ECON 201

False

T/F: the difference in productivity between American and Indian janitors is intrinsic, so an American janitor transported to India would be as productive in India as he is in the US

False

T/F: the gains from tariffs to domestic producers exceed the losses to consumers

False

T/F: the general public tends to be highly informed about national political issues

True

T/F: the interest rate is determined by supply and demand in the market for loanable funds

False

T/F: the prospect of a loss encouraged firms to take too much risk

True

T/F: the value added for a computer chip comes from its design, not its manufacture

True

T/F: the value of a dollar is determined in part by how long you have to wait to get it

True

T/F: there is a correlation between a countries education and it's standard of living

True

T/F: trust is important to effective and efficient financial intermediation

False

T/F: two countries with very different institutions are likely to converge on the same output levels

False

T/F: unlike physical capital, human capital does not depreciate

False

T/F: weavers were grateful for the innovations introduced by John Kay, inventor of the flying shuttle

True

T/F: when the government decides to borrow money, the demand for loanable funds increases and the interest rate does, too

True

T/F: when the money cost is fixed because of a price control, people will "bid" up the price by waiting in line

True

T/F: with a reduction in tariffs, there will be fewer jobs in import-competing industries

True

T/F: without market prices, there is no easy or agreed upon way to count the value of things like polar bears

False

T/F: workers will be willing to accept lower wages to reduce risks they don't know about

True

T/F: you buy a hot dog at a Samford baseball game. The hot dog is counted as part of US GDP

$20

Taco Bell buys $5 worth of meat, $1 worth of cheese, $2 worth of lettuce, and $3 worth of tortillas to make tacos they will sell for $20. Assume that everything is made in the US. What does all this activity contribute to GDP?

Bad, good, bad

Tariffs are _______ for consumers, ___________ for domestic producers, and _________ overall

Wastes resources

Tariffs divert production from low-cost (world) producers to high-cost (domestic) producers which

Deadweight loss

Tariffs increase prices to consumers so domestic consumption falls, creating a

Lower supply

Tariffs on cherries will lead to a _________________ of cherry pies

The benefits are concentrated and the costs are dispersed

Tariffs on forestry products are very difficult to repeal because

Deadweight loss, from consumers to producers, from consumers to the government

Tariffs transfer resources in 4 directions. Which of these is one of those directions?

Tariff

Tax on imports

the mind

The "ultimate resource" is

Concentrated benefits and dispersed costs

The California Psychological Association devoted a lot of resources to supporting Assembly Bill No. 5, which exempted psychologist from the provisions established in the Dynamex Operations West, Inc. v Superior Court of Los Angeles decision. Meanwhile, most California voters know next to nothing about the bill and it's provisions. This is an example of

3

The Frying Dutchman is selling fish filets. You can get one for $7.00, two for $12.00, and three for $15.00. You value the first filet at $10.00, the second at $7.00, and the third at $5.00. How many fish filets should you order?

Satisfying as many wants as possible given limited means

The Great Economic Problem is

Lower

The Occupational Safety and Health Administration issues detailed regulations on workplace safety. Holding everything else constant, we expect these increases in workplace safety to lead to ____________ wages

Price change

The _________________ transmits information about the tin mine collapse to producers and consumers around the world

Marginal product of capital

The additional output we get from adding an additional unit of capital is the

Will be used for something else

The best alternative use of an apartment is worth $601. It is worth $599 as an apartment to a prospective renter. At an equilibrium price of $600 per month, the apartment

Decrease gains from trade

The best alternative use of an apartment is worth $601. It is worth $599 as an apartment to a prospective renter. Using it as an apartment would

You almost certainly cannot beat the market over the long run.

The best way to beat the stock market is

They get paid for it and it is in their interest to do so

The butcher, the baker, and the brewer are willing to work for you because

Transaction cost

The cost of finding potential trading partners is a

4 times

The countries of Frugal and Prodigal have the same per-capita income. The economy of Frugal grows at a rate of 4% per year while the economy of Prodigal grows at a rate of 2% per year. In 70 years, Frugal's income per capita will be _______________________________________ greater than Prodigal's.

Increase

The development of new kind of fusion reactor that produced cheap, nearly-limitless energy would ________________ an economy's steady state output

Grown

The difference between the earnings of college graduates and high school graduates has _______ over time

Import

The difference between what gets produced domestically and what gets consumed domestically is what we

7 days

The number of COVID-19 cases in the world grew by 9%, March 23-24, to 441,337. If the daily growth rate of COVID-19 cases is 9%, then the number of COVID cases in the world will double about every

Fallen, fall

The number of people in extreme poverty has _____________ since 1990. It is projected to ______________ between now and 2030

Lower than

The number of people who die each year in natural disasters is ________________ it was in the 1930s

Agenda setter

The person who chooses the order in which the voting takes place

Faster than

The poorer OECD countries in 1960 grew ______________ the countries that were richer in 1960

Price

The present value of the future income or satisfaction an object will produce

Not allowed

The price control means that some buyers and sellers are __________ to make some mutually beneficial trades

It falls

The price of peanut butter rises. Holding everything else constant, what happens to the demand for jelly?

It rises

The price of strawberries rises. Holding everything else constant, what happens to the demand for grape jelly?

It falls

The price of strawberries rises. Holding everything else constant, what happens to the supply of strawberry jelly?

Interest rate

The price people pay to use others' money is the

free rider problem

The problem faced by unions and other groups when people do not join because they can benefit from the group's activities without officially joining. The bigger the group, the more serious the problem.

More skills the labor market rewards

The residents of high income countries tend to have _____________ as/than the residents of low income countries

total consumer surplus

The sum of consumer surplus of all buyers. Measured by area below the demand curve and above the price

Marginal cost

The supply curve represents the ____________ for a given unit

Signaling

The temptation to cheat in Econ 201 is evidence that the returns to schooling are primarily returns to

Production

The true measure of economic progress is

Open and competitive markets, political stability, honest government, dependable legal system, property rights

The ultimate causes of economic growth include

73 1,000,000/(1+.1)^100

The value of $1,000,000 one hundred years from today at an interest rate of 10% is

the discounted present value of future payments

The value of a stock or bond is

Real GDP

The value of all finished goods and services valued at constant prices

Nominal GDP

The value of all finished goods and services valued at current prices

Present value

The value today of an amount of money in the future. Present value of future amount is less than the actual future amount

Wasting resources

The website AdamSmithWorks recently posted this picture of a "Yarn Pirate" in connection with one of their stories. From the perspective of society as a whole, someone who devotes his life to stealing yarn is

People would have an incentive to move water from Alabama to Texas

The winter storm in Texas means that fresh, clean water is in short supply. If the price were allowed to rise,

Make Work Bias

The world is filled with people who think that employment and not production is the point of economic activity

Baptists and Bootleggers

There are always 2 groups that support regulations and desire the same outcome. Baptists support for moral/ethical reasons. Bootleggers support because they cut down on competition because it increases their profits

socialist

There are shortages and no signals of what to produce in ______________ systems

Dispersed, concentrated

There is a NY Cheese Manufacturers' Association. There is not a NY Cheese Consumers' Association. This is because of _________________ costs and _________________ benefits

They disappear: they are gains from trade that would have been realized, but quantity supplied has fallen

What happens to the areas q and d (that represent deadweight loss) as a result of the price ceiling?

Hours of labor demanded equals hours of labor supplied

What is true at equilibrium in the market for labor?

Losses

What tells firms when they are using resources wastefully?

Saved, invested, capital

What we don't consume can be ________________ and _______________ in new ________________

Fiscal

When Congress uses their power to tax and spend to address business cycles, they are conducting ___________ policy

Equilibrium, not change

When QD is equal to QS, there is a _____________ and the price will ____________

reducing transaction costs

When a bank makes it easier for borrowers and lenders to cooperate, they are

The buyer gets gas and the seller gets money with which to buy goods and services

When a buyer pays for gas with cash, what happens?

Voting with your feet

When city and state policies influence where you choose to live, you are

Laws and regulations

When economists talk about institutions, they mean

equals

When investment __________________ depreciation, the economy is in steady state in the Solow growth model.

The other options are incorrect

When investment equals depreciation, the capital stock _________________ and output _________________

Steady state

When investment is equal to depreciation, we have reached the ______________ level of capital

The capital stock will grow and output will grow

When investment is greater than depreciation,

Grows

When investment is greater than depreciation, the capital stock

Shrinks

When investment is lower than depreciation, the capital stock

Shrinks, shrinks

When investment is lower than depreciation, the capital stock _________________ and output _________________

Lose money

When investments fail, lenders

Deadweight Loss

When mutually profitable gains from trade are not fully exploited, we have lost consumer and producer surplus

They have incentives to improve their property and use it to produce income

When people have secure property rights,

Fall

When the government enters the market and borrows money, private consumption and investment

Quantity supplied exceeds quantity demanded

When there is a price floor,

will create value but will not be counted in GDP

When we go out of town this summer, we are thinking about paying one of the kids from the neighborhood to check on our dog every so often instead of sending her to a kennel. These services ________________________________.

This is a value-creating service that isn't counted in GDP

When we lived in Memphis, we occasionally paid one of my students to babysit the kids. Which statement is true?

Voting with your feet

When you decide which products to buy and which church to join, you are

Non rivalrous

You can take this quiz without worrying that your classmates will use up all the knowledge of the Solow Growth Model before you're finished. This is because this knowledge is

not do anything

You check your text messages after a long day of classes. You see a three-hour-old text from your roommate telling you that the Wall Street Journal reported in the morning that VaxCo's new Covid-19 vaccine has been approved and will be ready for distribution in a month. You should _______________________________________ because of this information.

Superfluous discovery of a new production method

In response to high sugar tariffs and import restrictions, American soft drink manufacturers substituted high fructose corn syrup for actual sugar. This represents

Depreciation

fraction of the capital stock that wears out every year

increase output by less than the ninth unit of capital did

According to the version of the Solow growth model we have developed so far, a society's tenth unit of capital will _________________________________.

Import

According to the video, the US would likely _____________ all of its sugar with free trade in sugar

3

According to the video, the average sugar farmer made about _____________ million more dollars per year because of the quota

Attitudes

According to the video, the major force driving the explosion of innovation was a change in

The US economy has grown consistently over a long period

According to the video, the most basic reason the US is wealthy today is that

Failing to think at the margin

Actor Dwayne "The Rock" Johnson earned $87.5 million in 2020. Someone pointing at lower teachers salaries and saying "it's sick that our society values entertainment so much and education so little" is

$250 (30x10=300; 5x10=50; 300-50=250)

In response to nasty weather, the state of Alabama activates rules that will prosecute "price gouging." Suppose Bob values his time at $25.00 per hour. He is willing to pay $30.00 per gallon for 10 gallons of gas, but the legal maximum price is $5.00 per gallon. What is the value of the time he would be willing to spend waiting in line for gas?

Decrease

If the global market for tomatoes is competitive, a tariff on tomatoes produced in foreign countries will ______________ American standards of living

a shortage in the loanable funds market

If the government passes a law limiting the interest rates financial intermediaries, it will create

$990 1000/1+.01

If the interest rate is 1%, then the present value of $1000 one year from today is

$980 1000/1+.02

If the interest rate is 2%, then the present value of $1000 one year from today is

Fall

If the marginal cost of a pound of cherries is $4 and the marginal value is $3, then standards of living would _____________ if that pound of cherries were produced

Demand, fall

If the marginal product of labor falls, ________________ of/for labor will _____________

rises, rise

If the marginal product of labor rises, the demand for labor ______________________________________ and wages will ____________________________________.

Reduce the supply of gas in Alabama and increase the supply of gas in Louisiana

If the price of gas is Louisiana is higher than the price of gas in Alabama, people will have an incentive to

Rises, fall

If the supply curve for loanable funds shifts to the left, then the equilibrium interest rate will ________________ and the equilibrium quantity will ________________

Is less than, fall

If the wage exceeds the equilibrium wage, the amount of labor demanded ____________ the amount of labor supplied and the wage will ____________

Rises

If the world price is lower than the domestic price, then domestic consumption __________________ if we move to free trade

Fall

If the world price is lower than the domestic price, then domestic production will ___________ if we move to free trade

lower-income

If two countries have the same steady state, the _______________________ country will grow faster.

Falls

If we add more labor, the marginal product of labor

Reduce

If wine and cheese are complements, higher cheese prices will ______________ demand for wine

Other workers for the ability to cooperate with labor demanders

If you are a worker in the labor market, you are competing with

A quantity that has not been adjusted for inflation

If you are reading about nominal GDP, you are reading about

$190

If you are willing to pay $200 for a ticket to see the new Avengers movie and are able to buy a ticket for $10, then your consumer surplus is

Low

If you are willing to wait for something, then you have ________________ time preference

the capital stock and output will fall until they reach the steady state

If you begin at a capital stock that is greater than K*,

Does not change

If you buy meth behind a gas station, GDP _______________ as a result of the transaction

Fewer

If you had to marry the next person with whom you went on a date, you would likely go on ______________ dates

part owner of Google and entitled to a share of Google's profits

If you own a share of stock in Google, then you are

entitles you to a portion of Nike's profits

If you own a share of stock in Nike, this

High

If you prefer satisfaction right now, then you have ________________ time preference

$300,000

If you sell 10 cars made in 2018 for $30,000 each, the contribution to 2018 GDP is

Wasted producing fish that would have been cheaper to buy abroad

Import restrictions and tariffs make it more expensive for Americans to import seafood from southeast Asia. According to your grandmother this is a very good thing because the restrictions lead to a larger American seafood industry. You know, however, that some of the labor, capital, land, and other resources being used to produce catfish in the United States are

50

In 1900, the average lifespan in the world was less than ____________ years

Offering more luxurious accommodations, fancier meals

In response to rate regulation under the Civil Aeronautics Board, airlines competed with one another by

Americans are allowed to trade with anyone in the world

In light of what we have learned over the last several meetings, gains from trade accruing to Americans are highest when

Less likely

In modern times, someone is ________________ to be killed by another person than in previous generations

Less productive than

In old age, you are likely to be ________________ you are in middle age

Rule of 72

Rule that tells how long it takes your money to double if it is invested at compound interest. How long it'll take for money at 5% interest rate to double: 72/5=14.4 years

Property rights

Rules that define who owns what and under what circumstances are

Both Americans and Salvadorans

Salvadoran immigration to the US raises the standards of living of

Have no meaningful effect on public policy

Sandy spends an entire semester staying up late every night and learning the subtleties and nuances of cherry marketing regulations in order to be able to cast the very best possible vote he can. His informed vote will likely

catching-up growth

growth due to capital accumulation. Usually poor countries that grow fast in the beginning as they accumulate capital but eventually slow down

cutting edge growth

growth due to new ideas. Wealthier countries

True

T/F: if the cost of improving safety is lower than the additional wages a firm will have to pay to get people to do riskier jobs, then a firm has an incentive to improve job safety

True

T/F: if the maximum price a consumer is willing to pay is greater than the minimum price a seller is willing to accept, then there is an opportunity to gain from trade

False

T/F: if two countries have the same real GDP per capita, then they have the same fraction of their population living in extreme poverty

False

T/F: if we stop importing goods from countries where child labor is common, child labor will stop

True

T/F: if you are not allowed to pay with money, you can "pay" by waiting in line

False

T/F: if you become better informed, you will likely improve public policy considerably

False

T/F: if you take one penny from each of one million people, it is likely that those from whom the penny is taken will notice and object strenuously

True

T/F: imitation is cheaper than innovation

True

T/F: in competitive and open markets, farmers have incentives to innovate, invest, and grow their business

True

T/F: in definitions of GDP, we will use "final goods and services" and "finished goods and services" interchangeably.

True

T/F: in practice, "Gross Domestic Income" and "Gross Domestic Product" differ ever so slightly

True

T/F: in steady state, all of our investment goes to repair and replace existing capital

False

T/F: in the US, it is legal to sell a kidney for money

True

T/F: in the early 21st century, for the first time economic growth extended to most parts of the world

True

T/F: in the long run, rent control will make housing shortages worse than they are in the short run

False

T/F: in the mid 1980s, many economists foresaw a future in which economic students could take courses remotely and access enormous numbers of videos and other educational resources for which they would not have to pay extra

True

T/F: in the short run, it is hard to change the stock of available housing

True

T/F: in theory, "Gross Domestic Income" and "Gross Domestic Product" are exactly equal

False

T/F: international trade reduces the number of jobs in the US

False

T/F: it is a bad thing that the US is losing its leadership in the production of new ideas

False

T/F: it is easy to profit from fundamental new ideas about reality

False

T/F: it is impossible for a country to have too much education

True

T/F: it is possible that the production of ideas per hour can have increasing marginal returns

True

T/F: it likely makes sense to borrow money to open a store because that store can start generating value very soon

True

T/F: janitorial services in the US are more valuable because American offices are more productive than Indian offices

True

T/F: losses are important because they encourage people to take prudent risks

True

T/F: losses are important because they tell people when they have made poor business decisions

True

T/F: owners of "coupon bonds" receive regular payments

True

T/F: patents give innovators a temporary monopoly on their ideas

True

T/F: patents mean ideas don't spread as far and wide as they could, and they sometimes prevent people from building on others' new ideas

True

T/F: people who go to college earn more than people who don't

False

T/F: politicized lending means loanable funds go to their highest valued uses

True

T/F: profits and losses are the incentives that encourage people to respond to the information created by the price system

False

T/F: prosperity in wealthy countries like the US, Canada, and France was made possibly by exploitation and poverty in poor countries like Bangladesh, Nigeria, Haiti, and Guatemala

False

T/F: rent control means apartments are allocated to the people who value them most

False

T/F: rising domestic production as a result of a tariff makes Americans better off

True

T/F: saving is one way to insure against job loss or large, unexpected expenses

True

T/F: savings are turned into investment when new shares of stock are sold

True

T/F: schooling is a form of investment, much like building a factory or buying tools

True

T/F: since the costs of becoming informed generally exceed the benefits, it is rational to be ignorant about politics

True

T/F: some loans are riskier than others, which is why rates of return differ

True

T/F: someone who buys a corporate bond is lending money to a company directly

True

T/F: standards of living in poor countries can catch up to standards of living in rich countries in a generation or two if the growth rate increases substantially

True

T/F: stocks are riskier than bonds, which is why stock return tends to be higher

False

T/F: strategic trade protection is a good idea even if other countries can retaliate

True

T/F: the "Baptist" ensures that a prohibition on Sunday alcohol sales is enforced and benefits by seeing at least one day on which alcohol sales are illegal

False

T/F: the "Bootleggers and Baptists" theory of regulation explains why existing polluters and environmentalists always have conflicting interests

True

T/F: the "bootlegger" profits from prohibitions on Sunday alcohol sales

True

T/F: the 1970s price controls reduced the size of 2x4 lumber

True

T/F: the Federal Reserve influences interest rates by changing the amount of money in the economy

capitalism

"Voluntary trade of private property and free labor in a free market governed by the rule of law and an ethical consensus" describes

Important Demand Shifters

1. Income 2. Population 3. Price of Substitutes 4. Price of Complements 5. Expectations 6. Tastes

Effects of Price Ceilings

1. Shortages 2. Reductions in product quality 3. Wasteful lines and other search costs 4. A loss of gains from trade 5. A misallocation of resources

Recession

2 consecutive quarters of declining GDP are considered a

Lose

5 voters are aligned along a spectrum ranging from "silly" to "sensible" as follows: Skeletor (most silly), Trapjaw, She-RA, Man-At-Arms, He-Man (most sensible). According to the median voter theorem, a candidate who adopts He-Man's preferred policies will ___________ a majority rule election

$20 million

A $10 per pair tariff on sneakers increases American sneaker production from 2 million to 4 million pairs and decreases American sneaker consumption from 8 million to 6 million pairs. How much revenue does the government raise?

$70 million

A $10 per pair tariff on sneakers increases American sneaker production from 2 million to 4 million pairs and decreases American sneaker consumption from 8 million to 6 million pairs. What do consumers lose?

Subsidy

A __________ is equivalent to a decrease in the firms costs and therefore increases supply

$75

A bad storm triggers price controls on gas. Brian spends three hours waiting in line to buy ten gallons of gas for $3 per gallon. If he values his time at $15 per hour, what did the ten gallons of gas cost him?

borrowing from savers and lending to people who wish to invest and consume

A bank earns profits by ___________________________.

a reward for successfully coordinating borrowers and lenders

A bank's profits are

Created a shortage and encouraged people to waste resources by spending time as well as money

A binding price ceiling in the market for rental housing

Higher, lower

A binding price ceiling in the market for rental housing will cause _______________ quantity demanded and _____________ quantity supplied

Surplus

A binding price floor in the market for mangoes will create a ______________ of mangoes

Loss

A business that earns a ________________ is wasting resources

Propose policies that appeal to the median voter

A candidate who wishes to maximize her chances of winning an election would be wise to

Exports

A country pays for imports with its

Catching up

A country that is growing by adding capital is engaged in __________________ growth

Lower wages

A decrease in demand for labor combined with an increase in the supply of labor will lead to

Reduce, reduce

A decrease in the demand for labor will __________ wages and ____________ the number of labor hours hired

The other options are incorrect

A decrease in the supply of labor combined with a decrease in demand for labor will necessarily ____________ wages and ____________ the number of labor hours hired

Increase, reduce

A decrease in the supply of labor will _____________ wages and _____________ the number of labor hours hired

Are counted in US GDP

A few years ago, my wife and I stopped homeschooling and sent our kids to a nearby private school. Our tuition payments to the school

high time preference

A few years ago, pop star Ke$ha exhorted her listeners to "make the most of the night like we're gonna die young." This is an example of

The value of the marginal product is greater than the wage

A firm will continue to hire labor as long as

Greater incentives to invest in energy R&D

A higher price of oil means

Shortage

A law mandating a price that is below the equilibrium price will lead to a

their incentives encourage them to do so

A lot of US companies have stopped selling at-home COVID-19 tests in response to pressure from the FDA. This is probably going to end up harming a lot of people. The FDA is restricting innovation in the response to COVID-19 because

reduce

A lower saving rate will ______________________________________________ steady-state output.

Price Floor

A minimum price allowed by law. Example: minimum wage

Higher quantity supplied but lower quantity demanded

A minimum wage that is above the equilibrium wage will lead to

Not be produced at all

A pound of cherries is worth $1 to consumers. It costs $1.50 to produce it in the United States and $2.00 to produce it in Turkey. That pound of cherries should

Produce them elsewhere in the world

A pound of strawberries cost $3.60 to produce in the United States. It could be bought on the world market for $3.50. The most efficient way to get the strawberries is to

Produce them in the United States

A pound of strawberries costs $3.10 to produce in the United States. It could be bought on the world market for $3.50. The most efficient way to get the strawberries is to

Increases, reduces

A price ceiling ___________ quantity demanded and ___________ quantity supplied

Decreases

A price ceiling ____________ the number of units exchanged

Consumer and producer surplus

A price ceiling reduces

Decreases, increases

A price floor _______________ quantity demanded and _______________ quantity supplied

Wasted resources

A result of a 25 cent cheese tariff, new dairy farms pop up across America. In light of what you know about the effects of tariffs, these new dairy farms represent

Pessimistic Bias

A tendency to overestimate the severity of economic problems and underestimate the recent past, present, and future economy. Reading newspapers and watching the evening news gives you a very misleading picture of what the world is actually like

Paid all at once upon maturity

A zero coupon bond is

Irrational

According to Anthony Downs, voting is

Popular

According to Bryan Caplan, policies that almost all economists would condemn are

Liberty, dignity

According to Deirdre McCloskey, ______________ and ____________ for innovators explain how people in some places got very rich.

law, legislation

According to F.A. Hayek, the term ____________________________________ describes evolved rules that govern our behavior and the term ________________________________ describes created rules that govern our behavior.

No change in unemployment because the taxpayers would spend their money on other things and the soldiers would find new jobs

According to Frederic Bastiat, military demobilization would lead to

Unlawful

According to Thomas Aquinas, it is ___________ to sell a product at a price greater than its cost

Better off, better off

According to most economists, immigration makes Americans _______________ and foreigners _____________ on net

Substitute white labor for Asian female labor

According to recently-released data from the Bureau of Labor Statistics, median weekly earnings for Asian women aged 16 and over was $1091 while median earnings for whites of both genders aged 16 and over was $1,007. Suppose that the entire gap is explained by a "taste for discrimination": some employers prefer Asian female workers to white workers of any gender. How could a profit-obsessed firm increase its profits based on this information?

Save

According to the lifecycle theory of saving, someone who is in her prime earning years will

Insufficient information to answer this question. Need the information about prices

An additional bushel of corn should be used to make

Triangulation

Areas with access to navigable waterways have an easier time finding trading partners - hence, the cost of _____________ is lower

Worse off

As a result of the tariff, American producers now make a pound of cheese that costs them $3.60 to produce and sell it for $3.75. American consumers would have been able to get for $3.50 with free trade. On net, Americans are

Decrease

As countries get richer and more productive, child labor tends to

Declines

As countries get richer, child labor

50 million, 25 million

As of the publication of the video, the population of South Korea was about _______________ and the population of North Korea was about ________________

$18.9 trillion

As of this writing, here are the most recent observations for GDP: Consumption: $13 trillion Investment: $3.5 trillion Government expenditures: $3.5 trillion Exports: $2.3 trillion Imports: $3.4 trillion What is GDP?

$100 (20x5)

As part of an ongoing effort to "Make America Great Again," President Stilton Manchego has proposed a $5 per ton tariff on imported cheese. You estimate that the tariff will increase American cheese production from 100 to 120 tons and will cut American cheese consumption from 220 to 200 tons. What is the lost consumer surplus?

more

As people get richer and population increases, we can expect _____________________ researchers as a percentage of the population.

Higher

As population grows and gets richer, we can expect a _________________ number of researchers per 1000 people

Rise

As populations age and people choose to save less, interest rates will

Less

As the interest rate rises, people borrow

More

As the interest rate rises, people save

Less, more

As wages fall, people will supply ________ labor and demand ________ labor.

More, less

As wages rise, people will supply ________ labor and demand _________ labor.

Increase, decreasing

As we increase the amount of capital, output will __________________ at a ________________ rate

American standards of living will return to their prewar level

Assume the Solow growth model accurately describes the US economy. The US enters a war with a country that promises to bomb us back to the stone age and, indeed, bombs the country so completely that it seems like no stone is left upon another. Assume institutions, technological possibilities, the saving rate, and the depreciation rate remain unchanged: what does the Solow growth model predict about what will happen to American standards of living?

>, rise

Assume there is no minimum wage or other intervention in the labor market. At a wage that is below the equilibrium wage, Nd ___________ Ns and wages will ___________

lower demand for air travel

Assuming the world returns to normal, I'm presenting a personal finance workshop for high school students in Portland, Oregon on May 15. When I first looked at flights a few weeks ago, they were very expensive. When I booked the flight on March 18, it was a lot cheaper and a lot of airlines have cut back on service. My ticket came with a guarantee that I could change the flight without incurring a change fee. In light of the COVID-19 pandemic, this was most likely due to

Insufficient information to answer the question

At Short Jack Gold's fast food fish restaurant, you can buy two fish filets for $5 or three fish filets for $6. Which is the better deal?

1917

At a growth rate of 3% per year since 1800, the US economy would have reached today's living standards in

23.3

At a growth rate of 3%, GDP per capita in a country will double every _____________ years

Fewer

At a minimum wage that is higher than the equilibrium wage, workers can expect to receive ________________ non-wage benefits

Obtain signals that are privately beneficial but socially wasteful

At a minimum wage that is higher than the equilibrium wage, workers have an incentive to

3

At a wage of $15 per hour, how many hours of labor will be demanded? Value of Marginal Product: Hour 1: $20 Hour 2: $18 Hour 3: $16 Hour 4: $14 Hour 5: $12

Below, shortage

At a wage that is _______________ the equilibrium wage, the amount of labor demanded is greater than the amount of labor supplied and there is a _______________

<, fall

At a wage that is above the equilibrium wage, Nd _________ Ns and wages will _____________. Assume there is no minimum wage

>, rise

At a wage that is below the equilibrium wage, Nd ___________ Ns and wages will ___________

depreciation exceeds investment and the economy shrinks

At any capital stock above K*, which statement is true?

investment exceeds depreciation and the economy grows

At any capital stock below K*, which statement is true?

2159

At current growth rates, US per capita GDP will reach $893,000 in

1. all mutually beneficial exchanges happen 2. Quantity supplied equals quantity demanded 3. Goods and services are supplied by the lowest-cost producers 4. Goods and services are consumed by the highest value demanders

At equilibrium ......

Total surplus

At equilibrium in a competitive market, ______________ is maximized

The lowest cost producers

At equilibrium in a competitive market, goods and services are supplied by

All gains from trade are realized, goods are produced by the lowest cost producers

At equilibrium in a competitive market, which statement is true?

more, less

At lower interest rates, some people wish to borrow ___________________ and some people will wish to save ____________________.

More, fewer

At lower wages, firms will demand _____________ hours of labor and workers will be willing to supply __________ hours of labor

is just sufficient to replace worn-out capital

At steady state, investment _____________________________.

Brazilian teenagers go to Disney World

At the end of class on Wednesday, we decided that free trade is awesome because

Total surplus

At the equilibrium price and quantity in a free market, ______________ is maximized

Constant

At the steady state level of capital, output is

They fall

Authorities have placed a price ceiling of $400 per month on studio apartments in Birmingham. The graph below shows what happens. What ultimately happens to gains from trade that go to consumers as a result of the price ceiling?

Deadweight loss

"Brian finally acquired enough skills to be employable at $7.25 per hour, but the president wants to raise minimum wage to $9.00 per hour." If this were to happen, Bad Luck Brian's inability to find a job would be an example of

Deadweight loss

"Employable at $7.24/hour. Minimum wage $7.25." What does the problem facing Bad Luck Brian represent?

A higher price for Colombian coffee

Bad weather and crop damage in Colombian coffee will lead to

1800

Bangladesh and Uganda have a real GDP per capita today that is comparable to what the US had in

YouTube didn't exist

Before 2005, you would not have been able to watch the videos for this course on YouTube because

8

Beginning in about 1950, Japan began doubling living standards about every ____________ years

Landlocked

Being ________________ is like a natural tariff - a natural tax on trade

Fell

Between 1940 and 2000, tariffs worldwide

$10 million

Bo grows trees, which he harvests and sells of Luke for $2 million. Like turns the trees into pulp, which he sells to Roscoe for $3 million. Roscoe uses the wood pulp to make paper, which he sells to Office Depot for $5 million. Office Depot sells the paper to college students for $10 million. The entire process contributes ________________ to GDP

No, because the potatoes are an intermediate good

CFA buys potatoes that will eventually be sold as waffle fries. Their purchase of the potatoes is counted as GDP

1920

China has a real GDP per capita comparable to the US in

Increases

Declines in real GDP tend to be accompanied by _______________ in unemployment

Marginal product of labor

Demand for labor is determined by the

10

Each American only pays about ____________ dollars per year because sugar is more expensive

A smaller increase

Each successive unit of capital provides us with ___________________ output compared to the unit of capital before it

Is not counted in GDP

Earl does odd jobs for his neighbors to earn extra money. The value of his output

Mass starvation

Farm collectivization in China led to

Reduce

Financial intermediaries _________________ transaction costs

Increase

French labor market regulations making it very costly to fire workers will ______________ unemployment in France

$893,000

Had real per capita GDP in the US grown at 3% per year since 1800, it would have been $____________ when the video was produced

Solving problems

In a competitive market, firms earn profits by

supply and demand

Interest rates are determined by

High time preference

Living for the moment with little thought for tomorrow. You want the result and you want it now. More reckless

Increases gains from trade, on net

Moving from no trade to free trade

Wastes

Moving sugar production from Brazil to Florida in response to a tariff ___________ resources

This is a value creating service that isn't counted in GDP

My mother-in-law recently retired and will watch her new grandson for my brother-in-law and sister-in-law during the week while they are at work. Which statement is true?

Increase output per worker

New ideas and technology

Converge

Output in countries with the same steady state tend to _____________ over time

Large

Small changes in growth rates have ______________ effects over time

large

Small differences in growth rates have ___________________________________________ effects over long periods of time.

High

Smoking and drug use are indicators of ________________ time preference

high time preference

Someone who wants to consume right now has

$2

Suppose a buyer is willing to pay $3 for a gallon of gas but is only allowed to pay $1 in money. What is the value of the time he is willing to spread waiting in line for a gallon of gas?

decrease, increase

Suppose people get more patient and decide to save more. This will _____________________ the equilibrium interest rate and ____________________ the equilibrium amount of investment.

"What's 'social media'?"

Suppose that upon graduation from college in 2001, your professor said to his family "I'm going to be a social media strategist." The most likely response would have been

True

T/F: A company's bond rating helps determine how much it pays in interest for loans

True

T/F: A higher saving rate will increase investment relative to depreciation and cause the capital stock to grow

True

T/F: According to economists' estimates, you are more likely to die in an auto accident driving to the polls than to cast the decisive vote in a major natural election

More

T/F: According to the economic logic of politics, governments will tend to spend ___________ money than the average voter wants

False

T/F: Falling domestic consumption as a result of a tariff makes Americans better off

False

T/F: Farmers who get farm subsidies have very weak incentives to know which politicians support farm subsidies

False

T/F: Price ceilings increase gains from trade

True

T/F: Price ceilings reduce the effectiveness of the "signal wrapped in an incentive" function of prices

False

T/F: Price controls in the 1970s increased people's incentive to move heating oil from relatively low-value uses (warming swimming pools in California) to relatively high-value uses (warming people in New Hampshire) by placing a check on greed

False

T/F: Real GDP per capita accounts for the distribution of income

True

T/F: Real GDP removed the effects of price changes

True

T/F: Rent control makes it easier for landlords to discriminate against prospective tenants

False

T/F: Service improves when prices are held below the equilibrium price

True

T/F: The "no trade equilibrium" is where domestic quantity demanded equals domestic quantity supplied

False

T/F: a Republican candidate who stakes out an extreme right-wing position will increase her chance of winning an election

True

T/F: a borrower is paying for the right to use other people's money right now

True

T/F: a capital good is a good that is used to produce another good

True

T/F: a new machine that turns corn into cars would make Americans better off, on net

False

T/F: a price ceiling on heating oil encourages entrepreneurs to bring heating oil from where it has low value to where it has high value

True

T/F: a rising price in the market for tin induces people to behave as if they knew a tin mine had collapsed

True

T/F: a share of stock in Walmart entitles you to a share of Walmart's profits

False

T/F: a student from Australia buys a hot dog at a Samford baseball game. The hot dog is counted in Australian GDP

True

T/F: according to the Bootleggers and Baptists theory of regulation, environmentalist perhaps unwittingly help organize existing polluters into a cartel in forest by the EPA

True

T/F: according to the efficient markets hypothesis, all publicly available information is already reflected in the price of an asset

True

T/F: for all practical purposes, foreign trade is a kind of technology

False

T/F: for his senior project in high school, one of your professor's classmates restored a vintage tractor to prime working condition. When he sold the tractor, it was counted in GDP

True

T/F: from the human point of view, trade is better than technology

False

T/F: if we eliminated US sugar tariffs, Florida sugar growers would all starve to death

True

T/F: in a free market, higher prices of heating oil in New England will give entrepreneurs an incentive to bring oil from where it has low value (west coast) to where it has high value (New England)

True

T/F: large groups have trouble focusing power

True

T/F: larger populations mean more ideas

True

T/F: on average, the US has a comparative advantage in high skill labor

False

T/F: since you won't be around to enjoy it, it makes no sense to plant trees that won't grow to maturity for 100 years

True

T/F: waiting in line is a cost

False

T/F: your grandmothers Social Security check is reflected in the "government purchases" component of GDP

Is not counted in GDP because the strawberries are intermediate goods

The Smuckers company buys a ton of strawberries that they will use to make strawberry jam. The strawberry purchase

Faster than

The Solow model predicts that poor countries will grow ______________ rich countries

Increased, decreased

The South African "Colour Bar" laws _____________ the earnings of white workers and _____________ the earnings of black workers

Concentrated, dispersed

The US sugar program can be explained by the logic of __________ benefits and _____________ costs

Higher than they would be without the quota

The US sugar quota means that sugar prices are

Fall, rise

The Union of Concerned Scientists lists Gulfport, Mississippi as an area that is "threatened" by climate change. Holding everything else constant, this means prices of real estate in Gulfport, Mississippi will ____________ and prices of real estate in Birmingham, Alabama will ____________

$200

The University of Chicago Press buys $100 worth of paper and $50 worth of glue that they use to print $200 worth of books. The contribution of all this activity is to GDP is

Free-rider problem

The ____________ helps explain why gun control measures are difficult to pass

Consumption

The largest component of GDP is

Produce goods and services

To the extent that economic activity has a point, it is to

Insufficient information to answer the question

Trevon can bake 200 cakes or 400 pies per week. Trevon should specialize in

Cannot, can

Two people _________ use the same shovel at the same time. Two people __________ use the same idea at the same time

$3000

Using the factor income approach, calculate the value of US national income. Wages: $1500 Rent: $600 Interest: $300 Profits: $600

Shortages in the market for loanable funds

Usury laws create

Exports

We pay for our imports with our

Make things and exchange them for other things

When the members of a society have incentives to ________________ the society will prosper

Rises, falls

When the price of muscadines ________________, quantity demanded _________________.

Lower than

When there has been a reduction in the saving rate, investment will be _________________ depreciation at K*

Net exports

Which of the following is not a component of GDP according to the factor income approach?

Anti-media bias

Which of the following is not one of the biases contributing to "rational irrationality"?

Honest government, open and competitive markets, a dependable legal system

Which of the following is one of the institutional causes of economic growth?

Increases

more capital _____________ output

Consumer Surplus

the consumer's gain from exchange, or the difference between the maximum price a consumer is willing to pay for a certain quantity and the market price

Producer Surplus

the producer's gain from exchange, or the difference between the market price and the minimum price at which a producer would be willing to sell a particular quantity

$3

You can buy one burger for $5 or two burgers for $8. The marginal cost of the second burger is

There are mutually profitable trades that can be made

As long as the price consumers are willing to pay is greater than the price sellers are willing to accept

A smaller

Compared to a few decades ago, ________________ fraction of the worlds population lives in extreme poverty

A lot

Compared to the rest of your life, you earn _________________ when you are middle-aged

Little

Compared to the rest of your life, you earn _________________ while you are retired

Little

Compared to the rest of your life, you earn _________________ while you are young

Rise, fall

Holding everything else constant, the equilibrium price of insulin will ____________ and the equilibrium quantity will ___________ if the supply falls

1940

If real GDP per capita in the US had grown at 1% per year since 1800, standards of living today would be about what they were in

interest rates would fall

If the Federal government were to reduce its borrowing,

10 (.02x500)

If the capital stock is 500 units and the depreciation rate is 2%, ___________ units of capital wear out

financial intermediary

A ________________________________ is an organization that brings together borrowers and savers.

Shortage

Suppose "Monterey" Jack Roquefort proposes a binding price ceiling on the market for cheese. This will lead to a cheese

True

T/F: Larger global markets mean larger returns to high skills in the US

False

T/F: if Alpha and Omega have the same GDP, then they have the same standard of living

Rational ignorance

"If pasteurized dairy ingredients are used, the phenol equivalent value of 0.25 gram of Swiss cheese is not more than 3 micrograms as determined by the method described in 133.5." Hardly any voters can explain the "method described in 133.5" or even explain what "phenol" is. Why not?

Curb his enthusiasm for tariffs at least somewhat

"Monterey" Jack Roquefort is a staunch protectionist from a congressional district where there are a lot of cheese producers. Suppose he has presidential ambitions. The median voter theorem predicts that he will

A very weak incentive

"Monterey" Jack Roquefort is running against Brie "Free" Trayder in a congressional district that represents 300,000 people, many of whom work in the cheese industry and have strong protectionist leanings. In light of what you know about the probability that your vote will decide the election between "Monterey" Jack Roquefort and his opponent Brie "Free" Trayder, you have ________________ to really understand how cheese tariffs affect American consumers and producers

Frederic Bastiat's "Broken Window" argument. The fact that the dog ruined the shirt is bad for the economy even though it might increase spending on shirts at Target because had the shirt not been ruined, they would've had a shirt plus whatever else they could have spent whatever Target charges for a shirt on

"One of my new shirts was in the garbage," your professor said to his wife. "It had a hole in it," she replied. They both agreed that it was probably the dog's fault. Your professor was initially upset, but then he realized it would make a good quiz question illustrating which concept?

higher to lower value uses

"Politicized lending" moves resources from

Anti-foreign

"Trade with other Americans and no one bats an eye. Trade with foreigners and everyone loses their minds." This is an example of what bias?

Both rich and poor people

"Voting with your feet" helps

Make-work bias

"we should impose tariffs on Canadian wood products to save jobs in the American forestry industry" is an example of

True

T/F: if ideas are constantly improving, output can continue growing constantly

True

T/F: if it were easy to buy and sell polar bears in markets, then polar bears could be included in GDP

She-Ra

5 voters are aligned along a spectrum ranging from "silly" to "sensible" as follows: Skeletor (most silly), Trapjaw, She-RA, Man-At-Arms, He-Man (most sensible). According to the median voter theorem, a candidate who wishes to win the election would do well to adopt ____________'s preferred policies

$30 million

A $10 per pair tariff on sneakers increases American sneaker production from 2 million to 4 million pairs and decreases American sneaker consumption from 8 million to 6 million pairs. What do producers gain?

Insufficient information to answer the question

A $10 per pair tariff on sneakers increases American sneaker production from 2 million to 4 million pairs and decreases American sneaker consumption from 8 million to 6 million pairs. What is the value of consumer surplus with free trade?

$10 million

A $10 per pair tariff on sneakers increases American sneaker production from 2 million to 4 million pairs and decreases American sneaker consumption from 8 million to 6 million pairs. What is the value of the deadweight loss?

$10 million (10x2/2)

A $10 per pair tariff on sneakers increases American sneaker production from 2 million to 4 million pairs and decreases American sneaker consumption from 8 million to 6 million pairs. What is the value of the resources wasted producing shoes in the US?

American

A French student in Canada buys an Australian Football League jersey that was manufactured in the US. The jersey is counted as part of _____________ GDP

Patent

A ______________ gives someone a property right over an idea

stock, bond, higher

A ________________ is riskier than a ______________________, which is why it pays a ______________ return.

patent

A ___________________________ creates a property right to an idea.

security

A contract that entitles its owner to future payments is a

adding capital

A country engaged in "catch-up" growth is growing by

increase steady state output

A few years ago, researchers at Lockheed Martin's Skunk Works research and development facility announced an important breakthrough in controlled nuclear fusion. If they are eventually able to commercialize this idea, it will make energy much cheaper and cleaner. Holding everything else constant, this will _________________________________.

By raising gas prices, the station owner helps direct resources to where they're most valuable

A gas station owner buys gas for $2.00 per gallon from a wholesaler on the expectation that he will be able to sell it for $2.50 per gallon. Then a hurricane hits, demand surges, and people are lined up for gas. Which of the following statements is true?

More

A higher wage for janitors will draw ______ people into the janitorial industry

Price Ceilings

A legal maximum on the price at which a good can be sold

Price Floor

A legal minimum on the price at which a good can be sold

Bond

A long term IOU issued by a government, corporation, or other entity in which you are lending money to the issuer

Signal wrapped up in an incentive

A price is a

Increase standards of living by making avocados cheaper to produce and freeing up the resources currently used to produce avocados for other things

A scientist invents an avocado replicator that simply creates avocados out of thin air. This would

Substitutes, decrease

A sign outside a shop in Homewood reads "Who needs a boyfriend when you can have a big cozy sweater?" This implies that boyfriends and big cozy sweaters are ______________, and a reduction in the price of big cozy sweaters will _____________ demand for boyfriends

Identifying resources in low-value uses and moving them into higher value uses

A speculator earns money by

equity, debt

A stock is a(n) _____________________ contract. A bond is a(n) ____________________ contract.

$2

A student buys paper from the Samford bookstore for $2. The Samford bookstore bought the paper from Georgia-Pacific for $1.50. Georgia-Pacific bought wood pulp from a logging company in Oregon for $0.25 and spent $1.00 turning the wood pulp into paper. All told, the paper represents _________________________ worth of Gross Domestic Product.

Consumption

A sushi roll you buy on five dollar sushi day at your local grocery store is counted as

fascism

A system where the means of production are privately owned but government-controlled is _____________________________________.

Decrease, increase

A tariff leads to a _______________ in domestic consumption and a _____________ in domestic production

$3.75 million (consumer lost gains: (100-25)x.1/2)

A tariff of $0.10 cents per pound on sugar increases domestic sugar production from 0 pounds to 25 million pounds and reduces Domestic consumption from 100 million pounds to 25 million pounds. What is the value of the deadweight loss from sugar we bought?

$1.25 million (producer supply: (25-0)x.1/2)

A tariff of $0.10 cents per pound on sugar increases domestic sugar production from 0 pounds to 25 million pounds and reduces Domestic consumption from 100 million pounds to 25 million pounds. What is the value of the resources wasted producing sugar in the US?

0 pounds (25-25)

A tariff of $0.10 cents per pound on sugar increases domestic sugar production from 0 pounds to 25 million pounds and reduces Domestic consumption from 100 million pounds to 25 million pounds. What were imports after the tariff?

100 million pounds (100-0)

A tariff of $0.10 cents per pound on sugar increases domestic sugar production from 0 pounds to 25 million pounds and reduces Domestic consumption from 100 million pounds to 25 million pounds. What were imports before the tariff?

Decrease, increase

A tariff on cherries produced in foreign countries will ______________ The amount consumed in the United States and ___________ The amount produced in the United States

Reduces

A tariff on sugar ____________ gains from trade

A recession

A temporary, widespread reduction in employment and output is

60,000

About _____________ people die every year waiting for transplantable kidneys

China

About a year ago, I bought a stuffed moose made in China during a trip to Canada. The Moose counted in GDP for

easier

Access to navigable waterways makes it _______________________________________________ to find potential trading partners.

Larger

According to Adam Smith, access to water meant access to __________ markets

Concentrated Benefits and Dispersed Costs

According to Google, the Can Manufacturers Institute "actively participates in the exchange of ideas influencing legislative, regulatory and administrative policies of interest to can makers. "There is not, as far as I can tell, a Can Consumers Institute consisting of beer and soft drink enthusiast with a similar mission. This is most likely explained by

Fire all its advanced degree holders and replace them with high school dropouts

According to an October 21, 2019 report from the Bureau of Labor Statistics, high school dropouts earned $606 per week while advanced degree holders earned $1559. Of this is strictly due to discrimination, what should a profit-obsessed firm do?

Hire Asian women age 16-24 instead of Asian women age 25-54

According to data from the bureau of labor statistics, median weekly earnings for Asian women aged 16 to 24 are 65% of median weekly earnings for Asian women aged 25 to 54. Assume this is entirely due to age discrimination. How could an employer change it strategy in order to increase profits?

Better off, better off

According to most economists, international trade makes Americans ______________ and foreigners ____________ on net

Better off, better off

According to most economists, trading with foreigners whether here or abroad makes Americans _______________ on net and foreigners _____________ on net

Increase the profits of existing factories

According to the "Bootleggers and Baptists" theory of regulation, strict new environmental standards in new factories will

Encouraging you to become a mathematician/statistician rather than an actor

According to the BLS Occupational Outlook Handbook, 2018 median pay for mathematicians and statisticians is $88,190 - about $44/hour for a 2000 hour work year. Median annual earnings for actors is $17.54 per hour. This is the markets way of

People create wealth by moving resources from lower to higher value uses

According to the One Lesson of Business,

Higher, higher

According to the Solow growth model, a reduction in the depreciation rate will lead to _________________ steady state capital stock and _________________ steady state output

Lower, lower

According to the Solow growth model, a reduction in the saving rate will lead to a _________________ steady state capital stock and _________________ steady state output

Cleaner air

According to the economist Alan Blinder, creating traceable pollution permits would lead to

II only

According to the economist Brian Caplan, which of the following statements would be considered an example of make work bias? I. "housing is a human right. People shouldn't have to pay a landlord for it." II. "Oh, I don't use the self checkout at the store. I want to protect people's job." III. "Health Care is too important to be left to the market."

They exhibit anti-market bias

According to the economist Brian Capland, most voters approve of laws to prohibit "price gouging" because

Are less trusting of market solutions to social problems than professional economists

According to the economist Bryan Caplan, members of the general public

Anti-market bias

According to the economist Bryan Caplan, voters don't approve of tradable emissions permits because of what he calls

People

According to the economist Julian Simon, the ultimate resource is

all publicly available information is reflected in asset prices

According to the efficient markets hypothesis,

Better off

According to the law of comparative advantage, Americans are _________________ on net because they can trade with foreign countries

Dissave

According to the lifecycle theory of saving, someone who is old will

Borrow

According to the lifecycle theory of savings, someone who is young will

Converge toward similar policies

According to the median voter theorem, politicians will tend to

Enjoy lower total surplus

According to the model of international trade we have developed in class, a country that makes it harder for its citizens to trade with the rest of the world will

Enjoy more gains from trade

According to the model of international trade we have developed in class, a country that relaxes its restrictions on trade with the rest of the world will

2.7%

According to the most recent data, the inflation rate as measured by the Consumer Price Index for All Urban Consumers is

70/growth rate

According to the rule of 70, it take ____________ years for something to double

Lower

As a result of the Coronavirus pandemic, people aren't demanding as many goods and services. Holding everything else constant, we expect this to lead to ____________ wages

Law of diminishing marginal return

Adding capital increases output, but at a decreasing rate. Not a constraint when markets are competitive and open and people innovate

Increasing, decreasing

Adding capital will _________________ output at a ___________________ rate

Bad for the economy

Against my better judgement, I let the kids convince us to get a dog a few months ago. We took a long road trip in May, and our dog sitter would regularly send us pictures of what the dog had chewed up. This canine destruction was

Rise

Alex is willing to work for $20 per hour. Eddie is willing to hire someone at $30 per hour. The equilibrium wage is $25. Gains from trade would ________________ if Eddie hired Alex at the equilibrium wage

The American economy is more productive than the Indian economy

American janitors earn higher wages than Indian janitors. This is because __________________

American sugar tariffs make sugar much more expensive than it is in the rest of the world, so American producers switch to a cheaper substitute

Americans sweeten soft drinks with high fructose corn syrup. The rest of the world sweetens soft drinks with sugar. This is because

raise, lower

An aging population means that people will wish to save less and consume more. This will ________________________ the equilibrium interest rate and ______________________ equilibrium investment.

Higher wages

An increase in demand for labor combined with a reduction in the supply of labor will lead to

Increase

An increase in saving will ______________ the level of steady state output

III only

An increase in social dignity for which of the following helps explain why people in some places are very rich while people in other places are very poor? I. shedding blood II. prayer and charity III. buying and selling

Increase, increase

An increase in the demand for labor will __________ wages and __________ the number of labor hours hired

Decrease

An increase in the minimum wage for disabled workers will _____________ the number of disabled workers demanded

Real

An increase in the quantity and quality of goods and services is _______________ GDP growth

Real

An increase in the quantity of goods and services produced in a country (holding prices constant) is ______________ economic growth

Reduce, increase

An increase in the supply of labor will ___________ wages and ____________ the number of labor hours hired

The median voter in the general election had a more moderate stance on trade in the median voter in the Democratic primary

And the 2008 Democratic Primary, Barack Obama said that he would renegotiate the North American Free Trade Agreement. After he clinched the Democratic nomination, he softened his stance for the general election. This is because

Do not change GDP

As I write this, we are selling our house in Southside (built in 1920) and buying a house in Avondale (built in 2018). The sale of these houses _____________. Focus only on the houses and not on the ancillary services provided by real estate agents and others

Will not be used efficiently

As a result of price controls, resources

Higher

As a result of the Coronavirus pandemic, every job is riskier than it was before. Holding everything else constant, we expect this to lead to __________ wages

Slowed

As countries like Japan and Germany caught up with high capital, high output countries, the economic growth rate

Lower

As more people get vaccinated for the Coronavirus, the risk of infection will fall and jobs will not be as risky as they were during the pandemic. Holding everything else constant, this will lead to __________ wages

$1800, $35400

As of the publication of the video, per capita GDP in North Korea was ____________. In South Korea, it was ________________

Attract workers into agriculture and reduce wages

As part of her Dignity for Farmworkers and Food Chain Workers plan, presidential candidate Elizabeth Warren has proposed tough workplace safety regulations for agricultural workers. Holding everything else constant, this will

rise

As populations age, people choose to save less. If people are saving less, interest rates will _______________________________. Remember that we are holding everything else constant

rises, falling

As the United States adds capital goods, output ___________________________ at a ________________________________ rate.

Paying a lower interest rate to savers than they charge to borrowers

Banks earn profits by

Depositors, borrowers

Banks pay interest to _________________ and charge interest to _________________

interest rates

Bargaining between prospective borrowers and prospective lenders will determine

Draw barley out of beer production and make beer more expensive to produce

Barley can be used to make beer and Grape Nuts. Holding everything else constant, an increase in the price of Grape Nuts will

An increase

Based on what you have learned about how markets work, an increase in the price of coffee in Vancouver would likely lead to _____________ in the price of roses in Melbourne, Australia

non-rival, undersupply

Because new ideas are ______________________________________ and create positive spillover benefits, free markets may tend to __________________________________________ them.

Not a majority

Belle, Tiana, and Jasmine are trying to pick a service project to propose to their sorority. They have the following preferences. Which option does the majority prefer?

Decrease gains from trade

Binding price controls

Shortage of rental apartments

Birmingham's city council decides that the Rent is Too Darned High and passes a low capping apartment rents below the equilibrium price. This will create a

$50

Bob values his time at $40 per hour and waits in line for 45 minutes to get 10 gallons of gas for $2 per gallon. The total cost of the gas to Bob is

They want to buy American goods, like visits to Disney World

Brazilian sugar producers produce sugar and sell it to Americans because

Fall

Broccoli and olive oil are complements (goods that are usually consumed together). If the price of broccoli rises, the demand of olive oil will

The other options are incorrect

If the demand for labor and supply both fall, what happens to the equilibrium wage and the equilibrium quantity of labor?

Two hours

By hiring one worker hour, Fish-Fil-A can earn $100. By hiring two worker hours, Fish-Fil-A can earn $125. By hiring three worker hours, Fish-Fil-A can earn $135. At a wage of $17 per hour, Fish-Fil-A would be willing to hire

Two worker hours

By hiring one worker hour, Fish-Fil-A can earn $35. By hiring two workers hours FFA can earn $55. By hiring three worker hours, FFA can earn $70. At a wage of $17 per hour, FFA would be willing to hire

Insufficient information to answer the question

By hiring two worker hours, FFA can earn $55. By hiring three worker hours, FFA can earn $70. The marginal product of the second worker hour is

$15

By hiring two worker hours, FFA can earn $55. By hiring three worker hours, FFA can earn $70. The marginal product of the third worker hour is

Decreasing

By investing resources in lobbying for tariffs, subsidies, quotas, and so on, a firm is ______________ standards of living

Increasing

By investing resources in new ideas, new business processes, and building retail outlets, a firm is ________________ standards of living

Reducing

By lobbying for higher tariffs, subsidies, and quotas, Michigan cherry farmers are _______________ American standards of living

Equipment

By physical capital, economists mean ____________ in the broadest sense

Bankrupt

Capital is allocated relatively efficiently in South Korea because firms can go

Communism

Centralized ownership and control (socialism + terror). Militarization is common and country is doomed to poverty

Lower, lower

Cherries and ice cream are complements. Holding everything else constant, higher cherry prices will lead to a ___________________ equilibrium price and a _________________ equilibrium wanting for ice cream

There is relatively little capital in China, so the marginal product of capital in China is high

China is growing more rapidly than the US because

No. Coke Zero Sugar and sugary soft drinks are substitutes, so an increase in the price of sugary drinks will increase demand for, and therefore the equilibrium price and quantity of, drinks like Coke Zero

Coke Zero Sugar has no sugar in it, but a tax on sugary drinks increases the price of Coke Zero. Should this surprise us?

Skill-building

College athletes report that they learn teamwork and time management while balancing demanding athletic commitments. This is consistent with the ___________________ model of schooling

Make them less willing to supply frozen concentrated orange juice for current consumption

Consider the market for frozen concentrated orange juice. Suppose people expect future orange crops to be smaller as a result of climate change. This will

$3000

Consumption: 2000 Wages: 1500 Rent: 600 Investment: 500 Interest: 300 Imports: 200 Exports: 250 Profit: 600 Using the factor income approach, calculate the value of US national income

New ideas

Countries experience cutting edge growth when they develop

developing more and better ideas

Countries on the "cutting edge" grow by __________________________________________.

accumulating physical capital

Countries that are "catching up" grow by _____________________________.

different levels of steady-state output

Countries with different institutions will likely converge on

Lower

Countries with low GDP per capita tend to have _____________________ life expectancy as/than countries with high GDP per capita

New ideas

Cutting edge growth is driven by

4

Deirdre values her alternatives to working as follows. If she can earn $21 per hour, how many hours of labor will she be willing to supply? Value of Best Alternative to Working: Hour 1: $5 Hour 2: $10 Hour 3: $15 Hour 4: $20 Hour 5: $25 Hour 6: $30

1

Deirdre values her alternatives to working as follows. If she can earn $7 per hour, how many hours of labor will she be willing to supply? Value of Best Alternative to Working: Hour 1: $5 Hour 2: $10 Hour 3: $15 Hour 4: $20 Hour 5: $25 Hour 6: $30

Inferior Good

Demand decreases when income increases (and vice versa) -Soup: cheap so people eat it less and less, but during recession, people eat it more

Normal Good

Demand increases when income increases (and vice versa)

Incentives

Different institutions create different

Small

Disagreements among economists are ______________ compared to disagreements between economists and the general public

There are lost gains from trade

Domestic consumption reduces welfare as a result of tariffs because

There are wasted resources from higher cost production

Domestic production reduces welfare as a result of tariffs because

a haircut service that won't get counted in GDP

Dr. Buchanan posted this picture of her son shortly before giving him a haircut at home, captioned it with something you might expect from an economist, and graciously gave me permission to use it in this quiz. Which caption would be most appropriate?

The answer depends on how much you're willing to pay for a second Whopper

Dr. Google says you can get a Whopper at Burger King for $4.19. Over the summer, they had a promotion where you could get one whopper at regular price or two Whoppers for $5. Which is the better deal?

Smaller

Due to inflation, a measured increase in real GDP will be ______________ a measured increase in nominal GDP

2020

Earlier in 2021, I bought a party game called Cards Christians Like. The set was manufactured in 2020. It would therefore be counted in GDP for

Fewer fringe benefits, lower wages, and an end to $0 coffee

If the demand for labor falls in a competitive market, we would expect to see

Good for, the money we would otherwise spend replacing destroyed stuff can be used elsewhere

Early in the pandemic, I had a lapse of judgment and let my kids convince us to get a dog. Lucy joined our family in April. We had her trained over the summer, so she doesn't chew up or destroy things the way young dogs tend to. Lucy's restraint is ____________ the economy because ______________

Catching up

Economic growth in Japan and Germany after World War II was _____________________ growth

Consumed, saved

Economic output can either be ________________ or _________________

New technology and ideas

Economists attribute long-run economic growth to

According to the special interest theory of politics, politicians who wish to get elected have to craft policies that appeal to self-interested voters

Economists pretty much all agree that tariffs reduce gains from trade, and yet they remain. Why?

decrease, increase

Eliminating restrictions on new housing construction in San Francisco would _________________ the equilibrium price of housing and ____________________ the equilibrium quantity.

Reduce, increase

Eliminating tariffs and going completely to free trade will ______________ the equilibrium price and ______________ the equilibrium quantity of cherry pies

Losses

Entrepreneurs earn _________________ by moving resources from high value to low value uses

Two to three times as much

Europe has ________________ coastline than Africa

Even the richest countries had in 1800

Every country in the world today has a higher life expectancy than

different

Every year, _________________________________________ mutual funds beat the market.

Well spent, wasted

Every year, various trade associations and other groups spend millions and millions of dollars trying to get governments to pass tariffs, quotas, or other rules making it harder for foreign producers to sell their goods in the US. Many of them are successful. From the perspective of the association themselves, this is money _________________. From the perspective of all Americans, this is money ______________

Low

Exercising and studying are examples of ________________ time preference

fewer, worse

Farmers in low-income countries are less productive because they can work with __________________________ and __________________________ factors of production.

More, better

Farmers in rich countries are more productive because they can work with _______________ and ____________ factors of production

I and II

Financial intermediaries _________________________. I. reduce transaction costs II. allow people to share risk III. do not create value

The value of the marginal product is greater than the wage

Firms will be willing to hire every hour of labor for which

Marginal product > wage

Firms will hire labor as long as

more ideas

For a country that has good institutions in place, _________________________ will lead to economic growth over the long run.

Investment

Fraction of production/output turned into new tools

Seek substitutes for wood

Furniture manufacturers use a lot of wood. If the price of wood rises, furniture manufacturers will

Rising output and/or rising prices

GDP can go up because of

The market value of all finished goods and services produced in a country in a year

GDP is

GDP/population

GDP per capita or per person is found by

Institutions

Good _________________ make financial intermediation work

Low time preference

Good things come to those who wait. Results in long term

Tangible, actions

Goods are _____________ while services are ______________

Reduces gains from trade by a+w+y+b (wasteful trade and deadweight loss)

Government officials are trying to decide whether or not to fight poverty by raising the minimum wage to $6 per hour. The graph below shows what will happen. Compared to a free market, the minimum wage

Less than

Here's a picture of an apartment complex that is under construction in downtown Birmingham. It's next to train tracks. Holding everything else constant, apartments in this building will rent for _____________ apartments in a building that isn't near train tracks

Higher exports in industries in which Americans have a comparative advantage

Higher cherry imports from Turkey will most likely lead to

lower

Higher interest rates mean ______________________ bond prices, all else equal.

higher steady-state output

Higher saving in the Solow growth model leads to

less

Holding everything else constant, $100 one year from today is worth _________________________ as/than $100 today.

Larger

Holding everything else constant, ____________________ populations tend to have more ideas

Smaller loaves of bread and lower quality loaves of bread

Holding everything else constant, a binding price ceiling in the market for loaves of bread will likely lead to

Reduce the quality of existing housing

Holding everything else constant, a binding price ceiling in the market for rental housing will likely

Decrease benefits, flexibility, and other perks in jobs where the minimum wage is binding

Holding everything else constant, a binding price floor in the market for labor will likely

more than

Holding everything else constant, a dollar today is worth _______________________ a dollar one year from today.

less, more

Holding everything else constant, a higher interest rate will induce people to borrow _______________ and save ___________________, on net.

Harder and less pleasant

Holding everything else constant, a higher minimum wage will lead to jobs that are

I and II

Holding everything else constant, a minimum wage in excess of the free market equilibrium wage is likely to lead to ______________ for low-income workers I. Fewer hours II. Fewer workplace perks and benefits III. Higher employment for low income workers

Lower, lower

Holding everything else constant, a reduction in the demand for labor will lead to a _________________ equilibrium wage and a __________________ equilibrium quantity

increase

Holding everything else constant, a reduction in the interest rate will ____________________________ bond prices.

A lower interest rate and a higher amount invested

Holding everything else constant, an increase in saving will lead to

Higher wages and an uncertain change in quantity

Holding everything else constant, an increase in the demand for labor and a reduction in the supply of labor will lead to

Lower, higher

Holding everything else constant, an increase in the supply of labor will lead to a ______________ equilibrium wage and a ___________________ equilibrium quantity

rise

Holding everything else constant, bond prices will __________________________________________________ if the interest rate falls from 12% to 9%.

Worse

Holding everything else constant, giving people lottery tickets in exchange for voting would lead to ________________ public policy

Lower

Holding everything else constant, improved working conditions in fast food restaurants will lead to __________ wages

Common

Holding everything else constant, it is better to have a ________________ disease

Reduce

Holding everything else constant, making jobs more fun, more interesting, and safer will _______________ wages

Lower

Holding everything else constant, mandating more and better safety equipment for dangerous jobs will lead to __________ wages

Reduce

Holding everything else constant, mandating that employers provide coverage for basic health care and dentistry will tend to ____________ wages

Decreasing quality

Holding everything else constant, rent control is likely to lead to _________________ of housing

higher

Holding everything else constant, someone with high time preference will most likely pay __________________________________ interest rates as/than someone with low time preference.

Low productivity (least experienced, educated, and trained)

The minimum wage affects workers with

Higher wages and more workplace injuries

Holding everything else constant, we would most likely expect _______________________________ if the occupational safety and health administration (which regulates workplace safety) were eliminated.

Less than

I had to go to the dentist for an "emergency" root canal yesterday. Holding everything else constant, a dentist who loves patients and gets great satisfaction out of alleviating their suffering will earn _____________ a dentist who doesn't

They get paid for it and can use their incomes from doing root canals to do the things that matter to them

I had to go to the dentist for an "emergency" root canal yesterday. Which of the following is probably the most important reason they were ready and willing to do the procedure on relatively short notice?

Fall, fall

I recently learned that the effect of houseplants on indoor air quality is very tiny (bordering on nonexistent). As more people come to believe this, the equilibrium price of houseplants will ______________ and the equilibrium quantity of houseplants will ___________

Rational ignorance

I'm assuming you don't know very much about California Assembly Bill No. 5 approved by the governor on September 18, 2019. Among other things, it exempts psychologists from the provisions established in the Dynamex Operations West Inc. v Superior Court of Los Angeles decision. The fact that you don't know much about this bill is an example of

Institutions

Ideas grow in the soil of good

fall

If Covid makes people more pessimistic and they start borrowing less, the interest rate will

Waffle House v. Hamburger Heaven with the winner facing McDonalds

If David wanted to ensure his preferred outcome, how should he order the choice? First Choice: McDonalds Second Choice: Waffle House Third Choice: Hamburger Heaven

Dreamland v. Olive Garden with the winner facing Saigon Noodle

If Taylor Grace wants to ensure that the family goes to Saigon Noodle House, what order of voting should she propose?

Insufficient information to answer the question

If Zuri could bake 30 pies or 40 cakes in a week, she should specialize in

The marginal product of an hour of labor is greater than the wage

If ________________, a firm will hire an hour of labor

Bond holders

If a corporation goes bankrupt, the first people to be paid when the corporations assets are liquidated are

Economic profit, covering explicit and implicit costs

If a firm is earning a _______________, it is _____________________

He is the last voter they need to convince in order to get the majority needed

If a political candidate wants to win, they will have to move their opinions/positions to the Median voter because

Rise

If a tin mine collapsed, the price of tin would

Very weak incentives to make sure we have filled out any change of address forms we need to fill out in order to vote on November 3

If all goes well, we will be changing addresses sometime after October 27. Election day is Tuesday, November 3. In light of the probability that my wife and I will cast the decisive vote in the election, we have

The purchase counts toward GDP for Holland

If an American buys French fries in Amsterdam (a city in Holland), what happens?

Increase, increase

If cherries and strawberries are substitutes then higher cherry prices will _________________ the equilibrium price and _______________ the equilibrium quantity of strawberries

Fall

If consumer electronics started wearing out at a faster rate, steady state output would _________________________.

Weaker

If governments freeze deposit so that they cannot be withdrawn, people have _________________ incentives to put money in banks

Fall

If interest rates rise, bond prices

"You should conserve oil and look for substitutes for oil"

If oil prices rise, consumers get which signal?

more, patents

If people anticipate being able to earn large short-run profits, they will innovate _________________. This is part of the rationale for ___________________.

rise

If people become more present-oriented, interest rates will

Decreases

If people expect the price of chocolate to fall tomorrow, this _________________ the opportunity cost of consuming chocolate today

Rise

If people get impatient and begin to save less, the interest rate will

Rise

If people get optimistic and decide to borrow more, the interest rate will

Increase the political power of the elderly

If people vote with their narrow financial interests in mind, raising the voting age to 27 will most likely

Over state improvements in standard of living because the numbers are not adjusted for inflation

In 1998, nominal GDP was $8.9 trillion. In 2020, nominal GDP was $21.5 trillion. Comparing the two would

Make-Work bias

In 2011, Jesse Jackson Junior claim that the iPad was eliminating thousands of American jobs in the publishing industry. This, he thought, was bad for the economy overall. Mr. Jackson's comments are an example of

Fall

In 2015, Zagat's named Birmingham America's Next hot Food City. In 2018, Birmingham's Highlands Bar and Grill won the James Beard Award as the best restaurant in America. If these induced an increase in the supply of labor in Birmingham, wages would _______________. Hold everything else constant, including the demand for labor

Rises

In 2015, Zagat's named Birmingham America's Next hot Food City. In 2018, Birmingham's Highlands Bar and Grill won the James Beard Award as the best restaurant in America. If these led a few companies to open new offices in Birmingham, increasing the demand for labor, then wages would __________. Hold everything else constant, including the supply of labor.

Insufficient information to answer the question

In 2015, Zagat's named Birmingham America's Next hot Food City. In 2018, Birmingham's Highlands Bar and Grill won the James Beard Award as the best restaurant in America. If these led to an increase in demand for labor as more firms opened offices in Birmingham and an increase in the supply of labor as more people moved to Birmingham, wages would _____________

1920 GDP

In 2015, your professor bought a house that was built in 1920. The house was counted in

The shirt was part of 1995 US GDP

In 2017, I bought a Birmingham Barracudas T-shirt at a thrift store. The Barracudas were a Canadian football league team that lasted exactly one season in 1995. The shirt was made in the United States in 1995 for a Canadian football league team, and I bought it in 2017. Which statement is true?

Extreme, moderate

In American elections, the parties select their candidates in primaries, and then their candidate face one another in the general election. The median voter theorem predicts that a candidate will endorse a more ____________ position in the primary and a more ______________ position in the general election

Much faster than

In Germany and Japan after World War II, economic growth was ______________________ it was in the US

Nicaraguan GDP

In March 2020, I bought a University of Manitoba T-shirt during a visit to Canada. the shirt was made by a US company and manufactured in Nicaragua. The shirt counted toward

Trying to influence the political allocation of resources

In North Korea, people expend considerable energy

Reduced

In Ontario in the 1970s, the prospect of rent control __________________ the number of new apartments being constructed

Reduced gains from trade

In September 2019, the California Psychological Association worked hard to get the California legislature to pass Assembly Bill No. 5 to exempt its members from the provisions established in the Dynamex Operations West, Inc. v. Superior Court of Los Angeles decision. From the perspective of society as a whole, these rent-seeking efforts

Entrepreneurs

In a capitalist economy, ______________ are the ones who organize factors of production and technological knowledge

Incentives

In a capitalist economy, people have strong _______________ to invest and work hard

profits and losses

In a competitive market, ________________________ tell firms whether or not they are choosing wisely or wastefully.

Prices

In a free market, crucial information about what to produce, how to produce it, and for whom to produce it is transmitted by

Maximized

In a free-market equilibrium, gains from trade are

Depreciates

In addition to the law of diminishing marginal returns, capital

Firms hire exactly as many hours of labor as people wish to supply

In equilibrium in the labor market

higher demand for retail workers in the wake of COVID-19

In response to the COVID-19 epidemic, Amazon is offering an extra $2 per hour "through the end of April for hourly employees." Walmart is offering "special bonuses to its hourly employees to reward them for their work in serving customers who are stockpiling toilet paper and other basics." This is most likely due to

weaker

In response to the Covid pandemic, suppose the government passes a law making it illegal for people to withdraw their money from banks. This will give them ________________________________________________ incentives to put money in the bank.

investment = depreciation

In steady state in the Solow growth model,

No

In steady state, _____________ new capital is being created

People would not have paid for these luxuries and amenities in a free market

In the 1970s, airlines increased quality because they were not allowed to compete by lowering price. This was wasteful because

K

In the Solow Growth Model, "capital" is indicated by

Twice as expensive

In the US, sugar is about ________________ as it is in the rest of the world

Market prices

In the absence of _____________________, people cannot know whether or not they are using resources wisely or wastefully

Waste resources that could have been better used elsewhere

In the cartoon show Squidbillies, Glenn asks Dougal County to use tax dollars to build a Gravy Museum. In light of what we have learned this semester, this would

A billion dollars, fifty cents

In the example about pharmaceuticals, Alex Tabarrok explained that the first pill cost __________ while the second pill cost ________

Firms, hours of labor

In the labor market, ____________ demand ____________

Workers, hours of labor

In the labor market, _____________ supply _____________

Other firms

In the labor markets, firms compete with

Both their people and their profits

In the long run in a competitive market, a firm that puts "profits before people" will lose

Lower, more

In the market for loanable funds, an increase in people's desire to save for future consumption will lead to _____________ interest rates and ___________ loans

Their endeavor costs society the goods and services they are not producing while they are planning and executing their big heist

In the movie Oceans 8, Debbie Ocean assembles a team of criminals to steal jewelry. Which statement is true?

70

In the present day, average lifespan in many parts of the world is around _____________ years

Ideas

In the version of the Solow model we are learning, A stands for

Capital

In the version of the Solow model we are learning, K stands for

Labor

In the version of the Solow model we are learning, L stands for

Education

In the version of the Solow model we are learning, e stands for

GDP equals GDI

In theory, which is true?

More goods and services produced, an increase in the price of goods and services produced, or a combination of both

Increases in GDP are a result of

Increased exports in industries in which Americans have a comparative advantage

Increasing imports of sugar from Brazil will most likely lead to

1880

India has a real GDP per capita comparable to the US in

Too much, too few

Inflation happens when there is __________ money chasing __________ goods

the right to use other people's money right now

Interest is the price people pay for

Higher demand for kiwis

Kiwis are normal goods. An increase in income will therefore lead to a

Fall, fall

Kumquats are inferior goods. If consumers incomes rise, this means the equilibrium price of kumquats will _______________ and the equilibrium quantity of kumquats will ___________

Social waste

Michigan cherry farmers spent $2 million in legal fees in their effort to get tariffs on Turkish cherries. From the perspective of society as a whole, this $2 million represents

The costs of becoming informed exceed the benefits

It is "rational" to be ignorant when

The costs to you of changing your beliefs exceed the benefits

It is "rational" to be irrational when

Smart

It is better to live in a ____________ place because there are more ideas and more consumption

He would have heard none of these because they describe technologies that didn't exist

It's summer 1999 and your professor has, against his better judgement, decided to take both Calculus III and corporate finance in the same summer term. Which statement would he be most likely to hear from one of his professors?

1980

Italy has a real GDP per capita comparable to the US in

10

Japan's standard of living today is about ___________ times higher than in 1950

low, high

LaTonya and Sally go to the Caf. LaTonya goes straight to the salad bar. Sally goes straight to the dessert table. This suggests that LaTonya has _____________________________ time preference and Sally has _________________________________ time preference.

Increase, decrease

Labor unions tend to ____________ the earnings of some workers and ______________ the earnings of others

Lower agricultural productivity

Land collectivization in China under Mao Tse-Tung led to

lower

Large increases in the production of crude petroleum have led to ________________________________________ gas prices.

there was relatively little capital and the marginal product of capital was high

Large swathes of Europe were bombed to rubble during World War II. After the war, European economic growth was very rapid because

Stronger

Larger markets mean _______________ incentives to innovate

Reluctant

Laws that protect workers' jobs make employers ____________ to hire

$15

Little Caesars buys $1 worth of mushrooms, $2 worth of pepperoni, $1 worth of cheese, $1 worth of sauce, $2 worth of dough, $3 worth of labor, and $3 worth of rent and electricity to make a pizza it sells for $15 (for a profit of $2). What does all of this activity contribute to GDP?

No one

Loki buys an ounce of silver from Thor for $18. A year later, he sells it to Odin for $30. Who is cheated?

Insufficient information to answer the question

Lucy can make 50 waffles or 100 pancakes in a day. She should specialize in

Under supply

Markets tend to _______________ goods that create positive spillover benefits, like basic knowledge

An increase in demand

Means an increase in quantity demanded at every given price or an increase in the maximum willingness to pay for each given quantity

GDP

Measure of value of all finished goods and services produced in a country in a year

Is not counted in GDP

Mercedes buys a set of tires for $300 that they will put on a car that they will sell for $50,000. Mercedes' purchase of the tires

US GDP

Mercedes is a German company with a large factory in Alabama. A car produced by Mercedes in Alabama counts as

$40,000

Mercedes spends $500 on tires that they put on a car they sell for $40,000. GDP therefore increases by

A decrease, a decrease

Minimum wages make it illegal for workers to accept less than a decreed minimum. We expect the minimum wage to lead to ________________ in workers' ability to choose their own hours and ______________ in workplace safety

1. Reduces number of jobs in US 2. Wrong to trade with countries that use child labor 3. Need to keep certain jobs at home for national security 4. Need to keep certain "key" industries at home because of beneficial spillovers onto other sectors of the economy 5. Increase US well-being with strategic trade protectionism

Most common arguments against international trade:

The decision about which TV to buy will actually make a difference

Most people spend more time and energy deciding which TV to buy than they spend deciding who to vote for because

Was a valuable service that was not counted in US GDP

My wife and I homeschooled our children for a few years. This

Increases

My younger son David told me today that he downloaded an awesome new game for his iPad. Holding everything else constant, this __________________ the value of his best alternative to working

Natalie, Natalie

Natalie: 18 Blankets, 6 Sweaters Charles: 2 Blankets, 4 Sweaters Who has an absolute advantage in blankets? Who has an absolute advantage in sweaters?

Natalie, Charles

Natalie: 18 Blankets, 6 Sweaters Charles: 2 Blankets, 4 Sweaters Who has an comparative advantage in blankets? Who has an comparative advantage in sweaters?

An intermediate good

New tires bought to replace old tires in your car are a finished good while tires used in the production of a new car are considered

Is a more accurate reflection of GDP as it accounts for inflation and other factors

Nominal GDP is in the unadjusted form while Real GDP

Totalitarian

North Korea has a ____________ state

harder, increases

Occupational licensing makes it _____________________________ for people to get jobs and thereby ______________________ unemployment.

No one

On Valentine's Day, Alex Tabarrok will present his wife with a lovely bouquet of flowers. Who is in charge of the process that ensures Tabarrok will be able to do so?

Rise

On average, international trade means wages

Rise

On average, wages ______________ as a result of international trade due to comparative advantage

Fell

On the day of the NASA Challenger explosion in 1986, the prices of the stocks of all the contractors that worked on the Challenger

The consumer surplus

On the graph, gains from trade accruing to employers would be

Single bottom most triangle below price ceiling and that was included in producer surplus

On the graph, what are the gains from trade going to landlords that are left over after wasteful trade and deadweight loss are accounted for?

Single top triangle above minimum wage and that was apart of consumer surplus

On the graph, what is the value of the gains from trade that go to employers after accounting for all the effects of the minimum wage?

Single bottom most triangle that was included in producer surplus

On the graph, what is the value of the gains from trade that go to workers after accounting for all the effects of the minimum wage?

This is a value creating transaction that is not counted in GDP

Once a month, someone comes by our house and rakes are leaves. We pay him in cash. Which statement is true?

An economic curse because I had to spend money on new shoe laces that could've been saved or spent on anything else

One of my shoelaces snapped recently. This was

observing price changes

One of the most important ways people learn how to adjust their actions to changing economic reality is by

$10,000

One penny taken from each of one million people will be _____________ in total

Are counted in GDP

Only goods sold in the country, rather than imported goods from France, for example,

Add to GDP

Only new goods, rather than used goods,

Wastes

Representatives from the Federation of American Cheese Producers have spent $2 million meeting with legislators in order to persuade them to adopt cheese tariffs. From the perspective of the entire society, this spending represents

not part of the labor force

Our nephew Carver recently turned nine months old. As befits someone in his position in life, he doesn't have a job. When gathering employment data, the Bureau of Labor Statistics would consider Carver

4

Over 140 years, GDP per capita in a country growing at 2% per year will double _____________ times

Increase

Over the years, federal regulations have added administrative responsibilities and reporting requirements that makes doctors lives more burdensome. Holding everything else constant, these regulations will ________________ doctors' incomes

Higher wealth and the profit motive

Over time, job safety has increased mainly due to

Larger and more complicated

Over time, the government has become

fundamental difference between economic systems

Ownership and control over the means of production is the

More wasteful than paying in money

Paying in time is

Rise, rise

Pens and pencils are substitutes. If pen prices rise, the equilibrium price of pencils will __________________ and the equilibrium quantity of pencils will ___________________

Anti-Market Bias

People don't trust decentralized, impersonal markets as ways of solving social problems

Anti-Foreign Bias

People don't trust foreigners and seem to think the laws of economics break when we cross national borders

They expect to be made better off as a result

People enter into voluntary exchange because

Shorter, less

People in "growth disaster" countries live ____________ and ____________ happy lives

Financial intermediaries

People rely on _________________ to bridge the gap between savers and borrowers

Underestimate

People tend to ______________ the benefits of dealing with people from foreign countries

Overestimate, underestimate

People tend to ________________ the economy's troubles and _________________ the economy's progress

The wage is higher than the value of the best alternative

People will be willing to supply every hour of labor for which

Higher

People with bad credit will pay ________________ interest rates

Below

Per capita income in the US in 1940 would be ________________ today's poverty line

Interest rate

Percentage of amount borrowed to be added to the amount loaned and paid back. Willing to lend $100 for a year at annual interest rate of 5% means you get back (100x0.05) for a total of $105

Fall

Perseus is willing to hunt Gorgons for $17 per hour. Athena is willing to pay $12 per hour to hire a Gorgon hunter. If Athena hired Perseus for $15 per hour, gains from trade would

extractive

Places with bad disease environments tended to develop ___________________________________ institutions.

monetary policy

Policy a central bank uses its control over the money supply to influence economic activity

longer, happier, and richer

Residents of "Growth Miracle" countries live lives that are __________________________________________ as/than residents of "Growth Disaster" countries.

Quota

Restriction on the quantity of goods that can be imported

Common law of torts

Risks that are hidden and that don't occur on the job are perhaps most ably handled by

1. surplus 2. Lost gains from trade (deadweight loss) 3. Wasteful increases in quality 4. A misallocation of resources

Price Floors create:

Leave resources in low value uses

Price ceilings

Misallocate resources

Price ceilings

Hurt more than they help

Price ceilings and price floors

Misallocation

Price ceilings lead to _____________ of resources

Outbidding lower value uses

Price control prevents highest value uses from

Dis-coordination in US markets

Price controls in the 1970s led to

Low-skilled teenagers

Price floors affect ________________ the most

Price ceilings

Price floors are less common than

Generate, aggregate, transmit

Prices ________________ information

Human capital

Professional opera singers have invested a lot of time and energy in ____________ that increases their earnings

I, II, and III

Property rights include I. The right to use something II. The right to give something away III. The right to any income accruing to the thing

The right to use some thing, the right to exclude others, the right to alienate an object

Property rights involve

Wastefully raising the quality of the flying experience

Rate regulation in the airline industry - binding price floors on airfares - encouraged firms to compete with one another by

Fluctuate around a long-run trend

Real GDP growth tends to

Remains unchanged

Real GDP per capita ________________ during recessions

7%

Real income per person grew by about ______ percent from 2001-2011

2%

Real per capita GDP has grown at about ____________ per year since 1800

Give money directly to people affected by the tornado

Recently, a tornado ripped through Fultondale, Alabama, and a lot of kind hearted people want to participate in the relief effort. Narrowly speaking, The most efficient way to help would be to

Decreases, increases

Relative to the free market equilibrium, a price ceiling ___________ price people are allowed to pay and ____________ the price people are willing to pay

Dissipate

Rent-seeking means that the increase in producer surplus from a policy like a tariff will

Higher

Societies that are open to creative destruction tend to have ____________ GDP per capita as/than societies that are not

The American economy is more productive than the Mexican economy

Someone who paints houses in Birmingham earns far more than someone who paints houses in Mexico City. This is because

Pick it up

Someone who values her time at $20 per hour and finds $100 on the sidewalk will almost certainly

Save

Someone who wishes to smooth consumption might ________________ in middle age

Dissave

Someone who wishes to smooth consumption might ________________ when old

Borrow

Someone who wishes to smooth consumption might ________________ when young

borrow when young, save when middle-aged, and dis-save when old

Someone who wishes to smooth consumption over time will

Shortages

Soon after President Nixon announced price controls in 1971, the US experienced

miracle, disaster

South Korea is a growth _________________________________________. North Korea is a growth ________________________________________.

Institutions

South Koreans have higher standards of living because they have better

Lower, higher

Speculators earn profits when they move resources from ______________ to ______________ value uses

Moving resources from where they are relatively abundant to where they are relatively scarce

Speculators serve society by

$2000

Steve currently has no job and gets $30,000 worth of welfare. If he gets a job, he will no longer be eligible for welfare. He is trying to decide whether or not to take a job that will pay him $32,000. If Steve takes the job, the benefit to him is

shares of ownership in a corporation

Stocks are

higher, riskier

Stocks earn a ____________________ return than bonds because they are __________________________.

It is in their best interest to do so

Students regularly arrive in Econ 201 with bags of food from Chick-fil-A. The farmers who raise the chickens that Samford students eat more of do so because

Increase

Subsidies _____________ the supply of a good

Stronger

Sugar farmers have _________ incentives to lobby Congress than/as sugar consumers

Total Producer Surplus

Sum of the producer surplus of each seller. Measured by the area above the supply curve and below the price

Other suppliers, demanders

Suppliers compete with ______________ to cooperate with ______________

higher than

Suppose Nike is more likely to default on its debt than Reebok. Holding everything else constant, this means the interest rate on Nike's bonds will be __________________________ the interest rate on Reebok's bonds.

It counts toward Brazilian GDP

Suppose a Canadian visitor to Brazil goes to a Chinese restaurant and orders a sandwich of Polish sausage and Swiss cheese on Italian bread with a side of french fries and a slice of German chocolate cake for dessert. Assume for simplicity that all the ingredients are made in Brazil. What is true about this transaction?

basically nothing

Suppose the COVID-19 related slowdown of the world economy raises the cost of logging in the US Pacific northwest, which in turn raises the cost of making paper products. Sarah will need to know ________________________________________ about the details of the logging industry in order to adjust her actions appropriately to this new reality.

4

Suppose two countries start with the same GDP per capita, but Country A grows at 2% per year while Country B grows at 3% per year. After 140 years, country B's GDP per capita will be ___________ times larger than country's A

Buying land far inland and then selling that land later

Suppose you are convinced in your heart of hearts that global warming will raise sea levels and wipe cities like Miami off the map. You might be able to profit by

Buy future contracts in wine that allow you to receive wine in the future at today's price

Suppose you believe that storms are going to wipe out the California grape crop, which will affect California wine production. How should you act so as to profit from your beliefs?

It depends on how much you value the second liter of Coke

Suppose you can go to Target and get a 1 L bottle of Coke for $1.50 or a 2 L bottle of Coke for $2. Which is the better deal?

For most students, the cost of learning the material on quiz three exceeds the benefits

Suppose you gave quiz three from this semester to a random sample of 100 Samford students. The average grade would almost certainly be an F. Why?

True

T/F: "output" is useful because when we produce more we can buy more of the things that really matter

False

T/F: "the problem is that there aren't enough kidneys to go around"

False

T/F: "when it comes to life-saving procedures like kidney transplants, the Beatles were right: all you need is love."

True

T/F: According to the "skilling" theory of education, schooling teaches you valuable skills like creativity and dealing with subtle social cues and contexts - how to be conscientious in all the right ways

True

T/F: According to the signaling theory of education, college is a signal that you can do something hard

True

T/F: According to the signaling theory of schooling, going to college is valuable because it certifies you as someone of high ability

True

T/F: Allie buys chicken with which to make chicken sandwiches for her friends. The chicken is counted as part of GDP

True

T/F: American wages are high because the economy is productive

False

T/F: Angora goat fleece is vital to national security

False

T/F: As a result of the 1970s price controls, cars got more coats of paint than they otherwise would have gotten

False

T/F: Banks are riskier than stock markets

False

T/F: Ben has been getting a $10,000 check from the government every year. He almost certainly will not notice or object if you try to eliminate this benefit

False

T/F: CD manufacturers starved to death because of the diffusion of MP3s and streaming services

False

T/F: CFA buys chicken with which to make chicken sandwiches. The chicken is counted as part of GDP

False

T/F: China is growing faster than the United States because Chinese institutions are superior

False

T/F: Consumption, government purchases, and investments are affected by similar forces

True

T/F: Cookie Monster from Sesame Street has high time preference

False

T/F: Every individual labor supply curve is always and everywhere upward sloping

False

T/F: GDP counts non-market household production

True

T/F: GDP does not account for pollution

True

T/F: GDP per capita is correlated with UN human development Index

True

T/F: GDP per capita is correlated with happiness

True

T/F: GDP per capita is correlated with life expectancy

False

T/F: Greedy intentions mean bad social results

False

T/F: Holding everything else constant, a more dangerous job will pay less

True

T/F: If a country imposes a tariff that does not completely eliminate international trade, that country's government will earn revenue from the tariff

True

T/F: In order to obtain someone's vote, a candidate will need to adopt positions close to that person's vote

True

T/F: In response to price controls on chicken in the 1970s, it was no longer profitable for farmers to feed many of their chicks and raise them to maturity

False

T/F: Innovation has reduced the fraction of people working on farms. Therefore, all the former farmers starved to death

False

T/F: Jobs are the benefit of economic activity

False

T/F: Nominal GDP in China for 2018 has been estimated at $14 trillion. Nominal GDP in the US for 2018 has been estimated at about $20 trillion. Standards of living in China are on the verge of catching up with standards of living in the US

True

T/F: One of the major risks associated with the "national security" argument for protection is that it is especially susceptible to political manipulation

True

T/F: Paraphrasing the economist Henry George, when we impose trade restrictions we seek to do to ourselves in time of peace what other countries seek to do to us in times of war

True

T/F: The components of the national spending approach include consumption, investment, government purchases, and net exports

True

T/F: The market demand for labor is given by the sum of all firms' demand curves for labor

True

T/F: The opportunity to ship corn to Japan in exchange for cars makes Americans better off, on net

False

T/F: Through international trade and immigration, foreigners take advantage of Americans

False

T/F: When prices are controlled, people stop competing with one another for scarce resources

True

T/F: When quantity demanded domestically exceeds quantity supplied domestically, we import the difference

True

T/F: When the government pops up insolvent banks, it keeps funds from flowing to those who will make the most of them

True

T/F: With a price ceiling, sellers can cut quality and still sell everything they want to sell at the controlled price

True

T/F: Workers' compensation rules mean firms have incentive to account for hidden risks

False

T/F: a capital good is not counted as part of GDP because it will be sold again as part of another good

True

T/F: a dollar that is physically close to you is worth more than a dollar that is physically far

True

T/F: a dollar you could spend building a factory right now is more valuable than a dollar one year from today

False

T/F: a dollar you have to wait for is worth more than a dollar you have right now

True

T/F: a high-risk job in Alaska will pay more than a low-risk job in the Gulf of Mexico

True

T/F: a little before writing this your professor got his hair cut at Wheelhouse Salon. This transaction was a finished service that will be counted in GDP

True

T/F: a minimum wage renders some mutually-beneficial labor arrangements illegal

False

T/F: according to the efficient markets hypothesis, you can systematically outperform the market on the basis of publicly available information

True

T/F: an interest rate helps us determine the value of future income

True

T/F: as average per capita income increases, we tend to see increases in the incomes of the very poor

True

T/F: banks specialize in matching borrowers with lenders

True

T/F: borrowing money to pay for a college education is an example of borrowing to finance investment (in human capital, in this case)

False

T/F: by now, we have invented everything that can be invented and can only look forward to stagnation and decline

True

T/F: compared to workers in many other countries, workers in the US have a lot of human Capital

True

T/F: compared to workers in many other countries, workers in the US have a lot of physical capital

True

T/F: decentralizing power can help remedy the problem of political ignorance by making it easier for people to vote with their feet rather than their ballots

False

T/F: economists complain when businesses are making money solving a problem

True

T/F: economists complain when businesses aren't making money solving a problem

True

T/F: economists use GDP to measure the growth of an economy over a period of time

True

T/F: economists use GDP to measure the size of an economy at a point in time

True

T/F: eliminating sugar imports renders illegal some trades that would have made both suppliers and demanders better off

True

T/F: environmental regulations tend to have differential standards for already existing sources of pollution and newly entering sources of pollution

True

T/F: financial intermediaries like banks allow people to share risk

True

T/F: firms have an incentive to increase job safety

True

T/F: firms hire workers because workers increase their revenues

False

T/F: for a country with a lot of capital, most investment will be creating new capital rather than replacing worn out capital

True

T/F: for a country with relatively little capital, most investment will be creating new capital rather than replacing worn out capital

False

T/F: goods Americans produce and then sell abroad are not counted as part of US GDP

True

T/F: goods produced in foreign countries are not counted as part of US GDP

True

T/F: holding everything else constant, it is better to have a common disease rather than a rare disease

It's actually ambiguous because there is value in safety, but having to put on a mask is cumbersome and inconvenient

The dry erase markers I use in class smell terrible and are likely to emit fumes that are dangerous in large concentrations. Suppose that, as a result, the Occupational Safety and Health Administration begins requiring that economics professors wear special masks to combat the fumes. Holding everything else constant, this means

Protectionism

The economic policy of restraining trade through tariffs, quotas, or other regulations that burden foreign producers but not domestic producers

Grow

The economy of Midgard is in steady state when there is an increase in the saving rate. During the transition to the new steady state, output will __________________________.

not change

The economy of Midgard is in steady state when there is an increase in the saving rate. Once the economy reaches the new steady state, output will ___________________________ from year to year.

higher, higher

The economy of Midgard is in steady state. A change in tax policy increases the saving rate. This leads to ___________________________ steady state capital stock and _________________________ steady state output.

A shortage

The equilibrium interest rate is 15% and Congress passes a law limiting the interest rate to 10%. This will cause ___________________ in the market for loanable funds

The most important

The first unit of capital gets allocated to ___________ task

Land, labor, physical Capital

The five proximate causes of economic growth include

Fallen

The fraction of people in earth who live in extreme poverty has ___________ in recent years

Lower

The fraction of the worlds population living in extreme poverty is _________________ than it was in the 1990s

Nothing. The house was counted in 2018 GDP

The house we occupy was built in 2018. If we sell it this year, what will happen to GDP? Focus only on the house and not on the ancillary services provided by real estate agents and others

Paradox of thrift

The idea that when people save more and spend less, output falls

Marginal product of labor

The increase in a firm's revenues created by hiring an additional laborer. Declines as more labor is used. Firms will hire as long as marginal product of labor > wage

Marginal product of labor

The increase in revenue from adding an additional unit of labor is the

Substantial and serious unemployment

The increase in the minimum wage in Puerto Rico in 1938 led to

Socially wasteful because people wouldn't have been willing to pay for them had prices been free

The increases in quality due to airline price regulation were

The interest rate times the present value

The interest a bond earns will be

Fall

The interest rate on a zero-coupon bond rises from 10% to 25%. The value of the bond will

I, II, or both

The interest rate will change if ________________ for loanable funds changes. I. The supply curve II. The demand curve

Compound interest

The interest that money earns also earns interest

has a comparative advantage in violence

The key feature of the state is that it

Nearly 0

The likelihood that you will cast the decisive vote in a presidential election is

Present value

The lower the interest rate, the higher the

Higher wealth and the profit motive

The major cause of increases in job safety has been

Higher wealth and the profit motive

The major causes of increases in job have been

Higher than

The marginal product of capital in a country with little capital is ________________ the marginal product of capital in a country with a lot of capital

Decreasing

The marginal product of capital is

Demand curve for labor

The marginal product of labor gives us the

Rise

The marginal value of an apartment to a prospective renter is $605. It's marginal cost to a prospective landlord is $599. Gains from trade would ___________ if the apartment were to be rented for $600

Will sit empty

The marginal value of an apartment to a prospective renter is $605. It's marginal cost to a prospective landlord is $599. With a binding price ceiling of $500 per month, the apartment

research and development spending for terbium substitutes will likely increase

The mineral terbium is used to make iPhones. If the price of terbium rises,

Profits

These tell people they are moving resources from lower value to higher value uses

worse-off

Think about how we have used supply and demand to analyze international trade. As a result of a tariff on broccoli, American producers now make a pound of broccoli that cost them $4.00 to produce and sell it for $4.50. American consumers would have been able to get the broccoli for $3.75 with free trade. On net, Americans - producers and consumers - are

more

This is a Susan B. Anthony dollar that I pulled out of my desk drawer at Samford while writing this question. Holding everything else constant, it was worth _______________________________________ as/than a Susan B. Anthony dollar in my change jar at home.

No one

This weekend, people will go to grocery stores and gift shops around the world and buy chocolates for their sweethearts. Who is "in charge" of the market for chocolate and ensuring that the market for chocolate reaches equilibrium?

Basically nothing

To adjust her behavior to new production conditions in Colombia, Sarah needs to know _____________________ about Colombian agriculture

Human capital

Tools of the mind, the stuff in people's heads that make them productive (requires investment, training, education)

Investment good

Tractor: Considered a finished good because while it is used to produce a finished good (corn) it does not become part of the finished good. Not gonna be sold again for something else

The troops will find work in other parts of the economy

Trump has announced plans to withdraw more than 4,000 US troops from Afghanistan. Think back to Frederic Bastiat: if these troops are discharged from the army and taxes are cut, what does Bastiat expect to happen?

cannot, can

Two people ________________ use the same hammer at the same time. Two people ____________ use the same idea at the same time.

Moving goods from low value to high value uses

Walmart creates value for its shareholders by

$25

Walter grows corn, which he sells to Thomas for $10. Thomas then grinds the corn and sells it to Abraham for $15. Abraham packages the cornmeal and sells it to Sadie for $16. Sadie bakes it in the corn bread, which she sells to Warren for $20. Warren sells the corn bread and his restaurant for $25. All told, this adds __________ to GDP

Dead weight loss

Wanda worker lives in Massachusetts and is willing to work for $8 per hour and Emily employer would be willing to pay $10 per hour for her services. The minimum wage is $12.75 per hour. The non-bargain between Wanda worker and Emily employer is an example of

30

We produce 100 units of output and invest 30% of it. Investment is ___________ units

$100 in your pocket

We shot these videos in 2014. Which would have been worth more when we were shooting the video: a $100 bill in my pocket or the promise that I would receive $100 when writing this question?

Overvalue, undervalue

We tend to ________________ information that supports our preexisting political views and _______________ information that contradicts them

Would have created value and been counted in GDP; would have created value but not been counted in GDP

We tried to take our dog to a pet groomer to have her nails trimmed. They didn't have a record of our appointment, so we ended up doing it ourselves. If the groomer has done it as part of a market transaction, it ______________________. If we did it ourselves and there was no market transaction, it _________________________.

Constant

We will assume that depreciation increases at a _______________ rate

Present value

What a promised payment is worth right now is the

Future value

What a promised payment will be worth in one year is the

Access to waterways

What do many major cities have in common?

They represent hours of labor that are worth more to employers than employees' best alternatives, but they aren't hired at $6/hour

What do you know about the hours of labor between 14 and 16 million? Quantity is in millions of hours of labor

It is wasted

What happens to the area x (transfer) as a result of cheese producers lobbying to get congress to impose tariffs on foreign cheese?

nonrivalrous

When you used what you have learned this term to answer the previous question, you didn't prevent others from answering it by using up the knowledge. This is because ideas are __________________________.

Producer surplus triangle

Where are the gains from trade on the graph that go to workers if there were no minimum wage?

Top triangle

Where is consumer surplus on the graph?

Top and bottom triangle on y-axis

Where is total surplus on the graph?

Middle 2 boxes on y-axis

Where is wasteful trade on the graph?

I, II, III

Which are examples of "bootlegger and Baptist" political coalitions? I. Car seat manufacturers and safety conscious mothers pushing for stricter car seat safety standards II. Teachers unions and concerned parents seeking greater certification standards for schools III. Tobacco companies and public health advocates looking to outlaw vaping

The dollar at your feet

Which dollar is worth more: a dollar at your feet or a dollar 100 yards away?

I and II only

Which is an example of a bootlegger and baptist coalition that might obstruct innovation? I. Sugar growers and public health advocates protesting the introduction of a new artificial sweetener II. Liquor store owners and religious leaders objecting to a law that would allow grocery stores to sell liquor III. Economics professors asking Congress to pass a law requiring anyone who teaches macroeconomics at the high school or college level to have a PhD in economics

Defense

Which is the largest item in the government budget?

Physical capital, human capital, technological knowledge

Which of the following are among the proximate or immediate causes of economic growth?

II and III only

Which of the following are attributes of capitalism as we have defined it? I. exploitation II. private property III. free labor

Dependable legal system, political stability, honest government, competitive and open markets, property rights

Which of the following are institutional sources of economic growth?

2 and 3 only

Which of the following is a transaction cost? 1. Grinding trees into wood pulp 2. Measuring the quality of wood pulp 3. Identifying wood pulp buyers

Political stability

Which of the following is among the ultimate causes of economic growth?

Flour you buy at the grocery store with which to bake cookies at home

Which of the following is counted in 2019 US GDP?

E) none of the above

Which of the following is counted in US GDP? A) a new video game made in China but purchased in the US B) New growth in rainforests C) a new quilt made by Jane and given to her grandmother for her 80th birthday D) a & c only E) none of the above

C) a drill purchased by a construction company

Which of the following is counted in US GDP? A) used car purchased by a student for his commute to school B) used oven purchased by a baker for her cake shop C) drill purchased by a construction company D) b & c only E) none of the above

Facism

Which of the following is economic nationalism?

all of these are attributes of property rights

Which of the following is not one an attribute of property rights? I. the right to use II. the right to exclude III. the right to earn income IV. the right to alienate (i.e., give something away or sell it)

Human capital

Which of the following is one of the proximate causes of economic growth?

Wages

Which of the following is the largest component of GDI (calculated using the factor income approach)?

I, II, and III

Which of the following makes it difficult to compare GDP across long periods of time? I. Changing prices II. Changing technology III. Changing quality

None

Which of the following would be counted in GDP? I. A used copy of a textbook you bought at the bookstore II. A used copy of a textbook you bought at a garage sale III. A used copy of a textbook you bought at a thriftstore

Organization

Which of the proximate (or immediate) factors of production brings the other factors of production together?

$1000 right now is the better deal

You are trying to decide between $1000 right now and $1100 two years from today. If the interest rate is 5%,

I, II, and III

Which of these are examples of the "bootlegger and baptist" coalition? I. Public safety advocates and barbers who wants strict licensing for barbers II. Environmental activists and firms that wish to regulate new factories III. Bootleggers who wish to sell illicit liquor and preachers who wish to end drinking

Selective incentives, individual benefit, group size

Which of these factors will help us predict who cleans up after a party?

There isn't one

Which single human mind has all the knowledge necessary to make a peanut butter and jelly sandwich?

Walmart

Which was more important to 1990s productivity growth in the US: Walmart or Silicon Valley?

Is rational because California Assembly Bill No. 5 is unlikely to ever have a noticeable effect on my life

While writing this quiz, I did a quick Google search for "lobby day " and found out about the California Psychological Association's efforts and support of Assembly Bill No. 5. I knew nothing about this bill or the Association before it came up in a Google search. I don't plan to learn anything else about it after I finish writing the quiz. In this respect, my ignorance

No one

Who gets the value of the time people spend waiting in long lines for price-controlled gas?

No single individual or agency

Who has all the knowledge necessary to make a waffle at Waffle House?

Steve and the seller

Who is made better off if Steve buys a PlayStation 5 from an eBay seller for $1399.95?

Lisa

Who is the better risk: Bart the ne'er do well or Lisa the honor student?

No one

Who knows which industries are crucial to long-run economic growth?

The American economy is more productive

Why do American janitors earn so much more than Indian janitors?

They ultimately want goods and services in return

Why do workers in Vietnam, China, and elsewhere work long hours to make us shoes?

Anti-market bias

Why don't voters approve of traceable emission permits?

Intermediate good

Winds up being part of a finished good. Flour, egg, and sugar used to make cake, the finished good

Quantity demanded exceeds quantity supplied

With a price ceiling,

Lower than

With a random allocation of goods, gains from trade will be _____________ a market allocation of goods

$30

With one hour of labor, Zaxby's can produce 100 sandwiches that they can sell for $1 each. With two hours of labor, Zaxby's can produce 150 sandwiches that they can sell for $1 each. With three hours of labor, Zaxby's can produce 180 sandwiches that they can sell for $1 each. What is the value of the marginal product of the third hour of labor?

Random

With respect to the price of a stock, new information is

No one

With the development of tractors and other kinds of agricultural technology, who knew what people moving out of agriculture would do next?

Drive the price up

Without a price ceiling, a shortage would

0

Without new ideas, the Solow growth model predicts that output will grow at a rate of ________% per year

it is impossible for a socialist government to know if they are using resources wisely or wastefully

Without prices, profits, and losses,

prices

Without private property rights in the means of production (land, labor, capital), __________________________________________ are not reliable.

Finished good

Won't be sold again as part of a finished good. A cake

They want goods and services in return

Workers in Canada work long hours producing oil and lumber to sell to Americans because

20

Y = (2)square root of K. If the capital stock is 100, output is

45

Y = 3 x the square root of K. If the capital stock is 225, the output is

10

Y = square root of K. If the capital stock is 100, output is

20

Y = square root of K. If the capital stock is 400, output is

8

Y = square root of K. If the capital stock is 64, output is

GDP for 1975

Yesterday, the used copy of Individual Freedom I ordered from Amazon arrived in my mailbox. The book was published in 1975 in Westport, Connecticut. The book is part of

The dollar in your pocket right now

You're at an airport. Which can be spent more easily: a dollar in your pocket right now, or a dollar in your sock drawer at home?

Time preference

Your willingness to wait to get a dollar in a year rather than a smaller amount of money now will be determined by your

70

_________% of research and development in the US is funded by the private sector

Nominal GDP, real GDP

______________ is not adjusted for inflation. ________________ is adjusted for inflation

Concentrated, dispersed

_______________ benefits and ________________ costs help explain why societies adopt inefficient policies

Real, nominal

________________ GDP accounts for inflation. _________________ GDP does not

Organization

________________ brings together technological knowledge and factors of production

Prices

________________ efficiently and effectively directs resources toward where they have the highest value

Profit

________________ is income that goes to entrepreneurs who exercise good judgment

Consumption

________________ is the largest component of GDP

Creative destruction

________________ refers to innovation that eliminates some opportunities and gives birth to others

Borrowers

_________________ are on the demand side of the market for loanable funds

Savers

_________________ are on the supply side of the market for loanable funds

A financial intermediary

_________________ bridges the gap between savers and borrowers

Physical capital

_____________________ refers to the tools we use to produce finished goods and services.

Fascism

_______________________ describes an economy where the means of production are owned privately but controlled by the government.

Socialism

________________________ describes an economy where the means of production are owned and controlled by the government.

Human Capital

___________________________ refers to knowledge of how to do things.

The value of workers' best alternatives

________________________________ determines the supply of labor

Profits

____________________________________________ are the part of national income that gets paid to entrepreneurs who exercise good judgment.

Socialism

__________________________________________________ is a system in which the government owns and controls the means of production.

"Investors cannot systematically beat the market trading on the basis of publicly available information"

__________________________________________________________________ is an implication of the Efficient Markets Hypothesis.

Condorcet Paradox

demonstrates that the winners of majority rule elections will change as a function of the order in which alternatives are proposed