Econ 101 Chapter 1
Economists often are interested in percentage change from one period to the next. The percentage rate of change of gross domestic product (GDP) is an important macroeconomic variable. If in 2010 GDP was $11,150 billion dollars, and GDP increased to $11 comma 578 billion in 2011, what is the growth rate of the U.S. economy in 2011? ___________% (Enter your response rounded to one decimal place.)
3.8%
The bar graph to the right illustrates hypothetical data for the market share for the United States automobile market. The percentage of the U.S. market that U.S. auto firms control is _______%. (Enter your response as an integer.)
40%
The pie chart to the right illustrates hypothetical data for the market share for the United States automobile market. The percentage of the U.S. market that U.S. auto firms control is _______% (Enter your response as an integer.)
50%
Refer to the graph on the right What percentage of the marbles are blue? _______% (Enter your response as a percent rounded to one decimal place.) What fraction of the marbles are yellow? StartFraction _______ EndFraction (Express your answer as a fraction. What fraction of the marbles are red? ________(Enter your response as a decimal rounded to two decimal places.)
6.4%; 21/78; 0.21
a _______ economy is an economy in which most economic decisions result from the interaction of buyers and sellers in markets but in which the government plays a significant role in the allocation of resources.
mixed
The diagram to the right illustrates a hypothetical demand curve representing the relationship between price (in dollars per unit) and quantity (in 1,000s of units per unit of time). The area of the triangle shown on the diagram is $_______. (Enter your response as an integer.)
$1,512,500
In your economics class, you scored a 62 on the first quiz, a 92 on the second quiz, and an 75 on the third quiz. Your average quiz grade is _________. (Enter your response rounded to one decimal place.) On the fourth quiz, you scored an 81. Did the fourth quiz raise your average? _________
76.3; yes
a market is a group of ______ of a good or service and the institution or arrangement by which they come together to trade
buyers and sellers
societies organize their economies in two main ways to answer the three questions of what, how, and who. a society can have a _____ economy in which the government decides how economic resources will be allocated. or a society can have a _____ economy in which the decisions of households and firms interacting in markets allocate economic resources.
centrally planned; market
______ decide(s) what goods and services will be produced.
consumers, firms, and government
_______ is the study of the choices people make to attain their goals, given their scarce resources.
economics
The diagram to the right illustrates a supply curve. As with all supply curves, this curve's slope is ______.
positive
________ is concerned with what is, and _______ is concerned with what ought to be. Economics is about ______, which measures the costs and benefits of different courses of action
positive analysis; normative analysis; positive analysis
the diagram to the right illustrates a very important relationship in economics between two variables: the price of a good and the quantity demanded of that good. the two variables in this diagram are:
price (dollars per bushel) on the vertical axis and quantity (bushels per week) on the horizontal axis.
________ occurs when a good or service is produced at the lowest possible cost. _______ occurs when production is in accordance with consumer preferences.
productive efficiency; allocative efficiency
one of the basic facts of life is that people must make choices as they try to attain their goals. this unavoidable fact comes from a reality an economist calls
scarcity
equity is
the fair distribution of economic benefits
opportunity cost is
the highest valued alternative that must be given up to engage in an activity
when the federal government crafts environmental policies that make it less expensive for firms to follow green initiatives,
the policies are consistent with economic incentives
macroeconomics is
the study of the economy as a whole, including topics such as inflation, unemployment, and economic growth
microsoft charges a price of $599 for a copy of windows 7. is this pricing decision rational?
when we assume the managers at Microsoft have used all available information and have weighed all known benefit and costs, we are assuming rationality.
Which of the following shows a negative linear relationship? (assume values of x greater than 0).
y = 31 - 3.8x
economics is a social science because
A. it considers human behavior long dash particularly decision-making behavior. B. it is based on studying the actions of individuals. C. it applies the scientific method to the study of the interactions among individuals. D. all of the above D
The diagram to the right shows a hypothetical demand curve for apples. The slope of this curve is negative ________. (Enter your response rounded to two decimal places. Include a minus sign if appropriate.)
-1.17
when we graph the relationship between two variables, we often want to draw conclusions about whether changes in one variable are causing changes in the other variable. doing so, however, can lead to incorrect conclusions. Reasons for drawing incorrect conclusions about cause and effect include
A. reverse causality. B. an omitted variable. C. both a and b. D. none of the above. C
which of the following covers the study of topics such as inflation or unemployment?
macroeconomics
in the diagram to the right, the curve labeled "S" is apparently ________, while the curve labeled "D" is apparently _______.
nonlinear; linear
The diagram to the right is an example of
a times-series graph
the diagram to the right illustrates a common economic relationship. Economists know this relationship as marginal cost (MC). The diagram illustrates the relationship between the change in total cost and quantity produced. There are three lines (A, B, and C) drawn tangent to the MC curve. At line A, the MC curve has a _____ slope. Where lines B and C touch the MC curve, the slope is _____ and _____.
negative; positive; increasing
trade-offs force society to make choices, particularly when answering the following three fundamental questions:
one, what goods and services will be produced? two, how will the goods and services be produced? three, who will receive the goods and services produced?
the diagram to the right illustrates a hypothetical demand curve representing the relationship between price (in dollars per unit) and quantity (in 1,000s of units per unit of time). total revenue is $_____ (Enter your response as an integer.)
$2025
any model is based on making assumptions because
A. models have to be simplified to be useful. B. we cannot analyze an economic issue unless we reduce its complexity. C. both a and b. D. neither a nor b. C
microeconomics is the study of
how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices
in the United States, who receives the goods and services produced depends largely on _____
how income is distributed
firms choose how to produce the goods and services they sell. in many cases, firms face a trade-off between using more workers or using more machines. for example,
many times in the past several decades, firms may have chosen between a production method in the united states that uses fewer workers and more machines and a production method in china that uses more workers and fewer machines
economists use the word marginal to mean an extra or additional benefit or cost of a decision. an optimal decision occurs when
marginal benefit equals marginal cost
a hypothesis in an economic model is
A. a statement that may be either correct or incorrect about an economic variable. B. tested before it can be accepted (or not rejected). C. usually about a causal relationship. D. all of the above. D
the diagram to the right represents a demand curve for apples. the original demand curve is D1. If a factor other than price which affects demand changes, causing demand to decrease, the resultant demand curve is represented by Upper ______.
D3
