of assignment will leads to a serious penalty (will be evaluated as null).
 Maximum number of student per group should be 10 students.
 If there is double registration for one student the marks of the group will be zero.
 Submission date 25 July, 2022.

Answer all of the following Questions Accordingly

1. What types of unemployment are the following workers experiencing. (0.5 Points Each)
A. A sales person in a shoes store loses her job when a new shoes store opens nearby.
B. As automated teller machines are installed by banks, bank tellers lose their
employment.
C. Lack of consumer confidence and growing pessimism among Ethiopian business
leaders leads to wide scale layoffs in the natural resources and manufacturing
industries.
D. A person who graduated in agriculture field finds a job in Addis Abeba.
2. Use the following information to answer the question. There are three firms in an
economy: X, Y, and Z. Firm X buys $200 worth of goods from Y, and $300 worth of
goods from firm Z, and produces 250 units of output at $4 per unit. Firm Y buys $150
worth of goods from firm X, and $250 worth of goods from firm Z, and produces 300
units of output at $6 per unit. Firm Z buys $75 worth of goods from firm X, and $50
worth of goods from firm Y, and produces 500 units at $2 per unit.

Given this information above, what is the economy’s GDP? Hint: remember that part of
each firm’s production is used by one of the other firms as a production input (an
intermediate product). (2 Points)

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3. Given the following short run production function schedule of a firm where we have only
one variable input, (L), and one fixed input, land. Answer the following questions (1
points Each)

Labor (L) 0 1 2 3 4 5 6 7 8
Total product(TP) 0 3 7 12 16 18 19 19 16

A. Identify the three stages of production in table form and graphically?

B. When the law of diminishing marginal returns does starts to operate?
C. At what stage of production should a rational producer produce? Why?
4. Many Economists argued that in the short-run there is trade-off between inflation and
unemployment. Illustrate how does the government of Ethiopia reduce the problem of
inflation and unemployment?( Hint: you have to use your justification) (3 points)

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