ECO Midterm
A person gets a raise at work
microeconomics
Which is NOT an example of a resource? money land human capital labor machinery
money
Determine whether each description refers to nominal gross domestic product (GDP) or real GDP. A measure of an economy's output using current prices. ------ A measure of an economy's output using constant prices. ------ A measure of output that is adjusted for inflation. ------ A measure of output that is not adjusted for inflation. -------
nominal GDP real GDP real GDP nominal GDP
Comparing the benefits and costs of engaging in an activity. resourcesmarginstrade-offfinancial capitalrecessionscarcity Solved
trade-off
In 1933, if inflation in the United States was -2.8% and the growth rate of real GDP was -1.2%, what was the nominal GDP growth rate? 1.6% -1.2% -4% -1.6%
-4%
Use the table on the hypothetical price of coffee beans and the Consumer Price Index (CPI) in Locoland to answer the questions. Please round all answers to the nearest whole number. Price per pound CPI 2010 $7 123 2011 $13 155 What is the inflation rate between 2010 and 2011? inflation rate: What is the percentage change in the price per pound of coffee between 2010 and 2011? percent change:
What is the inflation rate between 2010 and 2011? inflation rate: 26.01% What is the percentage change in the price per pound of coffee between 2010 and 2011? percent change: 85.71%
Refer to the hypothetical data in the table to answer the three questions. Year Nominal interest rate Real interest rate Inflation rate 2017 7%. — 7% 2018 7%. 9% — 2019 — 9% 5% What was the real interest rate in 2017? What was the inflation rate in 2018? What was the nominal interest rate in 2019?
What was the real interest rate in 2017? 0% What was the inflation rate in 2018? -2% What was the nominal interest rate in 2019? 14%
You open a savings account that pays 0.75% interest a year. What is your real rate of return if the inflation rate is 1%? A. 1.75% B. -0.25% C. 1% D. -0.75%
B. -0.25%
Consider the data shown in the table. Assume that the economy produces only barrels of oil. What is the real GDP for this year using last year as the base year? $4,800,000 $4,980,000 $5,229,000 $5,104,500
$4,980,000
The image shows the circular flow of money through an economy. Use the information provided in the image to answer the questions. Please give the answers in millions of dollars. What is the value of total consumer spending? total consumer spending: ------- What is the total value of government spending? government spending: ------- What is the country's total GDP? total GDP: ----------
$8200 million $2400 million $11400 million
Which of the items is a consumer good? a factory a jackhammer a dump truck a breakfast burrito Which of the items is a capital good? a fire truck a pair of jeans a doll a baseball cap Which statement is true regarding capital goods and investment? Investment is the purchase of financial assets like stocks and bonds, not the purchase of capital goods. Capital goods are used to produce future consumption goods and are an investment in future consumption. Capital goods are more expensive to produce and expensive goods are an investment. Capital goods last a long time and so are an investment, whereas consumer goods are used up quickly. Incorrect
- a breakfast burrito -a fire truck -Capital goods are used to produce future consumption goods and are an investment in future consumption.
The government passes a new initiative to encourage savings in a country with a well-functioning banking system. Which input in the production function changes, and what is the effect on economic growth in the country?-Human capital is enhanced, and economic growth is positively affected. -The capital stock increases, and economic growth is positively affected. -The capital stock decreases, and economic growth is negatively affected. -Technological advance occurs, but there is no effect on economic growth.
-The capital stock increases, and economic growth is positively affected.
Ruritania's Ministry of Economics has considered various plans to stimulate economic growth in the kingdom. Which proposal would have the best chance of success? -To increase the general level of skills in the labor force, subsidize tuition to enable more people to attend college. -To reduce risk and encourage entrepreneurship, require the government to take control of and operate any businesses that do not earn a profit for two consecutive years, including providing salaries for the workers and managers equal to the average for that industry plus 10%. -To lower unemployment by discouraging layoffs, require businesses to continue paying the salary of any worker who loses his or her job until he or she finds a new one. -To enhance efficiency and minimize the size of the private sector, require private firms to enter into partnerships whereby ownership of firms is split equally between the government and private owners. Which source of productivity growth does the best proposal directly influence? human capital physical capital technology income equality
-To increase the general level of skills in the labor force, subsidize tuition to enable more people to attend college. -human capital
Andrew, a college student, loves drinking coffee late at night to study for exams. Having a small income, he is used to buying cheap, bad tasting coffee that he needs to grind and brew himself. The coffee tastes putrid but, with enough cream and sugar, Andrew is able to tolerate it. Occasionally, he does go out to Starbucks when he has spare money. After graduation, Andrew gets a job working at a database firm as a programmer. His income is now a healthy $75,000 a year and he decides he's had enough bad tasting coffee. He ends up buying coffee daily from Starbucks even though it costs significantly more. Andrew's demand for Starbucks coffee changed as a result of -a change in a related good or service. -a change in expectations. -a change in technology. -a change in the number of consumers. -a change in income.
-a change in income.
What factors into the opportunity cost for a decision? -benefits from the best foregone alternative -the sum of all benefits from all foregone alternatives -the difference between the benefits of the first and second best choices -actual financial cost of the decision -time spent due to the decision
-benefits from the best foregone alternative -actual financial cost of the decisiond -time spent due to the decision
Classify the items according to the expenditure approach to Canada's GDP calculation. 1. Personal consumption expenditures (C) 2. Gross private domestic investment (I) 3. Government consumption and gross investment (G) 4. Exports (EX) 5. Imports (IM)
1. Tyler purchases a lattefrom his local coffee shop to boost his energy while working. 2. A local coffee shop buys a new coffee press to help their workers make drinks more quickly. 3. The government builds a new road to accomodate the surge of customers that are driving to a local coffee shop. 4. Taking advantage of its growing reputation, a Canadian coffee shop begins selling T‑shirts online to customers in the United States. 5. Colombian coffee beans are sold to Canadian consumers.
Consider the statements about a family in South America. Match each situation with the term that best describes it. Each term is used only once, so it is important to determine the situation that best fits the term. 1. As a teenager, Juan Carlos worked as an assistant to an electrician after school. Consequently, he learned a lot about being an electrician, an important skill that can result in gainful employment. 2. After graduating from high school, Juan Carlos was able to go to Canada to study. After he finished his college degree, he took a job at a prestigious Canadian firm, married his Canadian girlfriend, and settled in to stay in Canada. 3. Juan Carlos' father, Alberto, has always been envious of his neighbor's aging tractor. The tractor allowed the neighbor to produce 50% more than Alberto, even though their farms are virtually identical. 4. When the neighbor bought a second tractor for his son to drive, their farm's output increased again. But they found the second tractor did not increase their output as much as the first one. 5. Appreciative of his father's hard work, Juan Carlos buys Alberto a brand new tractor, the one with the air-conditioned cab. Alberto is thrilled when the fancy new machine allows him to almost triple his output; he is now producing more than all of his neighbors, many of whom have old tractors. 6. Alberto and his neighbors are troubled by the lack of water in the river that runs by their farms. The laws of their country allow farmers to take limited amounts of water from the river for crop irrigation, but a wealthy celebrity built a villa upstream of the farms and unlawfully diverted much of the water onto his land for a decorative stream and waterfall. Local officials refuse to do anything to help the farmers until they pay a small unofficial 'fee.'
1. human capital 2. brain drain 3. physical capital 4. property rights 5. diminishing returns 6. catch‑up effect
Classify each statement as either true or false. 1. New technological developments can help us adapt to depleting sources of natural resources. 2. Research and development funds from the government to private industry never pay off for the country as a whole; they only increase the profits of rich corporations. 3. In order for fledgling industries in poor nations to thrive, they must receive protection from foreign trade. 4. Countries with few natural resources will always be poor. 5. As long as real GDP (gross domestic product) grows at a slower rate than the population, per capita real GDP increases.
1. true 2. false 3. false 4. false 5. false
Nominal GDP grew by 4%, and the growth rate of real GDP was 2.5%. What was the rate of inflation? 4% 2.5% 1.5% 6.5%
1.5%
Demand: Thinking Like a Buyer — End of Chapter Problem Consider the following statement: "An increase in the cost of oil will cause the price of a plane ticket to increase. This increase in price will cause a decrease in demand for airline travel and a leftward shift in the demand curve." What is the flaw of this reasoning? -The cost of oil affects supply and not demand so prices of tickets will remain the same. -The increase in the cost of oil will cause a decrease in the price of a plane ticket. -A decrease in demand will shift the curve rightward, not leftward. -An increase in the price of a ticket will not cause a decrease in demand, but rather a decrease in quantity demanded.
An increase in the price of a ticket will not cause a decrease in demand, but rather a decrease in quantity demanded. Solved
The table shows consumer price index data for the United Kingdom. 2013 98.2 2014. 99.6 2015. 100 2016. 101 2017 103.6 2018 106 Which year was the base year for this index? A. 2014 B. 2015 C. 2016 D. 2017
B. 2015
Which of the following is the best definition of the opportunity cost of a decision? The sum of all benefits from all foregone alternatives. The difference between the benefits of the first and second best choices. Actual financial cost of a decision. Benefits from the best foregone alternative.
Benefits from the best foregone alternative.
During the Obama administration, the development of low‑cost batteries for electric cars received large amounts of federal funding via subsidies. Meanwhile, American households gave a higher priority towards minimizing their environmental impact. Consider the market for zero‑emissions electric vehicles, where there is an upward‑sloping supply curve and a downward‑sloping demand curve. In which direction will demand and supply shift? Both curves will shift left. Demand will shift left, and supply will shift right. Both curves will shift right. Demand will shift right, and supply will shift left. What will happen to the equilibrium price? The price will increase. The price will change ambiguously. The price will decrease. The price will remain constant.
Both curves will shift right. The price will change ambiguously.
You purchase a certificate of deposit that earns an advertised rate of 1.75% interest per year. What is your real rate of return if the actual inflation rate is 1.9%? A. 1.75% B. 0.15% C. -0.15% D. 3.65%
C. -0.15%
Question 18 of 20 - Quiz 1 18 of 20 Questions Assignment Score:97.5% Solution Solved Question 18 of 20 My Attempt Demand: Thinking Like a Buyer — End of Chapter Problem Price (per round-trip)Quantity (number of round-trip tickets)0.01.02.03.04.05.06.07.00100200300400500600700DemandA Kathy is attending school in Philadelphia. Each year she returns home to visit her family and friends in New York City. Kathy's annual demand curve for train tickets from Philadelphia to New York is provided in the accompanying graph. a. First, determine how much benefit Kathy receives from each trip home. Kathy receives $ 500 is answer of marginal benefit from the first trip. Kathy receives $ 400is answer of marginal benefit from the second trip. Kathy receives $ 300 is answer of marginal benefit from the third trip. Kathy receives $ 200 is answer of marginal benefit from the fourth trip. Kathy receives $ 100 is answer of marginal benefit from the fifth trip. b. Next, place point A on the graph to demonstrate how many trips Kathy will take if the price is $230 per round-trip ticket. c. If the price of a round-trip ticket is $230, how many trips should Kathy take? one trip five trips four trips two trips three trips
C. three trips
Hyperinflation is: A. very high rates of economic growth. B. a period of high money growth in an economy. C. inflation that occurs when the economy is in a recession. D. extremely high rates of inflation.
D. extremely high rates of inflation.
Entrepreneurs are an essential part of the economy. Sort the following characteristics according to their relationship to entrepreneurship.
Essential to Entrepreneurship: Connecting productive resources Being innovative Making strategic decisions Being a risk taker Non-Essential to Entrepreneurship: A college degree Knowledge of accounting Outgoing personality Being wealthy Ability to complete paperwork
In Maricaibo, incandescent lightbulbs are being replaced with fluorescent lightbulbs, which have fewer negative effects and many more significant benefits. However, the energy efficiency of fluorescent lightbulbs has driven down the price of lightbulbs so significantly that incandescent lightbulbs can no longer compete. After six months, everybody has switched to the cheaper and better fluorescent lightbulbs. Assume that Maricaibo consumes the same quantity of lightbulbs now as they did six months ago. Please select the choice that best describes the short‑run effects of this industrial change on Maricaibo's GDP and its standard of living. There is not enough information to answer the question. GDP decreases and standard of living increases. GDP and standard of living both decrease. GDP increases and standard of living decreases. GDP and standard of living both increase.
GDP decreases and standard of living increases.
Label each description with the correct price index. a. An average of prices of consumption goods, capital goods, government goods, and export goods: b. An average of consumption expenditures by consumers on household goods, with food and energy prices excluded: c. An average of prices of a basket of goods and services purchased by a typical household:
GDP deflator Personal consumption expenditure price index (PCE) Consumer price index (CPI)
Please match each description with the correct price index. A broad price index based on all the components of GDP---- A price index based on the cost of common inputs for firms---- A measure of inflation based on the cost of goods that households typically purchase------
GDP deflator producer price index consumer price index
Question 1 of 20 - Quiz 2 1 of 20 Questions Assignment Score:82.7% Solution Solved Question 1 of 20 My Attempt Classify each scenario according to whether it describes an investment in human capital or physical capital.
Human capital: Bruce goes back to school to learn a new computer programming language. Ethel learns to use a keyboard so she can produce her weekly newspaper column faster than she can when writing it by hand. Physical capital: Daniel is hired to work at the local sugar factory and is trained in the use of the factory's processing machinery. Angus buys a new tractor for his wheat farm. Cecile buys textbooks and notebooks so she will be ready for the new school year.
You and other college students are deciding whether to major in music or engineering. You learn that there is a shortage of engineers, making it easy for engineering graduates to find employment, while there is a glut of musicians for whom finding a job is difficult. As a result, you and many other college students decide to major in engineering. Which economic principle does this illustrate? Markets tend to move towards equilibrium as individuals respond to incentives. Specialization leads to economic efficiency. Changes in incentives are unlikely to change the decisions people make. Government intervention can improve efficiency when there is a market failure. Individuals do not normally take into account the decisions of other individuals.
Markets tend to move towards equilibrium as individuals respond to incentives.
In January of 2014, person made a personal budget.
Microeconomics
Suppose that the video game company Ultravision releases a new game called "Call of Obligation: Modern Combat 3." This can be analyzed using tools from both microeconomics and macroeconomics. Classify the items according to whether they are an application in microeconomics or macroeconomics. MicroeconomicsMacroeconomics How does Ultravision choose to market "Call of Obligation?" How much will Ultravision charge for "Call of Obligation?" How much will Ultravision pay the developers of the game? Is Ultravision able to sell all of the "Call of Obligation" games it produces or do they need to produce more? Have the millions of dollars that people have spent on video games worldwide affected the gross domestic Product (GDP) in their respective countries? Has the country's unemployment rate changed as Ultravision hired a huge team of workers to develop the game? How much less economic output occurs countrywide because workers call in sick to stay home and play either "Call of Obligation" or another video game? Answer Bank Solved
Microeconomics: - how does Ultravision choose to market Call of obligation -how will Ultravision charge for call of obligation - how will Ultravision pay for call of obligation - is Ultravision able to sell all of the call of obligation games it makes or do they need to produce more? Macroeconomics: -Have the millions of dollars that people have spent on video... - has the country unemployment rate changed Ultravision hired... how much less economic output occurs countrywide....
The market value of which of the examples would be considered double counting in the calculation of GDP? Please place into the appropriate category.
Not included in GDP because of double counting: wheels used to produce a skateboard that will be sold new a ticket for the X Games bought from a person on a street corner Included in GDP: a new skateboard bought for a niece the commission paid to the seller of a previously owned collector's skateboard
Please classify each policy according to whether it tends to foster or inhibit economic growth. Policies that tend to foster economic growth: Policies that tend to inhibit economic growth:
Policies that tend to foster economic growth: -establishing a stable national government that leads to domestic law and order and promotes social peace and unity -clearly defining and enforce property rights that extend to all members of society -creating a public infrastructure, including communication, education, medical services, sanitation, and transportation facilities -establishing an independent central bank that possesses the power to properly control the money supply Policies that tend to inhibit economic growth: -adopting a policy of fixed exchange rates that allows the government to increase the value of the domestic currency above market rates
Sort the following scenarios according to whether they would cause a shift in the demand curve or movement along a demand curve.
Shift of the Demand Curve: -Out-N-In, a burger joint with an absurd national following in the U.S., sells more burgers as the price of chicken increases. -After it earns 1st prize in the spicy category of a ramen tasting competition, college students buy more Lamian brand ramen noodles. Movement Along the Demand Curve: -Nettoyer raises the price for its laundry detergent, which results in less sales and strange scents around college dorm floors. -Le Bureau et Chaise offers a one weekend clearance sale on its old model of desks, which causes students to rush to upgrade their dorm furniture.
Place the scenarios according to whether they would cause a shift in the demand curve or movement along a demand curve.
Shift of the demand curve; -Out‑N‑In, a burger joint with an absurd national following in the U.S., sells more burgers as the price of chicken increases. -After it earns first prize in the spicy category of a ramen tasting competition, college students buy more Lamian brand ramen noodles. -In the country of Weskia, shorts designed to sag are no longer in vogue and sales drop off as a result. -Last Hope, an energy drink company, notices students are desperate during finals and change their buying behavior. Movement along the demand curve: -Nettoyer raises the price for its laundry detergent, which results in less sales and strange scents around college dorm floors. -Le Bureau et Chaise offers a one weekend clearance sale on its old model of desks, which causes students to rush to upgrade their dorm furniture.
Sort the following scenarios into whether the change in quantity described is caused by a shift in the supply curve or movement along a supply curve.
Shift of the supply curve: -More cans of tuna hit the shelves at all major grocers after it was discovered that flash steaming tuna before using mechanical processes to extract meat allows for the removal of more tuna flesh. -Amplitude decides to join the smartphone market. Movement along the supply curve: -Americans put up their gold and silver jewelry for sale as a result of rising prices. -A local fight club supplies less of its premium quality soap as a result of lower prices.
A new study discovers the health benefits of eating fish regularly. At the same time, some consumers decide to become vegetarians. What is the effect of these events on the equilibrium price and quantity in the fish market? The equilibrium price rises, and the equilibrium quantity falls. The equilibrium price falls, and the equilibrium quantity rises. The change in both the equilibrium price and quantity is ambiguous. The equilibrium price falls, and the change in the equilibrium quantity is ambiguous.
The change in both the equilibrium price and quantity is ambiguous.
What happens to the equilibrium price and quantity when demand decreases and at the same time supply increases, but the relative size of the shifts are not known? -The equilibrium quantity falls, and the change in the equilibrium price is ambiguous. -The equilibrium price rises, and the change in the equilibrium quantity is ambiguous. -The equilibrium price falls, and the change in the equilibrium quantity is ambiguous. -The equilibrium quantity rises, and the change in the equilibrium price is ambiguous.
The equilibrium price falls, and the change in the equilibrium quantity is ambiguous.
The five-dollar Burger Joint gift card that your friend gave you for your birthday expires today. You can either use the gift card to buy yourself dinner at Burger Joint, or you can stay home and eat a delicious home-cooked meal. What is the opportunity cost of eating the home-cooked meal?The value of a five-dollar dinner at Burger Joint.The value of the ingredients that go into the home-cooked meal, and the value of a five-dollar dinner at Burger Joint.There is no opportunity cost since you did not pay for the gift card.The time it takes to eat your home-cooked meal, and the value of the five-dollar dinner at Burger Joint.The value of the ingredients that go into the home-cooked meal. Solved
The value of the ingredients that go into the home-cooked meal, and the value of a five-dollar dinner at Burger Joint.
There are empty candy shelves at Walmart on the day before Halloween. Which of the following explains this event? There is a rise in the equilibrium price of candy. Walmart decided that kids should not have candy on Halloween. There is a shortage in the candy market. There is a surplus in the candy market.
There is a shortage in the candy market.
The Japanese car maker Honda owns production facilities in Marysville, Ohio. If the cars made there are sold exclusively in the United States, in which category would the cars be counted? U.S. imports Japan's GDP Japanese exports U.S. GDP
U.S. GDP
Classify each scenario based on whether it will lead to upward or downward pressure on the equilibrium price of the good marked in bold.
Upward pressure on price: An impending nuclear holocaust causes people to stock up on twonkies, a popular snack cake provided by many companies. Downward pressure on price: Extreme weather in New York, where the Super Bowl is scheduled to be played, makes people disinterested in purchasing Super Bowl tickets. The Nile River floods this year adding an exceptional amount of silt to the soil, resulting in increased crops of cotton. An outbreak of mad cow disease causes Americans to abstain from eating beef.
The country of Sabora currently bans all international trade. Sabora makes high-quality spears and is currently producing as many spears as the local population wishes to buy at $50 each. Other countries currently produce and sell spears at $125 each. The newly elected president of Sabora decides to allow international trade for the first time in Sabora's existence. They will begin trade next year. Saboran spear-makers will happily engage in trade. Assume there is free trade, and that Sabora will sell all the spears they make. Note that not all statements will be used. What will happen to the quantity and price of Sabora's spears next year? There will be movement along Sabora's supply curve. A greater quantity of Sabora's spears are supplied at a higher price. Answer Bank Sabora's supply curve will shift to the right. A greater quantity of Sabora's spears are supplied at the same price. Sabora's spear prices are lower for the same quantity. Sabora's supply curve will shift to the left. When international trade is allowed, there will be a larger population and market that desires Sabora's spears. As a result, Sabora's spear incomewill increase.
What will happen to the quantity and price of Sabora's spears next year? -There will be movement along Sabora's supply curve. -A greater quantity of Sabora's spears are supplied at a higher price. When international trade is allowed, there will be a larger population and market that desires Sabora's spears. - As a result, Sabora's spear income will INCREASE.
Determine whether each activity will increase a worker's human capital. Will increase human capital: Will not increase human capital:
Will increase human capital: completing an on‑the‑job training program earning a college degree participating in an apprenticeship learning a new programming language Will not increase human capital: building a new factory buying a share of stock saving money for down payment on a new car
At Trader Joe's, the price of chocolate chip cookies falls. As a result, you would expect to see a decrease in the demand for chocolate chip cookies. a drop in the quantity demanded of chocolate chip cookies. a rise in the quantity demanded of chocolate chip cookies. an increase in the demand for chocolate chip cookies.
a rise in the quantity demanded of chocolate chip cookies.
a. Akari's boss has offered to pay her for up to 5 hours of overtime today. Akari has already been working for 10 hours and is deciding whether to work more hours. -When Akari considers whether she should work one more hour, she is applying the ______________ principle. -When Akari weighs the money she will earn from working overtime against what she gives up to work the extra hours, she is applying the ___________ If Akari decides to work the extra hours because she does not think any -overtime will be offered in the near future, she is applying the ________ principle. -If Akari decides to work overtime because her next best alternative is watching TV at home, she is applying the __________ principle. b. Niko, a local UPS manager, is trying to decide whether she should pay for additional trucks and drivers. -When Niko considers whether she should pay for one more truck and driver, she is applying the _______ principle. -When Niko compares the cost of a new truck and driver to the benefit of increasing the package center's daily deliveries, she is applying the _________ principle. -If Niko decides that paying for a new software upgrade is a better alternative than paying for additional trucks and drivers, she is applying the ___________ principle. -If Niko decides to pay for additional trucks and drivers because she expects the coming season to be extremely busy, she is applying the _________ principle.
a. MARGINAL cost-benefit principle. interdependence opportunity cost b. marginal cost-benefit opportunity cost interdependence
When prices increase -in a product market, firms will open and begin to produce. -Many firms will exit markets because they cannot compete, especially when prices decrease -to a significant degree. A(n) increase -in price signals to entrepreneurs that consumers want that market expanded, while a(n) decrease -in price signals an area consumers want contracted.
correct as is
The cost of lithium‑ion batteries, used for electric cars, has been dropping more steeply than expected. The equilibrium price of electric cars---------- The equilibrium quantity of electric cars --------
decreases increases
1. A 2014 study conducted by Yahoo! revealed that chocolate is the most popular flavor of ice cream in America. a. Suppose a severe drought in the Midwest causes dairy farmers to reduce the number of milk-producing cattle in their herds by a third. These dairy farmers supply cream that is used to manufacture chocolate ice cream. Indicate the possible effects on demand, supply, or both, as well as the equilibrium price and quantity of chocolate ice cream. The demand curve for chocolate ice cream -------- The supply curve for chocolate ice cream --------- The equilibrium price of chocolate ice cream -------- The equilibrium quantity of chocolate ice cream -------
does not shift. shifts to the left. increases. decreases.
The price that results when quantity demanded equals quantity supplied is most correctly called the equitable price. equilibrium price. stable price. non-surplus price. A surplus exists anytime the market is out of equilibrium. when quantity supplied exceeds quantity demanded. when quantity demanded exceeds quantity supplied. at the market clearing price.
equilibrium price. when quantity supplied exceeds quantity demanded.
In 2014, Venezuela experienced inflation of about 69%. In 2015, the inflation rate rose to around 181%, and by 2017, the inflation rate was over 4,000%. This scenario describes: -hyperinflation. -deflation. -economic growth. -money illusion.
hyperinflation
Label the statements as increasing GDP in either Canada or the United States. -Toyota, a Japanese company, manufactures cars in San Antonio, Texas. -Toyota, a Japanese company, manufactures cars in Toronto, Ontario. -ATI Technologies, a Canadian company, operates in Alberta. -Starbucks, a U.S. company, opens stores in New York state. -Tim Horton's, a Canadian company, opens coffee shops in New England.
increases GDP in the United States increases GDP in Canada increases GDP in Canada increases GDP in the United States increases GDP in the United StatesAnswer
Investment in human capital is best described as -investing in education and training to improve a worker's productivity. -accumulating machinery and equipment to improve returns to scale. -investing in companies that promote positive work-life balances for workers. -contributing to employee retirement plans to reduce worker turnover.
investing in education and training to improve a worker's productivity.
Which best describes technological knowledge? machinery, tools, and structures knowledge achieved through education, training, and experience knowledge used to produce goods and services property rights and a dependable legal system
knowledge used to produce goods and services
Holding everything else constant, producers are willing to offer more units for sale when the price at which they can sell their product increases. This concept is known as profit-maximizing condition. maximal output. law of one price. law of supply.
law of supply.
Economic growth is most accurately measured by changes in which variable?wages nominal GDP real GDP the capital stock For living standards to rise, what must occur? Nominal GDP must grow faster than the population. Output must grow faster than the population. The labor force must grow faster than the population. The capital stock must grow faster than the population.
real GDP Output must grow faster than the population.
Please select the economic term that is best described by each statement below. There are limited resources to satisfy all of society's wants .trade-offmarginsrecessionentrepreneurshipscarcitybusiness cycle
scarcity
Why is a hypothetical basket of goods used to measure inflation?----Using multiple goods allows consumers to compare goods to one another. -Consumers can see how inflation affects some goods and not others. -Consumers can see the general increase in price over time by using a basket of goods. -Using a hypothetical basket allows consumers to adjust their pricing expectations.
Consumers can see the general increase in price over time by using a basket of goods.
Place each statement in the appropriate category. GDP grows faster: GDP grows slower:
GDP grows faster: when property rights are clearly defined and upheld with technological progress with labor mobility GDP grows slower: when consumption is a large fraction of GDP during revolution with limited educational opportunities with inadequate public health
Classify each example as either relating to human capital, physical capital, or technology. Human capital: Physical capital: Technology:
Human capital: Adult literacy increases. The number of college graduates increases. a doctor's knowledge about a new cancer treatment More people graduate from culinary school. Physical capital: company cars company computers Technology: new distribution techniques a new cancer treatment
Why is increased technological knowledge for a nation important for growth? It allows the nation to be more productive in goods and services that it produces. Increased technological knowledge causes simultaneous increases in human capital and physical capital. Technological knowledge allows output to increase instantly. All of the above. None of the above.
It allows the nation to be more productive in goods and services that it produces.
Megan has a 11 hr gap in her course load for the fall semester. There are two courses available for her to take at that time: reading piano sheet music and beginning rock climbing. She does not have any experience with piano or rock climbing. In the end, she decides to enroll in the rock climbing course, despite her fear of heights. Identify which activity exhibits a potential trade-off with enrolling in rock climbing. learning rock climbing skills learning to read piano sheet music overcoming her fear of heights none of the above
learning to read piano sheet music
A person blames inflation for the general increase in prices at a the grocery stores throughout British Columbia
macroeconomics
The Canadian unemployment rate was lower in January of 2014 than it was in January of 2012
macroeconomics
Which of the following correctly shows the steps needed to calculate the inflation rate? -Tally up the cost of the basket of goods and services, subtract the value of goods and services that are no longer counted in the basket, and then calculate the inflation rate. -Find out what people typically buy, collect the prices from the stores where people shop, tally up the cost of the basket of goods and services, and calculate the inflation rate. -Find the total value of the basket of goods and services, assess quality changes from one period to the next, and measure the inflation rate. -Collect prices from the stores where people shop, assess the substitution that people make from low inflation to high inflation products, and calculate the difference in the prices that people pay. Solved
-Find out what people typically buy, collect the prices from the stores where people shop, tally up the cost of the basket of goods and services, and calculate the inflation rate.
The government begins to provide free primary school education. Which input in the production function changes, and what is the effect on economic growth in the country? -Technological advance occurs, and economic growth occurs. -Human capital is enhanced, and economic growth is positively affected. -The capital stock increases, and economic growth is positively affected. -The capital stock decreases, and economic growth is negatively affected.
-Human capital is enhanced, and economic growth is positively affected.
The law of demand says that, holding everything else constant, when the price of a good increases, the amount buyers buy will decrease, and when the price of a good decreases, the amount buyers buy will increase. To hold everything else constant means to use the ceteris paribus condition. If we change one of these things we were holding constant, which is the most likely result? -consumers will not change their purchasing behaviors -producers will not know how much of a good to make -a price ceiling will need to be implemented -demand for the good will either increase or decrease
-demand for the good will either increase or decrease
The U.S. Department of Education sponsors the i3 program (Investing in Innovation), which provides grants to educational institutions and schools that have a proven track record of high student achievement. This is an example of a government program designed to build: -human capital. -physical capital. -labor resources. -physical factories and plants.
-human capital.
If you see that inflation between last year and this year is 3%, this means that: -on average, prices went up across the economy by 3%. -economic growth is also 3%. -the consumer price index rose by 3% more than the producer price index. -the prices of each and every good and service went up by 3%.
-on average, prices went up across the economy by 3%.
For a firm making decisions about investment or research and development, what is the most important interest rate? -nominal interest rate -authentic interest rate -real interest rate -future interest rate Which statement is accurate? -The real interest rate plus the future interest rate is the nominal interest rate. -The real interest rate minus the nominal interest rate is the nominal interest rate. -The nominal interest rate plus the rate of inflation is the real interest rate. -The nominal interest rate minus the rate of inflation is the real interest rate.
-real interest rate -The nominal interest rate minus the rate of inflation is the real interest rate.
For each example listed, decide if the good is a normal good or an inferior good. Make sure you answer from the perspective of the individual or individuals doing the buying or consuming. 1. Billy's mom increases his weekly allowance by $55. As a result, Billy increases the number of apps he downloads on his smartphone. Smartphone apps are 2. Susan gets a 15 percent performance bonus at work. She can finally stop eating so many frozen pizzas and eat something more tasty. Frozen pizzas are 3. Mike is an appliance salesman. Refrigerator sales in his store have fallen and so has his commission. Mike decides to switch from name brand cereal to generic cereal. Generic cereal is 4. Hair stylist Molly loses a few of her clients. Molly cuts back on the number of smoothies she buys during the week. Smoothies are
1 a normal good 2 an inferior good 3 an inferior good 4 a normal good
Complete the sentences on the role of government in promoting economic growth. 1. The government's direct role in the production of physical capital is primarily focused on ------ 2. The government's direct role in creating human capital is primarily focused on------ 3. Governments play an indirect role in private savings and investment through--------
1. developing infrastructure. 2. improving the education system. 3. regulating the financial system.
Classify each statement according to whether it will increase the equilibrium level of human capital investments or decrease the equilibrium level of human capital investments. 1-Congress votes to double the amount of federally subsidized student loans. 2-There is a decrease in student learning capacities. 3-Suburban families see a decrease in wealth due to a particularly poor-performing stock market. 4-The president signs into law a bill that will reduce discrimination in the labor market. 5-The natural talents and abilities of graduating high school students rise.
1. increase 2. decrease 3. decrease 4. increase 5. increase
Question 4 of 15 - Quiz 3 4 of 15 Questions Assignment Score:63.3% Solution Solved Question 4 of 15 My Attempt Mother Nature produces dirt, Tlaloc turns the dirt into brick, and Bob creates brick houses. The economy is characterized by the table. Note all figures are measured in dollars. Mother Nature Tlaloc Bob Value of Sales ($)2,750 77,500 20,000 Dirt ($)02,7500Bricks ($)007,750Wages ($)1,000 3,700 10,000 Interest Payments ($)1,000 600 900 Rent ($)500 300 700 Profits ($)250 400 650 Total Expenditure ($)2,750 7,750 20,000 What is the value added for Bob? $3,750 $12,250 $2,750 $20,000
12,750
Consider the table below. Assuming the law of demand holds, the cell labeled "?" could be which of the following quantities? Price of a movieQuantity of movies Demanded $15 159 $17 ? A. 167 B. 175 C. 159 D. 147 E. 161
147
You are considering purchasing a car, and you are offered a loan with a nominal interest rate of 55%. Assume inflation is expected to average 22% over the life of the loan. What is the real interest rate?
3%
Consider the data shown in the table. Assume that the economy produces only barrels of oil. What is the growth rate of real GDP between the two years using last year as the base year? 5% 3.75% 9% 2.25%
3.75%
The accompanying graph contains the supply for knee braces. a. At $8 a brace, how many will be supplied? 4 million braces b. Suppose that March becomes known as National Marathon Month, where every major city will host a marathon. Shift the supply curve to show the impact of new firms entering the market. c. After news of National Marathon Month, at a price of $8, how many braces will be supplied?
4 million braces 6 million braces
The table shows consumer price index data for the United States. Based on this information, what is the rate of inflation in 1991? 1990 130.66 1991 136.17 1992 140.31 1993 144.48 1994 148.23 1995 152.38 A. 2.97% B. 2.79% C. 3.04% D. 4.22%
4.22%
Consider the data shown in the table. Assume that the economy produces only textbooks. What is the growth rate of real GDP between the two years using last year as the base year? 10% 15% 2.5% 5%
5%
Suppose that the graph illustrates the market demand for coffee per month with an equilibrium price of $3.00 and equilibrium quantity of 4,000 coffees. Please indicate on the graph the effects of a coupon that lowers the price by $2 and place point A at the new equilibrium. Price ($)Quantity (thousands)0123456780.01.02.03.04.05.06.0Demand5.31.0A What is the new quantity of coffee demanded? Enter your answer in thousands, specified to one decimal place. coffee demanded: thousandthousand
5.3
Please match the hypothetical scenarios with the correct type of good. -Pierre produces cheese in France and ships it to his sister living in Canada, who then sell sit in her local bakery. -In her capacity as an FBI agent, Jean purchases a new vehicle for use by the agency to track missing persons. -Wanda purchases six new sewing machines for her tailoring business, which she hopes will increase the number of custom alterations she can perform each week.
export goods and services government goods and services capital goods