2025- Question Bank for Exam Prep ECON 303: Intermediate
Macroeconomic Theory I - Concordia University Work hard and good
luck with the final
ECON 303: INTERMEDIATE MACROECONOMIC THEORY I
V1® Instructor: Axel Watanabe,* Ph.D. Fall 2025
⟳ Last updated on August 27, 2025 at 20:48 yourself. Don’t count on them. You won’t find them on your
exam.
Below is a list of questions that summarize the lecture and it And occasionally, I toss in
is meant to help you retain the topics you have just learned
and try them out by yourself.
Some questions are easy and some are a bit challenging.
I marked each question as follows for your reference:
This is the basic recipe that you can and should be able
to follow right out of the box.
This file is an intellectual property of myself and Concor-
I’ll ask you to switch proteins. In lecture, you learned dia University. Any unauthorized use for unintended pur-
how to make lamb tajine. Now make beef tajine by poses, including distributing it outside the Concordia server,
yourself.
is strictly prohibited.
Take a step farther and modify some seasoning, which is a registered trademark of Sesame Workshop.
is much harder to do than switching proteins and you
can very easily mess things up. There is no need to
solve this unless you are aiming for an A. If you are
just trying to pass, by all means skip this. I’d rather like P PRODUCTION-POSSIBILITY FRONTIER
you to spend time on and questions and secure
P.1 Definition of Econokics Pick whatever you have
points in the exam than to try questions only to fail
at hand right now or the service you just received and
in the end. discuss the economic trade-off associated with it from
Regardless of the ratings above, most of the questions are 1) consumer’s perspective and 2) producer’s perspec-
readily edible when it is still hot but not so much so if you tive.
wait around to get down to it right before the exam. Be sure
to have a set time with your group members to compare notes P.2 Definition of Econokics Explain why the air
(work on the problems over the weekend and then check your you’re breathing in right now does not make an eco-
answers with your group members on Monday for example). nomic subject.
Questions marked with are vital. Not that you can
pass this course by solving only ones but nonetheless they P.3 PPF Define PPF.
,are important either in themselves or because other questions
depend on them and you cannot go far without mastering P.4 PPF In the economy we had today, are the following
ones first. part of PPF? Why or why not?
Questions marked with are by prescription only and
• 100 lectures and 100 concerts
not meant for general consumption. Do not solve these
without my prior clearance. If you’d like to deepen your • 10 lectures and 10 concerts
understanding, check in with me first. questions are a bit • 0 lectures and 0 concerts
beyond the scope of the material covered, a repeat of prior
P.5 PPF In the example we used today, suppose that
questions that I wrote for your drill, or too obvious. These
Zedd and I work 40 hours each rather than 20 hours.
questions are in the pool of candidate questions for the exams
Redraw the PPF.
but your priority should go to non- questions.
Work in the following order of priority: → → P.6 PPF In the example we used today, suppose that
→ → . If you are prescribed take it only after both Zedd and I got a steroid shot and now we can
you finish over-the-counter’s above. produce (probably very moody but nonetheless) lec-
Some questions seem easy and they are. Some others ture and concerts twice as fast. In particular, I can pro-
seem easy but only ostensibly so. I add after those ques- duce one lecture in an hour or one concert in an hour,
tions to clarify my intentions (or occasionally, ulterior mo- and Zedd can produce one lecture in an hour or one
tives) behind them so you can raise your alert level accord- concert in 30 minutes. Redraw the PPF.
ingly.
Some questions come with (part of) the answer and/or P.7 PPF
In the example we used today, what would
tips . I just add them to help you check your answer by happen to the PPF if Zedd killed me?1
* Department of Economics, Concordia University 1 He doesn’t even know that I exist. I’m probably safe.
1
, Chapter C1
Manitoba Québec British Columbia P.15 PPF In the example we used in class today, what
is Zedd’s opportunity cost of a lecture? And what is
Salmon 1 salmon / 1 worker 1 salmon / 5 workers 1 salmon / 5 workers
Zedd’s opprotunity cost of a concert?
Orange 1 orange / 20 workers 1 orange/ 5 workers 1 orange/ 1 worker
P.16 PPF In the example we used in class today, while
Table 1. both Zedd and I can prepare one lecture in the same
two hours from an accounting point of view, I am a
P.8 PPF In class, starting from the top left end of the better instructor than him from an economic point of
PPF, we let me switch from concert to lecture produc- view. How so?
tion first. Sketch a PPF when you switch Zedd first
instead. Is the resulting line a PPF? Why or why not? P.17 PPF Consider an economy with two producers, Olaf
and Baymax, who produce two commodities, snow-
P.9 PPF Consider the technology specified in table 1. balls and microbots. Olaf takes two minutes to make
What are the outputs and factor of production in ta- one snowball and four minutes to make one microbot,
ble 1? whereas Baymax takes one minute to make one snow-
ball and one minute to make one microbot. Their PPF
P.10 PPF In table 1, if each province has 100 workers, is represented in figure 1. Who is switching in the red
what is the maximum number of oranges and salmon
that can be produced? 60
P.11 PPF Which province is the most cost-effective in the
production of oranges in table 1? 50
P.12 PPF In table 1, which province is the least cost-
effective in salmon fishing? 40
Microbots
P.13 PPF If all the provinces in table 1 are specialized in 30
salmon fishing and if they were to start producing or-
anges, which province should be the first one to switch
production from salmon to orange? On what ground? 20
And how many salmon do they have to give up to pro-
duce the first orange?
10
0
0 20 40 60 80
Snowballs
Figure 1.
segment (0 to 40 snowballs) and why?
P.18 PPFWhat is this economy’s MRT in figure 1? It
will take two distinct values depending on the ongoing
number of snowballs.
P.19 Intertekporal Choice Consider the economy where
farmers produce corn. Its PPF is sketched in figure 2.
If the economy chooses point A, how much corn do
they consume this year and how much do they leave
for next year?
P.20 Intertekporal Choice How much can they con-
sume next year in item P.19?
P.21 Intertekporal Choice What is the opportunity cost
of corn this year at point A in figure 2? Don’t just
give me a number but tell me in terms of what.
P.22 Intertekporal Choice Between A and B in figure 2,
which point will result in the larger PPF in the years to
follow?
P.14 PPF Define opportunity cost.
2
, Chapter C1
70
60
Pumpkin-spiced latte, pumpkin-spiced yogurt, pumpkin-
Corn Next Year (tons)
50
40
30
20
10
0
0 5 10 15 20 25 30
Corn This Year (tons)
Figure 2.
C1 BUDGET CONSTRAINT
C1.1 Budget Constraint Figure 3 sketches ’s budget
constraint. What is the opportunity cost of fish in terms
C1.1 Budget Constraint Suppose that the (nominal)
of cheese?
lump-sum tax is $1,000 and the (nominal) price of the
composite good is $2 per basket. How much is the real
10
lump-sum tax T ?
9
C1.2 Budget Constraint We took the composite good
8
as a numéraire in class today. What if we take the
7 leisure as a numéraire instead? What is the real price of
the composite good and leisure? See that the choice
Cheese (oz)
6
of a numéraire is arbitrary. How many baskets of C
5 trade for one unit of l?
4
C1.3 Budget Constraint For cheesecakes and tea, we can
3 observe how the budget constraint changes when the
price of tea changes. For the work-leisure choice, the
2
real price of C is always one. How, then, can we an-
1 alyze the change in the budget constraint when the
0 (nominal) price of the basket changes? Recall that
0 1 2 3 4 5 we defined the real wage to be W/2 (h/ ) in class for
Fish (oz)
example. How do we reflect the change in the nominal
price of C?
Figure 3. This is a culinary offense by the way.
C1.4 Budget Constraint Sketch the budget constraint when
real non-wage disposable income 𝑢 − T = 0.
C1.2 Budget Constraint Fill in the budget constraint in C1.5 Budget Constraint Suppose 𝑢 − T ∈ (−vh, 0).2
figure 3 when the price of cheese doubles. 𝑢−T
If l = h + , how much C does have under his
v
budget?
C1.6 Budget Constraint Sketch ’s budget constraint
in item C1.5. In this case, is (C, l) = (0, h) within his
budget?
PA from the cockpit: Suppose 𝑢 − T ≥ 0 in what follows
unless otherwise specified.
2 Keep in mind, though, that we usually assume 𝑢 − T ≥ 0.
3
Macroeconomic Theory I - Concordia University Work hard and good
luck with the final
ECON 303: INTERMEDIATE MACROECONOMIC THEORY I
V1® Instructor: Axel Watanabe,* Ph.D. Fall 2025
⟳ Last updated on August 27, 2025 at 20:48 yourself. Don’t count on them. You won’t find them on your
exam.
Below is a list of questions that summarize the lecture and it And occasionally, I toss in
is meant to help you retain the topics you have just learned
and try them out by yourself.
Some questions are easy and some are a bit challenging.
I marked each question as follows for your reference:
This is the basic recipe that you can and should be able
to follow right out of the box.
This file is an intellectual property of myself and Concor-
I’ll ask you to switch proteins. In lecture, you learned dia University. Any unauthorized use for unintended pur-
how to make lamb tajine. Now make beef tajine by poses, including distributing it outside the Concordia server,
yourself.
is strictly prohibited.
Take a step farther and modify some seasoning, which is a registered trademark of Sesame Workshop.
is much harder to do than switching proteins and you
can very easily mess things up. There is no need to
solve this unless you are aiming for an A. If you are
just trying to pass, by all means skip this. I’d rather like P PRODUCTION-POSSIBILITY FRONTIER
you to spend time on and questions and secure
P.1 Definition of Econokics Pick whatever you have
points in the exam than to try questions only to fail
at hand right now or the service you just received and
in the end. discuss the economic trade-off associated with it from
Regardless of the ratings above, most of the questions are 1) consumer’s perspective and 2) producer’s perspec-
readily edible when it is still hot but not so much so if you tive.
wait around to get down to it right before the exam. Be sure
to have a set time with your group members to compare notes P.2 Definition of Econokics Explain why the air
(work on the problems over the weekend and then check your you’re breathing in right now does not make an eco-
answers with your group members on Monday for example). nomic subject.
Questions marked with are vital. Not that you can
pass this course by solving only ones but nonetheless they P.3 PPF Define PPF.
,are important either in themselves or because other questions
depend on them and you cannot go far without mastering P.4 PPF In the economy we had today, are the following
ones first. part of PPF? Why or why not?
Questions marked with are by prescription only and
• 100 lectures and 100 concerts
not meant for general consumption. Do not solve these
without my prior clearance. If you’d like to deepen your • 10 lectures and 10 concerts
understanding, check in with me first. questions are a bit • 0 lectures and 0 concerts
beyond the scope of the material covered, a repeat of prior
P.5 PPF In the example we used today, suppose that
questions that I wrote for your drill, or too obvious. These
Zedd and I work 40 hours each rather than 20 hours.
questions are in the pool of candidate questions for the exams
Redraw the PPF.
but your priority should go to non- questions.
Work in the following order of priority: → → P.6 PPF In the example we used today, suppose that
→ → . If you are prescribed take it only after both Zedd and I got a steroid shot and now we can
you finish over-the-counter’s above. produce (probably very moody but nonetheless) lec-
Some questions seem easy and they are. Some others ture and concerts twice as fast. In particular, I can pro-
seem easy but only ostensibly so. I add after those ques- duce one lecture in an hour or one concert in an hour,
tions to clarify my intentions (or occasionally, ulterior mo- and Zedd can produce one lecture in an hour or one
tives) behind them so you can raise your alert level accord- concert in 30 minutes. Redraw the PPF.
ingly.
Some questions come with (part of) the answer and/or P.7 PPF
In the example we used today, what would
tips . I just add them to help you check your answer by happen to the PPF if Zedd killed me?1
* Department of Economics, Concordia University 1 He doesn’t even know that I exist. I’m probably safe.
1
, Chapter C1
Manitoba Québec British Columbia P.15 PPF In the example we used in class today, what
is Zedd’s opportunity cost of a lecture? And what is
Salmon 1 salmon / 1 worker 1 salmon / 5 workers 1 salmon / 5 workers
Zedd’s opprotunity cost of a concert?
Orange 1 orange / 20 workers 1 orange/ 5 workers 1 orange/ 1 worker
P.16 PPF In the example we used in class today, while
Table 1. both Zedd and I can prepare one lecture in the same
two hours from an accounting point of view, I am a
P.8 PPF In class, starting from the top left end of the better instructor than him from an economic point of
PPF, we let me switch from concert to lecture produc- view. How so?
tion first. Sketch a PPF when you switch Zedd first
instead. Is the resulting line a PPF? Why or why not? P.17 PPF Consider an economy with two producers, Olaf
and Baymax, who produce two commodities, snow-
P.9 PPF Consider the technology specified in table 1. balls and microbots. Olaf takes two minutes to make
What are the outputs and factor of production in ta- one snowball and four minutes to make one microbot,
ble 1? whereas Baymax takes one minute to make one snow-
ball and one minute to make one microbot. Their PPF
P.10 PPF In table 1, if each province has 100 workers, is represented in figure 1. Who is switching in the red
what is the maximum number of oranges and salmon
that can be produced? 60
P.11 PPF Which province is the most cost-effective in the
production of oranges in table 1? 50
P.12 PPF In table 1, which province is the least cost-
effective in salmon fishing? 40
Microbots
P.13 PPF If all the provinces in table 1 are specialized in 30
salmon fishing and if they were to start producing or-
anges, which province should be the first one to switch
production from salmon to orange? On what ground? 20
And how many salmon do they have to give up to pro-
duce the first orange?
10
0
0 20 40 60 80
Snowballs
Figure 1.
segment (0 to 40 snowballs) and why?
P.18 PPFWhat is this economy’s MRT in figure 1? It
will take two distinct values depending on the ongoing
number of snowballs.
P.19 Intertekporal Choice Consider the economy where
farmers produce corn. Its PPF is sketched in figure 2.
If the economy chooses point A, how much corn do
they consume this year and how much do they leave
for next year?
P.20 Intertekporal Choice How much can they con-
sume next year in item P.19?
P.21 Intertekporal Choice What is the opportunity cost
of corn this year at point A in figure 2? Don’t just
give me a number but tell me in terms of what.
P.22 Intertekporal Choice Between A and B in figure 2,
which point will result in the larger PPF in the years to
follow?
P.14 PPF Define opportunity cost.
2
, Chapter C1
70
60
Pumpkin-spiced latte, pumpkin-spiced yogurt, pumpkin-
Corn Next Year (tons)
50
40
30
20
10
0
0 5 10 15 20 25 30
Corn This Year (tons)
Figure 2.
C1 BUDGET CONSTRAINT
C1.1 Budget Constraint Figure 3 sketches ’s budget
constraint. What is the opportunity cost of fish in terms
C1.1 Budget Constraint Suppose that the (nominal)
of cheese?
lump-sum tax is $1,000 and the (nominal) price of the
composite good is $2 per basket. How much is the real
10
lump-sum tax T ?
9
C1.2 Budget Constraint We took the composite good
8
as a numéraire in class today. What if we take the
7 leisure as a numéraire instead? What is the real price of
the composite good and leisure? See that the choice
Cheese (oz)
6
of a numéraire is arbitrary. How many baskets of C
5 trade for one unit of l?
4
C1.3 Budget Constraint For cheesecakes and tea, we can
3 observe how the budget constraint changes when the
price of tea changes. For the work-leisure choice, the
2
real price of C is always one. How, then, can we an-
1 alyze the change in the budget constraint when the
0 (nominal) price of the basket changes? Recall that
0 1 2 3 4 5 we defined the real wage to be W/2 (h/ ) in class for
Fish (oz)
example. How do we reflect the change in the nominal
price of C?
Figure 3. This is a culinary offense by the way.
C1.4 Budget Constraint Sketch the budget constraint when
real non-wage disposable income 𝑢 − T = 0.
C1.2 Budget Constraint Fill in the budget constraint in C1.5 Budget Constraint Suppose 𝑢 − T ∈ (−vh, 0).2
figure 3 when the price of cheese doubles. 𝑢−T
If l = h + , how much C does have under his
v
budget?
C1.6 Budget Constraint Sketch ’s budget constraint
in item C1.5. In this case, is (C, l) = (0, h) within his
budget?
PA from the cockpit: Suppose 𝑢 − T ≥ 0 in what follows
unless otherwise specified.
2 Keep in mind, though, that we usually assume 𝑢 − T ≥ 0.
3
