Econ Exam #1

Consumption expenditures do not include household purchases of ....

b) new houses

Refer to figure 2-4 Which of the movements listed above represent advancements in technology with respect to both plastic production and food production?

b) c only

Economics is the study of the ___ people make to attain their goals given their ____

b) choices; scarce

______ occurs when economic benefits are distributed fairly.

b) equity

The production possibilities frontier model shows that....

b) if all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good

The branch of economics which studies the behavior of entire economies and policies that affect the economy as a whole is called....

b) macroeconomics

At market equilibrium....

a) quantity demanded equalsnquantity supplied

Cassie's Quilts alters, reconstructs and restores heirloom quilts. Cassie has just spent $800 purchasing, cleaning and reconstructing an antique quilt which she expects to sell for $1,500 once she is finished. After having spent $800, Cassie discovers that she would need some special period fabric that would cost her $200 in material and time in order to complete the task. Alternatively, she can sell the quilt "as is" now for $900. What is the marginal cost of completing the task?

a) $200

Refer to table 8-13 Real GDP for Vieuna for 2016 using 2018 as a base year equals

a) $5,850 (could be wrong)

Refer to table 2-11, Suppose that France was producing 1 bottle of wine and 6 pounds of schnitzel, and Germany was producing 3 bottles of wine and 6 pounds of schnitzel before trade. What is the gain from trade from

a) 0 bottle of wine, 1.5 pounds of schnitzel

Refer to figure 2-11, Which two arrows in the diagram depict the following transaction: Carter earns a $400 commission for selling men's designer shoes at Brooks Brothers

a) J and M

Voluntary exchange increases economic efficiency....

a) because neither the buyer nor the seller would agree to a trade unless they both benefit

A(n) ________ is represented by a leftward shift of the demand curve while a(n) ________ is represented by a movement along a given demand curve.

a) decrease in demand, decrease in quantity demanded

Which of the following is motivated by an efficiency concern?

a) following a 6 month drought, a city banned homeowners from watering lawns in an effort to conserve water

Refer to figure 2-3, Sergio Vignetto raises cattle and llamas on his land. His land is equally suitable for raising either animal. Which of the graphs in the figure above represent his production possibilities frontier?

a) graph A

If nominal GDP rises we can say that ...

a) production has risen or prices have risen or both have risen

positive technological change in the production of LCD tv's caused the price of LCD tv's fall. Holding everything constant, how would this affect the market for Blu- ray players (a complement to LCD tv's)

a) the demand for Blue-ray players would increase and the equilibrium price of Blue-ray players would increase

Which of the following could cause nominal GDP to decrease next year, but real GDP to increase?

a) the price levels falls and the quantity of final goods and services produced rises

Refer to table 2-11, Suppose that France and Germany trade 3 bottles of wine for 7 1/2 pounds of schnitzel with each other. How many pound of schnitzel will Germany consume after trade?

a)75

Refer to figure 3-2, A decrease in the price of inputs would be represented by a movement from...

b) S1 to S2

The term "market" in economics refers to

b) a group of buyers and sellers of a product and the arrangement by which they come together and trade

Caroline is an artist. She purchases canvas, paints, brushes, and accessories for $75. She sells one of her original paintings to an art gallery for $1,500, even though an art lover would pay $4,500 for that painting. How much value does Caroline add?

b) $1,425

Refer to table 2-11, What is the opportunity cost of producing 1 pound of schnitzel in Germany?

b) 1/3 bottle of wine

If nominal GDP is $5 trillion and real GDP is $4 trillion, the GDP deflator is

b) 125

Pierre can produce either a combination of 20 bow ties and 30 neckties or a combination of 35 bow ties and 15 neckties. If he now produces 35 bow ties and 15 neckties, what is the opportunity cost of producing an additional 15 neckties?

b) 15 bow ties

A car that is produced in 2018 is not sold until 2019. According to the definition of GDP, in which year's GDP should be counted?

b) 2018

Refer to table 2-11, how many bottles of wine will be produced after specialization?

b) 4

Refer to table 3-1 The table above shows the demand schedules for Kona coffee of two individuals (luke and Ravi) and the rest of the market. At a price of $8, the quantity demanded in the market would be...

b) 44 lbs.

Refer to figure 3-4, At a price of $25, how many units will be sold?

b) 500

Refer to table 2-11, what country has a comparative advantage in the production of wine?

b) France

The value of what a U.S. owned Mcdonald's produces in South Korea is included in the U.S. _______and the South Korean ______

b) GNP, GDP

Refer to Table 2-3. Which of the following statements is true?

b) Jack has an absolute advantage in garden cultivating and George in lawn mowing

In September, buyers of silver expect that the price of silver will rise in October. What happens in the silver market along a given demand curve?

b) the demand curve shifts to the right

The concept of opportunity cost is that....

b) the economic cost of using a factor of production is the alternative use of that factor that is given

Which of the following is counted as "capital" in economics

b) the wealth people have

Refer to table 8-6, Consider the value of production and price statistics for a small economy in 2018. If the economy only produces the 4 goods listed below, what is the GDP for 2018? hint:price(quantity) add them all up

c) $428,000

In 2015, Hooverville consumed 205,000 tons of sugar. In 20016, sugar consumption rose to 245,000 tons. Calculate the % change in sugar consumption. hint: old price- new price /old price

c) 19.51%

Refer to figure 1-2, calculate the area of the triangle A

c) 3.15 million

Which of the following would result in GDP for an economy equal to $10 trillion? hint: C+I

c) C= $5 trillion I- $5 trillion G=$2 trillion NX= $2 trillion

Refer to figure 3-1, An increase in the price of a complement would be represented by a movement from...

c) D2 to D1

The output of U.S. citizens who work in Canada would be included in...

c) gross domestic product of Canada

The output of Mexican citizens who work in Texas would be included in the

c) gross national product of Mexico

In economics, the accumulated skills and training that workers have is known as....

c) human capital

In economics the term_____ means "additional" or "extra"

c) marginal

Refer to figure 3-7, Assume that the graphs in this figure represent the demand and supply curves for blue-ray discs. Which panel best describes what happens in this market if there is a substantial increase in the price of blue-ray players?

c) panel C

How does the increasing use of MP3 players affect the market for compact discs?

c) the demand for compact discs shifts to the left

Refer to figure 3-8, The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection D1 and S1 (point A) If the price of oranges, a substitute for apples, decreases and the wages of apple workers increases, how will the equilibrium point change?

c) the equilibrium point will move from A to E

Assume there is a surplus in the market for hybrid vehicles. Which of the following statements correctly describes the situation?

c) the price of hybrid automobiles will fall in response to the surplus; as the price falls the quantity demanded will increase and the quantity supplied will decrease

Cross Domestic Product is calculated by summing up....

c) the total market value of final goods and services produced in the economy during a period of time

Which of the following is not considered part of government purchases?

c) welfare benefits

Refer to figure 2-5, If the economy is currently producing at point Y, what is the opportunity cost of moving to point W?

c) zero

Refer to table 8-25, What is the level of disposable personal income for this economy?

d) $980 billion

Refer to table 2-11, What is the opportunity cost of producing 1 bottle of wine in France?

d) 2 pounds of schnitzel

Refer to table 2-11, Suppose that France and Germany trade 3 bottles of wine for 7 1/2 pounds of schnitzel with each other. How many bottles of wine will Germany consume after trade?

d) 3

Refer to figure 3-1, An increase in the price of the product would be represented by a movement from...

d) B to A

Which of the following is a normative economic statement?

d) Fashion designs should be allowed to copy write designs to promote innovations

When every good or service is produced up to the point where the last unit provides a marginal benefit to society equal to the marginal cost of producing it, ________ occurs.

d) allocative efficiency

Refer to figure 3-7, Assume that the graphs in this figure represent the demand and supply curves for noodles, an inferior good. Which panel best describes what happens in this market as a result of an increase in income?

d) panel D

Who, in a modern mixed economy, decides what goods and services will be produced with the scarce resources available in that economy?

d) the government, consumers, and producers

Refer to figure 3-8, The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection D1 and S1 (point A) If there is a shortage of apples, how will the equilibrium point change?

d) there will be no change in the equilibrium point