Econ Prep Chapter 1-4

Potential GDP per person​ ______.

grows at a steady pace but not at a constant pace

Jack's opportunity cost of producing a ton of apples is ___ than Stephen's, so Stephen ___ gain from specialization and trade with Jack. Jack ___ an absolute advantage in the production of apples and grapes

higher than; can has

The opportunity cost of any action is

the highest−valued alternative given up.

Which of the following is​ correct? Factors of production are

the inputs used to produce goods and services.

On the diagram shown above, a movement from A to C represents __________.

an increase in demand

The U.S. GDP per capita in 2013 was approximately __________.

$50,000

The relationship between two variables that are unrelated can be shown by​ ______.

a vertical line

The money price of a pack of frozen waffles is ​$1.50​, and the relative price of a pack of frozen waffles in terms of ramen is 2.50 boxes of ramen noodles per pack of frozen waffles. The money price of a box of ramen noodles is​ _______.

$0.60

The table gives data about an economy in 2014. The value of GDP in 2014 is​ ______.

$1,213 billion

Your employer has asked you to start working overtime and has offered to pay​ $18 per hour for every hour you work beyond forty hours a week. The wage rate for each of the first forty hours will continue to be the usual​ $15 per hour. In terms of​ dollars, what is the marginal benefit of working each hour of​ overtime?

$18.00

During a​ year, a​ firm's net investment is ​$1,600 and depreciation is ​$400. The​ firm's gross investment is​ ______.

$2,000

The equilibrium price is​ ______.

$250.00 per ticket

Becky​, an eeconomics ​student, buys four cups of coffee a​ day, which costsher ​$12.00. She decides to buy one more cup each day andher expenditure on coffee increases to ​$15.00. The marginal cost to Becky of a cup of coffee is​ _______.

$3.00

In​ 2013, real GDP per person was​ ______ per year lower than it would have been with no growth slowdown in the 1970s.

$31,000

An economy produces only digital​ cameras, chocolate​ bars, and watches The table gives the quantities produced and prices in 2013 and 2014. The base year is 2013. What is real GDP in 2014 in terms of the​ base-year prices? Real GDP in 2014 in terms of​ base-year prices is ___

$43

A south sea island produces only coconuts. In​ 2011, the price of a coconut is ​$2.50 and the quantity produced is 300. In 2012​, the price of a coconut is ​$3.50 and the quantity produced is 350. 2011 is the reference base year. Real GDP in 2012 in terms of​ base-year prices is​ ______.

$875

Aggregate income in an economy in 2014 is ​$995 billion. Saving is ​$25 billion and imports are ​$30 billion. Aggregate expenditure in the economy in 2014 is​ ______.

$995 billion

1) What is the marginal cost of producing the 2 millionth hot​ tub? 2) The marginal cost curve is upward sloping because​ _______.

1) 12 2) resources are not all equally productive in all activities

In the above graph, which of the following formulas is the correct expression for the slope of the line between points a and b?

(Y2 - Y1) / (X2 - X1)

What is the value of the slope of this line?

-1 /5

If Y = 800 - 4X, what is the slope of this line?

-4

Suppose that demand increases by 50 downloads a day and supply decreases by 100 downloads a day. What is the new equilibrium price of a movie download and what is the new equilibrium quantity of movie​ downloads? 1) A new equilibrium price is ___ per download 2) The new equilibrium quantity if ___ downloads per day.

1) $2.00 2) 650

Elizabeth owns a​ take-out counter. In an hour she can produce 40 sandwiches or 40 wraps. Ben also owns a​ take-out counter. In an hour he can produce 20 sandwiches or 10 wraps. 1) ​Elizabeth's opportunity cost of 1 sandwich is​ ______. Ben's opportunity cost of 1 sandwich is​ ______. 2) ___ has a comparative advantage in sandwiches and ____ has an absolute advantage in both goods.

1) 1 wrap; 0.5 wrap 2) Ben; Elizabeth

1) What is Sam's opportunity cost of milkshakes? 2) What is​ Amy's opportunity cost of​ milkshakes? 3) Who has the absolute advantage in​ milkshakes, Sam or Amy​? 4) Who has the absolute advantage in​ fries, Sam or Amy​? 5) Who has the comparative advantage in​ milkshakes, Sam or Amy​? 6) Who has the comparative advantage in​ fries, Sam or Amy​? 7) Who should you assign to make​ milkshakes, Sam or Amy​? 8) Suppose Sam and Amy agree to specialize and trade. Which of the following would be a trade price that would benefit both of​ them?

1) 2 2) .4 3) Amy 4) Sam 5) Amy 6) Sam 7) Amy 8) None of these would be acceptable to both of them.

Emma owns an ice cream parlor. In an hour she can produce 21 milkshakes or 84 ice cream sundaes. Bonnie also owns an ice cream parlor. In an hour she can produce 7 milkshakes or 21 ice cream sundaes. Calculate Emma​'s and Bonnie​'s opportunity cost of a milkshake. ​3) _____ has a comparative advantage in milkshakes and​ ______ has an absolute advantage in both goods.

1) Emma's opportunity cost of 1 milkshake is 4 ice cream sundaes 2) Bonnie's opportunity cost of 1 milkshake is 3 ice cream sundaes 3) Bonnie; Emma

Ezra and Debra grow turnips and potatoes. 1) Ezra has a comparative advantage in producing turnips if ____. 2) If Ezra also has an absolute in growing turnips and potatoes, he will

1) Ezra's opportunity cost of producing turnips is less than Debra's opportunity cost of producing turnips 2) be more productive than Debra

From the fourth quarter of 2016 to the fourth quarter of 2017, nominal GDP increased by 4.4 percent. From the fourth quarter of 2016 to the fourth quarter of 2017, real GDP increased by 2.2 percent 1) Which had the faster growth​ rate, nominal GDP or real​ GDP? 2) Why did nominal GDP have the faster growth rate.

1) nominal GDP 2) Because prices increased

1) A decrease in the price of a raw material of production. 2) The price of a complement in production falls. 3) The price of a good rises and other influences stay the same. 4) The price of a good is expected to rise in the future. 5) The number of suppliers of a good increases. 6) Advances in technology lower the cost of producing existing products. 7) The weather that year is particularly perfect for agriculture.

1) shift right 2) shift left 3) movement up 4) shift left 5) shift right 6) shift right 7) shift right

1. To describe preferences, economists use the conceptual of marginal benefit. 2. The marginal benefit from a good or service is the benefit received from consuming one more unit of it

1. and 2. are correct statements

When the quantity of food produced is 1.5 tons a​ day, the marginal cost of producing a ton of food is __ barrels of ethanol.

10

The night before a midterm​ exam, you decide to go to the movies instead of studying for the exam. You score 60 percent on your exam. If you had studied the night​ before, you'd have scored 70 percent. What was the opportunity cost of your evening at the​ movies?

10 percent off your grade.

Aaron normally spends four nights studying for his biology test and his current grade in the course is 65 percent. He decides to spend five nights studying for his next biology test and his grade after that test rises to 75 percent. The marginal benefit to Aaron of studying one more night for his biology test is​ _________.

10 percentage points

The table above indicates the demand schedules for four types of consumers: A, B, C, and D and the number of consumers in each group (top row). The quantity demanded by each type of consumer (QA, QB, QC, and QD) is shown for market prices ranging from $10 down to $4. What is the combined quantity demanded at a market price of $4?

10,400

Are either or both of these newspaper headlines positive or normative​? 1. Our planet is warming because we burn too much coal. 2. Flex-time, which allows employees to shift their work hours over a two dash week period, will allow workers to better meet family needs. Statement 1 is a​ ______ statement because it​ ______ be tested. Statement 2 is a​ ______ statement because it​ ______ be tested.

1: positive; can 2: normative; cannot

The figure shows Cindy​'s PPF. Cindy currently produces 10 bags of fudge and no candies. If Cindy decides to produce 1 bag of candies, her opportunity cost of the bag of candies is​ _______ of fudge.

2 bags

Using information in the previous table, what is country A's opportunity cost of producing 1 unit of clothing?

2 units of food

The previous table shows the marginal benefit that Ted earns from keeping his store open one more hour. Ted has a marginal cost of $90 per hour. How many hours should Ted stay open?

22 hours

At 2013​ prices, the value of production in 2014 was 2 percentage points higher than in 2013. At 2014​ prices, the value of production in 2014 was 4 percentage points higher than in 2013. The​ chained-dollar real GDP is​ ______ in 2014 than in 2013

3 percent greater

The table shows the marginal benefit from pizza and the marginal cost of pizza in terms of soda forgone. If​ ______ pizzas are​ produced, the quantity of soda that people are willing to give up to get an additional pizza is equal to the quantity of soda that they must give up to get that additional pizza.

30

When Kim and Liam move from spending 30 minutes of each hour producing pies and 30 minutes producing cakes to specializing in the good in which they have a comparative​ advantage, the total gains from trade are​ ______ pies and​ ______ cakes.

30; 100

Oakdale achieves allocative efficiency if​ _______.

4 batches of cookies an hour are produced

The money price of a pound of bananas is ​$0.60 and the money price of a half gallon of milk is ​$2.40 The opportunity cost of a half gallon of milk is ____. The relative price of a half gallon of milk is an opportunity cost because ____.

4.00 pounds of bananas, which is the relative price of a half gallon of milk the relative price tells us how many pounds of bananas we must give up to get a half gallon of milk

Eric has been spending six nights studying for his physics tests and his current grade in the course is 75 percent. He decides to take a​ part-time job and study only five nights for his next test. As a​ result, after his next​ test, his grade falls to 70 percent. The marginal cost to Eric of working one night a week is​ _______.

5 percentage points

If they share the total gains​ equally, Kim gives Liam​ ______ and Liam gives Kim​ ______.

50 cakes; 15 pies

If the price of an amusement park ticket falls from ​$80 to ​$20​, while all other influences on buying plans are​ unchanged, the quantity of amusement park tickets demanded changes from​ _____ to​ _____.

6 million; 24 million

The graph shows the marginal cost of producing stuffed animals and the marginal benefit from stuffed animals in Oakdale. Oakdale achieves allocative efficiency if​ _______.

6 stuffed animals an hour are produced

The equilibrium quantity of milkshakes is ___ a day

650

Valued at the market exchange​ rate, GDP per person in the United States in 2013 is​ ______ times that in China. Valued at purchasing power parity​ prices, real GDP per person in the United States in 2013 is​ ______ times that of China.

7.9; 5.4

Ann currently produces cookies and bread at point A in the graph. Ann​'s marginal cost of producing an additional unit of cookies is​ _______.

8 units of bread

Refer to the previous graph. What is the best descriptor of the relationship between disposable income and consumption spending?

A positive relationship

In the previous graph, the solid line can be expressed algebraically as Y = a + bX. What causes the line to shift from the solid line to the dashed line?

A change in the value of a

___ earns ____

A coal deposit; rent

______ good is an item that is bought by its final user during a specified time period. ​______ good is an item that is produced by one​ firm, bought by another​ firm, and used as a component of a final good or service.

A final; An intermediate

___ is an example of a good ___ is an example of a service

A golf ball A haircut

When you think of an arrangement or institution that brings buyers and sellers of a good or service together, what are you thinking of?

A market

Which of the following goods and services would be excluded from personal consumption expenditures in the Bureau of Economic Analysis (BEA) statistics?

A new house

(Upward Sloping Graph) The graph shows ______.

A positive relationship becoming steeper.

Choose the statement that is incorrect.

A rational choice will turn out to have been the best choice after the event.

​_______ is an example of​ _______.

A sewing machine in a Levi's production plant; capital

Which of the following will cause an outward (rightward) shift in supply?

A technological improvement.

According to the graph, at what point does the economy begin a period of recession?

After the peak

The following statements are about economic coordination. Choose the statement that is false.

All economic activity is coordinated by markets.

What kind of efficiency are we achieving when we are producing at a point of the PPF that we prefer above all other​ points:

Allocative

Two​ countries, Alpha and​ Beta, have identical production possibilities frontiers. If Alpha produces at point A and Beta produces at point B​, then​ _______.

Alpha consumes less than Beta​ today, but it will grow faster than Beta

Two​ countries, Alpha and​ Beta, have identical production possibilities frontiers. If Alpha produces at point A and Beta produces at point B​, then​ _______.

Alpha consumes less than Beta​ today, but it will grow faster than Beta

Which of the following is consistent with the law of supply?

An increase in the market price of MP3 players causes an increase in the production of MP3 players.

Two​ countries, Antarctica and Arctica​, produce only two​ goods: frozen fish and party ice. The table gives their production possibilities. ​_______ has a comparative advantage in frozen fish and​ _______ has a comparative advantage in party ice.

Antarctica; Arctica

How does the Bureau of Economic Analysis of the U.S. Department of Commerce measure GDP?

By adding the value in dollar terms of all the final goods and services produced domestically.

Choose the statement that is incorrect.

Canada has the world's highest HDI value

What kind of economic system relies on private ownership of​ resources, direct incentives and decisions made via markets and the price​ mechanism?

Capitalism

In what type of economy does the government decide how most economic resources will be allocated?

Centrally planned economy

Ms. Boulware is the best lawyer and the best secretary in town. She has:

an absolute advantage in both jobs

Choose the correct statement.

Choices that are the best for society as a whole are said to be in the social interest

Claire and Doug are farmers who produce beef and corn. Use the question facts to answer the following question. To maximize their total output of beef and corn​ _______.

Claire specializes in beef and Doug specializes in corn

In the above graph, which of the following combinations is unattainable with the current resources available in this country?

Combination G

According to the economic way of thinking, people:

Compare costs and benefits and make a choice to achieve the greatest benefit over the cost for the person making the choice.

Which is the largest component of GDP?

Consumption

In the graphs shown, which country has a comparative advantage in the production of shirts?

Country B

What are the four goals of any economic​ system?

Efficiency, equity, stability, growth

Choose the correct statement.

Entrepreneurs bear the risk of business decisions.

Hire factors of production Organize factors of production to produce and sell goods and services

Firms

In the above graph, which of the following combinations of pies and cakes is unattainable given the existing resources?

Four cakes and seven pies

Comparing the data for the fourth quarter of 2017 with that for the second quarter of 2012, how has GDP changed?

GDP has decreased.

In the circular flow model, which of the following refers to markets where goods such as computers or services such as medical treatment are offered?

Goods markets

Choose the statement that is incorrect.

Governments can make better decisions by using the tools of economics, but businesses require the tools of business administration, not economics

In the previous series of graphs, which graph shows a negative and increasing relationship between X and Y?

Graph C

Olivia and Helen produce afghans and quilts. The figure shows​ Olivia's production possibilities​ frontier, PPFO​, and​ Helen's production possibilities​ frontier, PPFH. Olivia and Helen can achieve gains from trade if​ _______.

Helen sells afghans to Olivia in exchange for some of the quilts that Olivia produces

Since​ 1969, economic growth in​ ______ has been greater than in​ ______ because​ ______.

Hong Kong; the United States; the ratio of production of consumption goods to production of capital goods is greater in the United States than in Hong Kong.

In the circular flow model, who supplies factors of production in exchange for income?

Households

​_______ choose the quantities of​ labor, land,​ capital, and entrepreneurship to sell or rent. ​_______ choose the quantities of factors of production to hire.

Households; Firms

Macroeconomics focuses on which of the following topics?

How do we produce the products?

Which of the following questions is a microeconomics​ question?

How would a tax on Internet trading affect eBay?

Which of the following is TRUE regarding real​ GDP? I. Real GDP is the value of the total production of the​ country's farms,​ factories, shops, and offices. II. Real GDP rises whenever inflation occurs. III. Real GDP does not measure all that is produced.

I and III

Assume the cost of aluminum used by soft-drink companies increases. Which of the following correctly describes the resulting effects in the market for canned soft drinks? I. The demand for soft drinks decreases. II. The quantity of soft drinks demanded decreases. III. The supply of soft drinks decreases. IV. The quantity of soft drinks supplied decreases.

II and III

Which of the following is a positive economic statement?

If minimum wage rates rise, then unemployment will rise.

Scarcity​ - be it in​ time, talent, or money​ - forces all of us to make choices. But according to​ economists, those choices can be influenced. What do choices respond​ to?

Incentives

Choose the statement about incentives that is incorrect.

Incentives create scarcity

What kind of efficiency do we achieve when we produce goods and services at the lowest possible​ cost?

Production

Which of the following best defines capital as a factor of​ production?

Instruments, machines, and buildings used in production.

Which of the following are not counted as final goods and used in the GDP calculation?

Intermediate goods

Consider the previous figure and assume that it is the market for health-care services. When the "baby boomer" generation retires, the number of people who require health care increases by 30%, and, as a result, the number of health-care providers also increases, but by only 25%. What is the effect on the price of health-care services over time

It increases because demand increased by more than supply.

Which of these is not a shortcoming of GDP as a measure of standard of living?

It only counts final goods and services and not intermediate goods.

Who is Chairman of the Board of Governors of the Federal​ Reserve?

Janet Yellen

Which of these covers the study of topics such as inflation and unemployment?

Macroeconomics

When production is​ efficient, ______.

Mario's can produce more pasta only by producing less pizza

Choose the correct statement.

Market prices and factor cost diverge because of indirect taxes and subsidies.

Facilitate trade Enable​ buyers/sellers to get info and do business with each other

Markets

Martha can produce 90 quilts or 180 batches of chocolate chip cookies in a month. Jane can produce 6 quilts or 18 batches of chocolate chip cookies in a month. ______ has a comparative advantage in quilts. ​______ has a comparative advantage in chocolate chip cookies.

Martha; Jane

Which of the following countries has an economy where most of the resource allocation is determined by a central planning authority?

Microeconomics

Kelly is an​ architect, and she is trying to decide whether to hire​ Mike, a​ draftsman, to assist with her work. Kelly could hire Mike at​ $20 per​ hour, but it would take him three times as long to complete a task as it takes Kelly. Kelly is able to earn​ $90 per hour and has more architectural jobs than she is able to handle. Which of the following is​ true?

Mike should be hired at the​ $20 per hour wage rate.

Anything accepted as a means of payment Makes trading efficient

Money

Refer to the previous graph. Which of the following best represents the situation in which BMW must face a trade-off between producing SUVs and producing hybrids?

Moving from point B to point C

Choose the correct equation.

Net investment + Depreciation = Gross investment

An economy produces only​ robots, pens, and pizza. The table gives the quantities produced and prices in 2012 and 2013. The reference base year is 2012. What is nominal GDP in 2012 and in​ 2013?

Nominal GDP in 2012 is ​$23. Nominal GDP in 2013 is ​$125.

Choose the correct statement.

Nominal GDP is just a more precise name for GDP.

How many variables are involved in explaining the movement from Point A to Point C on this graph?

One

Refer to images A, B, & C. These represent what type of graphs?

One variable graphs

What is the name given to the highest-valued alternative that must be given up to engage in any activity?

Opportunity cost

The supply curve passes through the point​ (0,350​) and has slope equal to 2. The equation of the supply curve is​ _______.

P=350+2QS

The y​-axis intercept of the demand curve is 55 and the slope is −9. The equation of the demand curve is​ _______.

P=55-9QD

The equation of the demand curve that you have drawn is​ ______.

P=6-2QD

The y​-axis intercept of the demand curve is 65 and the slope is −10. The equation of the demand curve that you have drawn is​ _______.

P=65-10QD

A demand curve passes through the point ​(0,700​) and has slope equal to −2. The equation of the demand curve is​ _______.

P=700-2QD

The y​-axis intercept of the supply curve is 75 and the slope of the supply curve is 9. The equation of the supply curve is​ _______.

P=75+9QS

According to the graph, which point represents an efficient use of resources?

Point C

According to the graph, which point represents an inefficient use of resources?

Point F

Choose the statement that is incorrect.

Potential GDP per person grows at a constant rate.

In a market system, which of the following provides the information that individuals need to make decisions about resource allocation?

Prices

Jobs alone are not the measure of economic​ well-being. If this were the​ case, then we could increase the​ well-being of an economy by giving highway workers spoons rather than backhoes and garment workers needles and thread instead of computerized sewing machines. What does provide the source of high living​ standards?

Production of goods and services people value.

Govern ownership​ & use of things people value Provide incentive to​ specialize/produce

Property Rights

What are copyrights designed to accomplish?

Protect intellectual property rights

Gustavo graduates from college and his income increases by ​$20,000 a year. Nothing else changes. Gustavo decreases the quantity of ramen noodles and chocolate chip cookies that he buys and increases the quantity of winter vacations that he buys. For Gustavo​, ​_______.

Ramen noodles and chocolate chip cookies are inferior goods

Which phase of the business cycle is characterized by decreasing levels of real GDP?

Recession

Choose the option that is an example of government expenditure.

Secret service protection for the President.

Explain how the following headlines concern​ self-interest and the social​ interest: 1. Staples​, a U.S. office supply stor​e, is opening in Europe and McDonalds is expanding in India 2. All automobiles must be fitted with seat belts

Staples and McDonalds make decisions in their self-interest. Seat belts are in the social interest, but people decide whether to wear them in their self-interest.

Choose the correct statements. 1. We measure the marginal benefit from a good or service by the least that people are willing to pay for an additional unit of it. 2. We calculate marginal benefit from the slope of the PPF. 3. The marginal benefit from a good or service is the benefit received from consuming one more unit of it. 4. We measure the marginal benefit from a good or service by the most that people are willing to pay for an additional unit of it.

Statement 3 and 4 are correct

Choose the correct statements about competitive markets. 1. A competitive market has many buyers. A competitive market has many buyers. 2. A competitive market has many sellers. A competitive market has many sellers. 3. All competitive markets are physical places where buyers and sellers meet. All competitive markets are physical places where buyers and sellers meet. 4. In a competitive market, prices are eventually driven down to zero.

Statements 1 and 2 are correct

Choose the correct statements about competitive markets. 1. A competitive market has many sellers. 2. A competitive market has many buyers. 3. A competitive market must be a global market. 4. A competitive market is a market for goods but not for services.

Statements 1 and 2 are correct

Choose the statement that is incorrect.

The Lucas wedge equals real GDP minus potential GDP

People are willing to give up 12 tacos per pizza if only 1 pizza is​ available; 7 tacos per pizza if 3 pizzas are​ available; and 3 tacos per pizza if 5 pizzas are available. Choose the correct statement.

The basic reason why marginal benefit decreases as we consumer more of a good is that we like variety.

An economy produces only digital​ cameras, chocolate​ bars, and watches. The table gives the quantities produced and prices in 2013 and 2014. The base year is 2013. What is the​ chained-dollar real GDP in​ 2014?

The chained-dollar real GDP in 2014 is $35

An economy produces only leaf​ blowers, lollipops, and jigsaw puzzles. The table gives the quantities produced and prices in 2013 and 2014. The base year is 2013. What is the​ chained-dollar real GDP in​ 2014?

The chained-dollar real GDP in 2014 is $47

An economy produces only cell​ phones, pens, and pizza. The table gives the quantities produced and prices in 2013 and 2014. The base year is 2013. What is the​ chained-dollar real GDP in​ 2014?

The chained-dollar real GDP in 2014 is $58

Which of the following is not a possible opportunity cost of attending college?

The cost of housing

In his 1776 book, "An Inquiry into the Nature and Causes of the Wealth of Nations," Adam Smith notes that specialization increases productivity. Which of the following was the cause of this phenomenon?

The division of labor

The price at which no one is willing to buy a good is ​$150 per unit. As the quantity demanded of the good increases by one​ unit, the maximum price that someone is willing to pay for that unit decreases by ​$5. What is the equation for this demand​ curve?

The equation of the demand curve is P=150-5QD

The price at which no one is willing to buy a good is ​$900 per unit. If the demand curve passes through the point ​(4​,864​), what is the equation of the demand​ curve?

The equation of the demand curve is P​=900 −9QD.

The price at which sellers are not willing to supply a good is ​$125 per unit. As the quantity supplied of the good increases by one​ unit, the minimum price at which someone is willing to sell that unit increases by ​$6. What is the equation of this supply​ curve?

The equation of the supply curve is P=125+6QS

The price at which sellers are not willing to supply a good is ​$450 per unit. If the supply curve passes through the point ​(2​,462​), what is the equation of the supply​ curve?

The equation of the supply curve is P=450+6QS

What is the equilibrium price of a DVD rental​?

The equilibrium price is $4 a DVD rental

Which of the graphs represents a relationship between two variables?

The graph on the left

Which of the following items is an example of a​ tradeoff?

You spend more on textbooks and less on movies

Resource use is efficient when​ _______.

it is not possible to make someone better off without making someone else worse off.

Suppose that when you study 4 hours for an exam, your mark is 80 percent. If you study for an extra hour, your mark is 85 percent. Choose the correct statement.

The marginal benefit from studying one more hour is 5%

When most economists wake up in the​ morning, their first decision is whether or not to hit the snooze alarm. What statement best represents their thought process as a rational decision​ maker? ​ (How does an economist approach analyzing a situation like​ this?)

The marginal benefit of sleeping 10 more minutes is greater than the marginal benefit of 10 more minutes of work.

Every​ week, Kate plays tennis for two hours​, and her grade on each French test is 80 percent. Last​ week, after playing tennis for two hours​, Kate considered playing for another hour. She decided to play for another hour and cut her study time by one hour. But last​ week, her French grade fell to 60 percent. Given that Kate spent a third hour playing tennis​, what can you conclude about the marginal benefit and marginal cost of the second hour of playing tennis playing tennis​?

The marginal benefit of the second hour of playing tennis exceeded its marginal cost.

In the above graph, what move describes the impact of an increase in income on consumption?

The move from b to c

The table gives the demand and supply schedules for movie downloads. Suppose that demand increases by 100 downloads a day and supply decreases by 50 downloads a day. What is the new equilibrium price of a movie download and what is the new equilibrium quantity of movie​ downloads?

The new equilibrium price is ​$4.0 per download. The new equilibrium quantity is 700 downloads per day.

Consider the following statements about factors that influence the standard of​ living, and choose the statement that is incorrect.

The omission of household production from GDP means that GDP overestimates total production.GDP overestimates total production.

The market for corn is initially in equilibrium. Suppose that the production of biofuels, which use corn as an input, increase, and at the same time, increases in the price of oil cause farm production costs to rise. Which of the following explains the effect on equilibrium price and quantity in the corn market?

The price of corn will rise, but the effect on equilibrium quantity cannot be determined without more information.

Choose the option that is an example of government expenditure.

The purchase of airline tickets by Congress to send members to visit overseas troops

Which of the following is included in the economist's definition of investment?

The purchase of new machines, factories, or houses

Choose the correct statement.

The quality of labor depends on human capital.

Washington state had a bumper apple crop this year, significantly increasing the supply of apples in the U.S. Given this information, choose the statement that correctly describes the effect on the U.S. apple market.

The quantity of apples demanded will increase as the price of apples falls.

Which of these is a macroeconomic study?

The study of how fast prices in general are rising.

The graph above shows the market for laptop computers. Suppose the price of memory chips used in laptop computers decreases. How will this event impact on the equilibrium quantity and the market price?

The supply increases, causing the equilibrium quantity to rise and the market price to fall.

Suppose the current price of a printer is ​$6 and 4 million printers a year are bought. What do you predict will happen to the price of a printer​?

The surplus of printers forces the price down

Assume there are three variables involved in the previous graph: (1) price, (2) quantity, and (3) a third variable. Which of these variables cause a move from Point C to Point D in the graph?

The third variable

The table gives some of the items in the U.S. National Income and Product Accounts in 2012. What is the value of U.S. GDP​ (income approach) in 2012​?

The value of U.S. GDP​ (income approach) in 2012 is ​$15.3 trillion.

In 2012​, U.S. GDP using the income approach is ​$15.3 trillion and net domestic income at factor cost is ​$12.0 trillion. What is the value of indirect taxes less subsidies plus depreciation in 2012​?

The value of indirect taxes less subsidies plus depreciation in 2012 is ​$3.3 trillion.

In 2013​, U.S. exports were ​$2,260 billion and imports were ​$2,757 billion. What was the value of net​ exports?

The value of net exports in 2013 was -497 billion dollars

Which of the following statements is true about the value of the slope of this line?

The value of the slope is the same between points a and b and points c and d.

Which of the following is critical to the success of the market system?

To allow individuals or firms to have exclusive use of their property

Choose the correct statement.

To isolate the increase in production from the rise in prices, we distinguish between real GDP and nominal GDP.

The price change in the price of an amusement park ticket illustrates the law of demand in action

True

What is the fundamental fact of life from which all economic problems​ arise?

Wants cannot be satisfied with the available resources.

The table below shows the maximum output of wine and cloth that England and Portugal can produce under constant cost conditions. WINE CLOTH ENGLAND 150 140 PORTUGAL 110 70

What is the lowest possible price England will sell cloth​ for? 1.07 What is the highest possible price Portugal will pay for​ cloth? 1.571

Which of the following topics is NOT a macroeconomics question?

What will happen to the price of a computer as more firms produce computers?

Which of the following represents an inferior good?

When consumer income increases, the demand for bologna decreases.

If, as Miles's income increases​, his demand for magazines increases​, then for Miles​, magazines are ​_______.

a normal good

You and your neighbor pick apples and cherries. If you can pick apples at a lower opportunity cost than your neighbor can, which of the following is true?

You have a comparative advantage in picking apples.

You plan to go to school this summer. If you​ do, you​ won't be able to take your usual summer job that pays ​$8,000 for the summer. The cost of tuition is ​$1,000 and textbooks cost ​$200. You live with your​ family, which covers your living expenses of ​$1,800. What is your opportunity cost of going to school this​ summer?

Your opportunity cost of going to summer school is $9,200

​______ is an example of U.S. consumption expenditure.

Your purchase of a model car kit.

​______ is an example of U.S. consumption expenditure.

Your purchase of a tire for your car

In what type of economy does the government decide how economic resources will be allocated?

a centrally planned economy

All of the following will change the demand for onions except​ _______.

a change in the price of onions

We know that there have been shifts of both the demand curve for and the supply curve of a good. We also know that one end result of the changes in this market was that the equilibrium price of the good fell. Given this​ information, which combination of supply and demand changes could NOT have possibly​ occurred?

a decrease in supply and an increase in demand.

In the market for chocolate bars​, the supply of chocolate bars will decrease if any of the following occur except​ ______.

a decrease in the price of a chocolate bar

(Increasing Graph) The graph shows​ _______.

a direct relationship

When Nike decides to produce running shoes by using more labour and less capital​, it is answering​ ______ question. When Sony decides to produce computers rather than DVD players​, it is answering​ ______ question.

a how; a what

Which of the following is included in the measure of U.S.​ GDP?

a loaf of Wonder Bread produced and sold in the United States

Nominal GDP is​ ______. Real GDP is​ ______.

a more precise name for GDP; the value of finals goods and services produced in a given year when valued at the prices of a reference base year.

All of the following are examples of investment except​ ______.

a person depositing $100 a well to her savings account

All of the following are examples of investment except​ ______.

a person money adding money to his retirement fund.

The graph shows​ _______. An example of a relationship like this is the relationship between​ _______.

a positive relationship becoming less steep; study time and you GPA

An incentive is​ _______.

a reward that encourages an action or a penalty that discourages an action

The graph illustrates the market for tea. The market equilibrium is at point A. After one or more​ changes, the market equilibrium moves to point B. You predict that the market for tea was most likely influenced by​ _______.

a rise in household income and a rise in the number of plantations

You predict that the market for tea was most likely influenced by​ _______.

a rise in household income and a rise in the number of plantations

Which of the following​ --- by itself​ --- causes a decrease in demand for a certain​ good?

a rise in the price of some item that is a complement of the good

Resource use is efficient when​ _______.

a situation cannot be improved upon

Other things remaining equal, the law of demand says that higher prices will lead to:

a smaller quantity demanded and lower prices to a larger quantity demanded.

Economics is all of the following except​ _______.

a subject that tells countries what goods they must trade.

The condition that exists when quantity supplied exceeds quantity demanded at the current price is known as __________.

a surplus or excess supply

The outward shift of the production possibilities frontier from point A to point B in the above graph would most likely be caused by:

a technological advance that affects both the production of automobiles and aircraft carriers

All of the following will decrease the supply of airline flights except:

a technological change that makes airplanes safer and more fuel-efficient.

When a gym club chooses to spend more on cardio equipment and less on free weights, its choice illustrates ____.

a tradeoff

The use of purchasing power parity prices

accounts for differences in the prices of the same goods in different countries when measuring real GDP.

Potential GDP is

achieved when all factors of production are fully employed.

If​ Nike, an American​ corporation, produces sneakers in Thailand this would

add to Thailand's GDP but not to U.S. GDP.

Economists assume that when there is a change in demand and/or supply, that prices reach a new equilibrium:

after an adjustment period that varies.

Along this PPF​, the quantities of​ ______.

all goods other than pillows and quilts remain constant

Flour purchased by Chef Bondi to make pizza dough is an example of ____ good. Concrete purchased by Your Swimming Inc is an example of ___ good.

an intermediate; an intermediate

The equilibrium quantity​ _______.

and equilibrium price are determined at the intersection of the supply curve and the demand curve

A market is ___

any arrangement that enables buyers and sellers to get information and to do business with each other.

If OPEC is​ correct, the price change could have occurred as a result of demand changing because of​ ______ in the expected price of oil and supply changing because of​ ______ in the expected price of oil.

an​ increase; an increase

People make rational choices by comparing​ _______.

benefits and costs

According to the graph, which period of time is the economy generally considered to be in an expansion phase of the business cycle?

between points A and C.

An U.S. firm buys a new industrial sewing machine from a company located in France. Which of the following is​ true? I. U.S. net exports decrease. II. U.S. investment increases.

both I and II

The price of food increased during the past year. The law of demand applies to food because when the price of food​ rises, there is​ ______.

both a substitution effect and an income effect

The figure shows the production possibilities frontiers for two​ countries, Remus and Romulus in 1980. Production possibilities per person are smaller in Remus than in Romulus. Put a point on each curve and label the the curves. Between 1980 and​ 2015, economic growth occurred in both​ countries, so that production possibilities per person in Remus are now greater than production possibilities in Romulus. Since​ 1980, _______.

both countries have experienced economic​ growth, and growth in Remus has been more rapid than that in Romulus

Market price is determined by _________.

both supply and demand

Suppose that the United States and Cuba decide to open up trade. If each country specializes in the good in which it has a comparative​ advantage, ______ will gain from that trade because ​ ______.

both​ countries; consumption possibilities in both Cuba and the United States will lie outside their PPFs

The line (demand curve) shifts to the right due to a:

change in a third variable other than price or quantity of pizza

On the diagram shown above, a movement from A to B represents a:

change in quantity supplied.

The value of exports of goods and services minus the value of imports of goods and services is​ ______.

called net exports

Graphs are often used in economics because they:

can simplify complex topics

Marginal benefit from food crops​ _______.

cannot be calculated from the table

If demand and supply change in the same​ direction, we​ _____ the direction of change of the equilibrium quantity and we​ _____ the direction of change of the equilibrium price.

can​ predict; cannot predict

The income earned by the people who sell the services of the factor of production​ _______ is called​ _______.

capital; interest

Along a curve showing a linear​ relationship, for each increase in x of one​ unit, y​ _______.

changes by the same amount

Bottled water and health club memberships are​ _______.

complements

​If, as the price of onions increases​, the quantity of tomatoes that people buy decreases​, then onions and tomatoes are​ _______.

complements

If as the price of vitamin E increases​, the quantity of vegetable oil that firms plan to sell increases​, then vitamin E and vegetable oil are​ _______.

complements in production

​Low-fat milk and cream are​ _______.

complements in production for a dairy

A cellphone and a phone call are​ ______. A text message and an email are​ ______.

complements; substitutes

Pizza and sausage are​ ______. Wheat and rye are​ ______.

complements; substitutes

Real GDP​ ______.

does not include a measure of leisure time or environmental quality.

The expenditure approach to measuring GDP sums together​ ______, and the largest component is​ ______.

consumption​ expenditure, investment, government expenditure on goods and​ services, and net​ exports; consumption expenditure

To make comparisons of real GDP between two countries we must​ ______.

convert the real GDP of one country into the same currency units as the real GDP of the other​ country, and use the same prices to value the goods and services in the countries being compared

Which of the following are included in the income approach to calculating​ GDP?

corporate profits; depreciation; indirect taxes less subsidies

Read the news​ clip, then answer the following question. The news clip illustrates a change in the supply of flights when it reports that American Airlines is​ _______.

cutting the number of flights with no mention of a change in the airfare

Making a choice at the margin means​ ___

deciding to do a little bit more or a little bit less of an activity

Computers and DVDs are complements. If the price of a computer increases​, the demand for DVDs will​ _______.

decrease; and the demand curve for DVDs will shift leftward

Comparing the data for the fourth quarter of 2017 with that for the second quarter, how has consumption expenditure changed as a percentage of​ GDP? Consumption expenditure as a percentage of GDP has​ _______.

decreased

An increase in the price of onions ___.

decreases the quantity of onions demanded and results in a movement up along the demand curve for onions.

A rise in the wage rate of dairy workers​ ______ the supply of​ low-fat milk. A rise in the price of cream​ ______ the supply of​ low-fat milk.

decreases; increases

Da Vinci Code fans in Paris increased the​ ______ travel in Paris and increased the​ ______ restaurant meals and hotel rooms.

demand​ for; demand for

CNN commented on the​ "fierce competition from budget​ airlines." This competition decreases the​ ______ Eurostar travel because Eurostar and budget airlines are​ ______.

demand​ for; substitutes

In measuring changes in the standard of living of a country, economists rely heavily on comparisons over time of real GDP per capita because:

despite its well-known flaws, it is the best means we have of comparing the performance of an economy over time

As the value of a country's real GDP increases, the country is likely to:

devote more resources to pollution reduction

1. If you study for zero hours a day ​(x​ = 0) your grade point average ​(y​) is 1. 2. The more hours per day you​ study, the higher is your grade point​ average, but each extra hour brings a smaller and smaller increase in your grade. The curve you have drawn indicates a ____ relationship

direct

A rise in the price of low-fat milk ___ the supply of low-fat milk

does not change

With the period of low rainfall​ extending, dairies raise their expected price of​ low-fat milk next year. The supply of​ low-fat milk​ ______ today. With advice from​ health-care experts, dairy farmers decide to switch from producing​ full-cream milk to growing vegetables. The supply of​ low-fat milk​ ___.

does not change; decreases

An economy that uses new technology​ _______.

does not eliminate scarcity

Real GDP​ ______.

does not include a measure of leisure time or environmental quality

​Harry's PPF​ ______and his MB curve​ ______.

does not​ change; shifts rightward

This PPF ___ illustrate scarcity because ____.

does; the firm cannot produce points outside the frontier and as the firm moves along the PPF​, it cannot produce more dog biscuits without producing less cat food

When firms use new and better ways of producing all goods and services, ____

economic growth occurs, but it is not free

For the past​ year, Venus has played tennis three times a month. She now decides to play tennis four times a month. You infer that for Venus​, ​_______.

either the marginal benefit from a game of tennis has increased or the marginal cost has decreased.

The slope at a line tangential to the maximum or minimum of a nonlinear curve will always be equal to:

eliminate climate change

One of the first steps in deciding whether to complete your education is to:

evaluate the marginal cost and marginal benefit of that decision.

A typical business cycle can be described by the sequence​ ______.

expansion, peak, recession, trough

A typical business cycle can be described by the sequence​ ______.

expansion; peak; recession; trough

Net exports increase when​ ______.

exports decrease but imports decrease by more than the exports decrease

The goods and services that we sell to people in other countries are​ ______. The goods and services that we buy from people in other countries are​ ______.

exports; imports

Real flows are the flow of​ _______.

factors of production from households to firms and the flow of goods and services from firms to households

Producers of electric guitars expect the price of a factor of production used to produce an electric guitar to fall and the number of firms producing and selling electric guitars to increase. You predict that the price of an electric guitar will​ ______ and the quantity of electric guitars bought will​ ______.

fall; increase

Producers of electric guitars expect the price of a factor production used to produce an electric guitar to fall and the number of firms producing and selling electric guitars to increase. You predict that the price of an electric guitar will ___ and the quantity of electric guitars bought will ____.

fall; increase

The first sentence is completed by inserting the word ​ ___________. The manner in which recent weather conditions have affected the supply curve for corn is shown in the movement of supply from S to​ S' in the ​ _________ diagram.

fallen; first

​Consumers' actions indicate that airline tickets and hotel rooms are complements. Suppose that for some reason the price that airline companies pay to buy airplane fuel falls. As a result​ --- assuming all other relevant factors remain unchanged​ --- the price of airline tickets​ _____________, and the price of hotel rooms​ _______________.

falls; rises

​"As fewer people buy computers​, the demand for Internet service will decrease and the price of Internet service will increase. The rise in the price of Internet service will increase the supply of Internet service​." This statement is​ ______ because​ ______.

false; a decrease in demand for Internet service does not increase the price of internet service and an increase in the price of Internet service does not increase the supply of Internet service.

U.S. gross domestic product is the market value of all the​ ______ produced​ ______ in a given time period.

final goods and services; within the United States

The factor market can best be described as where

firms buy the services of labor, land and capital

Which of the following is a final​ good?

flour purchased at the store to bake cookies

​"Delta Airlines fails to reach deal with pilots​" involves a​ ______ question. ​"Scientists blast NASA program cuts​" involves a​ ______ question.

for who; what

Whether Sony gets a larger profit or its workers get higher wages is a ___ question

for whom

Two​ countries, A and B​, have identical production possibilities. The graph shows the PPF of these economies. The production possibilities of country B are growing faster than those of country A. The graph illustrates that the opportunity cost of economic growth is​ ______.

forgone current consumption

If the price of going to the movie theater falls by a large​ amount, you have an incentive to​ _______.

go to see more movies.

In the previous graph, the value of the slope is:

greater between points g and h than between points i and j

The law of supply states that other things remaining the​ same, the higher the price of a​ good, the​ _______; and the lower the price of a​ good, the​ _______.

greater is the quantity​ supplied; smaller is the quantity supplied

The table shows some data on the quantity of ice cream consumed at different prices and in different weather conditions. To draw a graph of the relationship between the quantity of ice cream consumed and the​ temperature, we must​ ______.

hold the prices of ice cream constant at any of the five levels shown.

We describe a point in a graph by its coordinates. The x​-coordinate gives the distance in the​ ______ direction from the​ ______ to the point. The y​-coordinate gives the distance in the​ ______ direction from the​ ______ to the point.

horizontal; y-axis vertical; x-axis

If we compare the four sources of spending in the economy we see that

household consumption is the largest

In the​ figure, flow B represents​ ________.

household purchases of goods and services

"Consultants replacing high school counselors" involves a ____ question.

how

Macroeconomics can be used to understand all of the topics listed below, except:

how a consumer decides between the purchase of two different cars

The market for gasoline is a competitive market​ _______.

if many people buy and many firms sell gasoline, so no single buyer or seller can influence the price

The graph shows the most recent U.S. business cycle. During​ 2012, the U.S. economy was​ ______.

in an expansion

Entrepreneurship​ ______.

includes people who come up wit new ideas about what and how to produce

A decrease in the price of vegetable oil​, a complement in production of vitamin E​, will​ ______ the equilibrium price of vitamin E and​ ______ the equilibrium quantity of vitamin E.

increase; decrease

Before starring as Tony Stark in Iron Man​, Robert Downey Jr. had played in 45 movies that had average​ first-weekend box office revenues of a bit less than​ $5 million. Iron Man grossed​ $102 million in its first weekend. The success of Iron Man ___ the opportunity cost of hiring Robert Downey Jr. Movie producers now have ____ incentive to h ire Robert Downey Jr.

increase; more

If the price of a cell phone rises from ​$20 to ​$80​, while all other influences on selling plans are​ unchanged, the quantity of cell phones supplied​ _______ .

increased from 2 million to 8 million

Da Vinci Code fans helped to raise​ Eurostar's sales because they​ ______ between London and Paris.

increased the demand for travel

A new technology lowers the cost of producing ice cream. The supply of low-fat milk ____.

increases

If the price of an amusement park ticket falls from ​$80 to ​$20​, while all other influences on buying plans are​ unchanged, the quantity of amusement park tickets demanded ____.

increases

The figure shows a scatter diagram. As the value of variable x​ increases, the value of the variable y​ _______.

increases

In the previous graph, the relationship between output produced and cost of production can best be described as the cost of production:

increases at a decreasing rate up to point a, then it increases at an increasing rate

The dots in this scatter diagram show that as the value of variable x​ increases, the value of variable y​ _______.

increases then decreases

Why does the PPF bow outward and what does that imply about the relationship between opportunity cost and the quantity​ produced? The PPF bows outward because as we move from point A to point B to point C​, the opportunity cost of producing a sweater ​______.

increases. Resources are not equally productive in all activities

The price of oil rises if the demand for oil​ ______ and the supply of oil​ ______.

increases; decreases

A dairy produces butter an ice cream. The marginal cost of producing each of these products increasing as more is produced. The dairy adopts a new technology that allows it to use fewer resources to make butter.

increases; equally

Harry's efficient time allocation ___

inreases

A demand curve _____

is a willingness-and-ability-to-pay curve

Economics:

is concerned with how people respond to incentives

Atlantis produces only coral beads and exotic shells. The table shows the marginal benefit and marginal cost schedules for exotic shellsexotic shells. If Atlantis produces 36 exotic shells​, the marginal benefit from exotic shells ​______ the marginal cost of exotic shells. To achieve allocative​ efficiency, Atlantis must​ ______ the quantity of exotic shells produced.

is less than; decrease

Human capital ​ _______.

is the knowledge and skill that people obtain from education, on-the-job training, and work experience.

The substitution effect influences food purchases because when the price of a certain food​ rises, other things remaining the​ same, ______. Consumers​ ______.

its relative price rises; purchase more of a different food that is less expensive.

A dog trainer is an example of the factor of production ____

labor

The resources provided by nature and used to produce goods and services are also known as:

land

Which of the following go​ together?

land; a city block in New York City

The opportunity cost of producing a loaf of bread is​ ______ at point A than at point B. The opportunity cost of producing a cake is​ ______ at point B than at point A.

less; less

In an​ hour, Jacob can catch 4 pounds of salmon or pick 8 pounds of cherries. In an​ hour, Sam can catch 4 pounds of salmon or pick 20 pounds of cherries. ...................................................................................... The opportunity cost of catching a pound of salmon is​ ______ for Jacob than for Sam​, and the opportunity cost of picking a pound of cherries is​ ______ for Jacob than for Sam. So​ ______ has a comparative advantage in producing​ ______.

lower; higher Jacob; salmon

Simon wants to go to a party at the frat house tonight and also to spend time doing his math homework. He thinks hard about how to allocate the evening between partying and doing homework and decides to spend the first 4 hours partying and then spend 2 hours doing homework. Simon​'s decision is an example of​ _______.

making a choice at the margin

You want to play the piano and read a good book. You think hard about how to allocate the next hour between playing the piano and reading and decide to play the piano for the first 30 minutes and then spend 30 minutes reading. Your decision is an example of​ _______.

making a choice at the margin

An economy produces protein shakes. If more than the efficient quantity of protein shakes is produced ​_______.

marginal cost exceeds marginal benefit.

Suppose a meticulous housekeeper cleans her house for 5 hours every day, but to prepare for company, she decides to clean for an extra hour. The​ _____ of one more hour of cleaning is​ _____.

marginal cost; an hour of watching Martha Stewart on TV, if that is her best alternate use of the time.

Gross domestic product (GDP) is best defined as the __________.

market value of the final goods and services produced within a country in a given time period

The GDP is a measure of the __________.

market value of the final goods and services produced within a country in a given time period

Luxury car makers announce a fall in next year's price of a luxury car and an increase in the ease in which credit can be obtained. You predict that the demand for luxury cars today​ _______.

might increase; decrease, or remain the same

An increase in the demand for computers together with an increase in the supply of computers ___ create a surplus or a shortage of computers at the original price. The price of computers ___.

might; might fall, rise, or not change

Factors of production include all of the following EXCEPT​ ____

money

When Apple Inc. expands and rents an adjacent building​, the flows are a​ ______ from firms to households and a​ ______ from households to firms.

money flow; real flow

When you buy an iPad from the Apple Store, the flows are a ____ from households to firms and a ____ from firms to households.

money flow; real flow

If the price of renting a DVD falls​, a​ ______ the demand curve occurs. If any factor that influences buying plans other than the price​ changes, then a​ ______ the demand curve occurs.

movement down along; shift of

If the price of a taco rises​, a​ ______ the supply curve occurs. If any factor that influences selling plans other than the price​ changes, then a​ ______ the supply curve occurs.

movement up along; shift of

The table gives information about the relationship between two​ variables, x and y. The relationship between x and y is​ ______ and the slope of the relationship​ ______ as x increases.

negative; remains constant

The $20 bill in your pocket is an example of​ ______ good. The waste basket you bought when you moved into residence is an example of​ ______ good.

neither a final nor an intermediate; a final

Second-hand blue jeans is an example of ____ good. Sugar purchased by Angelo's bakery to make pies and cakes is an example of ___ good.

neither a final nor an intermediate; an intermediate

Second-hand jeans is an example of​ ______ good. Sugar purchased by Angelo's bakery to make pies and cakes is an example of​ ______ good.

neither a final nor an intermediate; an intermediate

Which of the following are included in the expenditure approach to calculating​ GDP?

net exports of goods and services; consumption expenditure; government expenditure

If the president announced that "we should do something to stimulate economic growth" this is an example of a __________.

normative statement

Marginal benefit from a good or service is the benefit received from consuming​ ______. It is measured by the most that people are willing to pay for​ ______.

one more unit of​ it; an additional unit of it

in​ 2011, Ozzie purchased a 2008 Ford Escort from his neighbor for his​ son, purchased a 2007​ "one owner" Camry from Larchmont Toyota for his​ wife, bought a 2011 new Ford for​ himself, and sold his 2000 Dodge Caravan to his teenage nephew.​ Which, if​ any, of these transactions will be included in GDP in​ 2011?

only the purchase of the Ford

Which of the following statements are normative and which are​ positive? 1. Sweatshop labor in third-world countries does not help those economies grow. 2.When the inflation rate rises, the unemployment rate falls. 3. Drugs used to treat terminally ill patients should be free. 4. All fast-food restaurants should sell healthy-choice meals.

options 1 and 2 are positive, and options 3 and 4 are normative.

The law of demand states that​ ______, the​ ______ the price of a​ good, the smaller is the quantity demanded.

other things remaining the​ same; higher

Unattainable points are ___.

outside the PPF

Unattainable points are​ ______.

outside the PPF

The equilibrium price is the best deal available for both buyers and sellers because buyers​ ______ and sellers​ ______.

pay the highest price they are willing to​ pay; receive the lowest price at which they are willing to sell

The stock of computers, factory buildings and machine tools used to produce goods is known as:

physical capital

Aggregate expenditure in the United States is equal to consumption expenditure plus investment​ ______.

plus government expenditure plus net exports

Macroeconomics is concerned with all of the following except:

political party affiliation

The table gives information about the relationship between two​ variables, x and y. The relationship between x and y is​ ______ and the slope of the​ relationship______ as x increases.

positive; remains constant

Changes in what six things cause a shit of the demand curve?

preferences, related goods, future prices, income, future income, population

Read the news​ clip, then answer the following question. A shortage in the market for oil implies that​ ______.

price adjustments are being prevented from playing their role as the regulator of buying and selling plans

A change in ___ causes movement along demand curve and a change in ____.

price; quantity demanded

We achieve production efficiency if we​ _______.

produce goods and services at the lowest possible

Absolute advantage is the ability of an individual, firm, or country to:

produce more of a good or service than competitors using the same amount of resources

The production possibilities frontier is the boundary between those combinations of goods and services that can be​ _____ and those that​ ______

produced; cannot be produced

Harry produces 4 balloon rides and 7 boat rides an hour. Harry could produce more balloon rides without producing fewer boat rides. Harry is​ ______ his production possibilities frontier.

producing inside

Harry produces 22 balloon rides and 55 boat rides an hour. Harry could not produce more balloon rides without producing fewer boat rides. Harry is​ ______ his production possibilities frontier.

producing on

At the market equilibrium price:

quantity demanded equals quantity supplied.

In the United​ States, GDP is typically measured

quarterly

The GDP per capita is computed by dividing a country's:

real GDP by its population

The relationship between real GDP and potential GDP is that

real GDP fluctuates about potential GDP.

In a price system:

relative prices change constantly to reflect changes in supply and demand.

The amount paid each month by a car park operator to the owner of the land he uses is called​ _______.

rent

An increase in the demand for golf clubs brings a​ ______ in the price of golf clubs and​ ______ in the quantity of golf clubs supplied.

rises; an increase

When the increase in demand is less than the decrease in​ supply, the equilibrium price​ _____ and the equilibrium quantity​ _____.

rises; decreases

When a shortage​ arises, the price​ ______ to its​ equilibrium, which​ _______.

rises; decreases the quantity demanded and increases the quantity supplied

When the increase in demand is greater than the decrease in​ supply, the equilibrium price​ _____ and the equilibrium quantity​ _____.

rises; increases

When the increase in demand equals the decrease in​ supply, the equilibrium price​ _____ and the equilibrium quantity​ _____.

rises; remains unchanged

In​ 1998, the price of a barrel of oil was​ $20. In​ 2012, the price of a barrel of oil was​ $106. In​ 1998, the price of a loaf of bread was​ $0.86. In​ 2012, the price of a loaf of bread was​ $2.32. Between 1998 and​ 2012, the relative price of a barrel of oil with respect to a loaf of bread​ _______ and the relative price of a loaf of bread with respect to a barrel of oil​ _______.

rose; fell

Economics is the study of choice under conditions of:

scarcity

The principle of opportunity cost evolves from the concept of:

scarcity

An increase in the demand for pizza brings a​ ______ of pizza at the original price and the market price will​ ______ .

shortage; rise

In the previous diagram, when supply decreases, a __________ develops at the original price. Equilibrium price will __________ and equilibrium quantity will __________ as a new equilibrium is established.

shortage; rise; fall

The principle of increasing opportunity cost states that the more resources devoted to any activity, the __________ the payoff to devoting additional resources to that activity.

smaller

A relationship with a minimum _____.

starts out sloping downward, and then slopes upward

Choose the correct statement or statements. 1. Economists use natural experiments, statistical investigations, and economic experiments.experiments. 2. Ignoring details in an economic model makes the model inadequate for prediction. nothing 3.An economic model is more complex than the economic world it describes. nothing 4. An economic model is a description of some aspect of the economic world that includes only those features that are needed for the purpose at hand.

statements 1 and 4 are correct

​If, as the price of a taxi ride increases​, the quantity of bus rides that people buy increases​, then taxi rides and bus rides are​ _______.

substitiutes

Diet coke and regular coke are​ _______.

substitutes for consumers and substitutes in production for producers

Leather purses and leather shoes are​ _______.

substitutes in production

French fries and baked potatoes are​ _______.

substitutes or substitutes in production

SUVs and pickup trucks are​ _______.

substitutes or substitutes in production

Coal and oil are​ ______. A skateboard and an iPod are​ ______.

substitutes; complements

Pasta and pizza are​ ______. A video game and a laptop are​ ______.

substitutes; complements

Suppose that there is a substantial fall in the price of apples. Apples are​ (obviously) the major ingredient in apple juice. As a result of this​ event, the market for apple juice changes in this​ way: ​ ________________.

supply increases and price falls

In the previous diagram when the price is $65 per player, there is a _________ of _________ million players per month.

surplus; 40

A decrease in the demand for chocolate chip cookies together with an increase in the supply of chocolate chip cookies brings a ___ of chocolate chip cookies at the original price and a ___ in their price.

surplus; fall

An increase in the supply of donuts brings a​ ______ of donuts at the original price and a​ ______ in their price.

surplus; fall

The role of the entrepreneur always involves:

taking risks

A supply curve​ _______.

tells us the lowest price at which someone is willing to sell.

The graph shows​ _______.

that as the value of the variable measured on the x-axis increases, the value of the variables measured on the y-axis decreases

When you make a choice in your​ self-interest, _______.

that choice may also be the best choice for society.

Choose the definition that gives the best overview of economics. Economics is the social science that studies the choices​ _______.

that we make as we cope with scarcity

If Americans still worked sixty hour weeks, as they did in 1890, __________.

the GDP would be much higher than it is but the well-being of the typical person would not necessarily be higher

Read the news​ clip, then answer the following questions. According to the expenditure approach for calculating​ China's GDP,​ "each one percent drop in the U.S. economy will shave 1.3 percent off​ China's growth" because as the U.S. economy​ shrinks, ______. ​China's ______ and​ China's real GDP decreases.

the United States imports less from​ China; exports decrease

The quantity demanded of a good or service is​ ______.

the amount that consumers plan to buy during a given time period at a particular price

Leigh has three slices of pizza for lunch. The marginal benefit that Leigh receives from the third slice of pizza is​ _______.

the benefit she receives from eating the third slice of pizza

The cycle of short-term ups and downs in the economy is called:

the business cycle

A curve on a graph shows the relationship between apartment rent in a town and the quantity of apartments that people want at each rent. A new industry enters the town and the population of the town increases. When the population​ increases, _________.

the curve shifts

Events in the market for a particular good are such that the market​ (equilibrium) price and market​ (equilibrium) quantity of the good move opposite direction​ (i.e., price falls as quantity​ rises, ​ and\or price rises as quantity​ falls). It must therefore be true that​ _________.

the decisive event in the marketplace is shifting supply curve.

The expected price of an MP 3 player next year rises. As a​ result, _______.

the demand for MP3 players today increases

Given linear demand curves, if demand and supply both increase but demand increases by a greater amount than supply, then:

the equilibrium price and quantity both increase.

Given linear demand curves, if demand and supply increase by identical amounts, then:

the equilibrium price stays the same and the equilibrium quantity rises.

Given linear demand curves, if demand increases and supply decreases, then __________.

the equilibrium price will increase but the effect on the equilibrium quantity will be ambiguous

By remaining in​ school, you are paying an opportunity cost that includes​ _______.

the free time you could have every evening to watch movies.

The graph shows​ Brazil's PPF for ethanol and food crops. If Brazil increases production of food crops from 2 tons per day to 3 tons per​ day, the opportunity cost of the additional ton of food crops is 14 barrels of ethanol. If Brazil increases production of ethanol from 40 barrels per day to 54 barrels per​ day, the opportunity cost of the additional 14 barrels of ethanol is 1 ton of food crops. The opportunity cost of producing an additional ton of food crops is equal to​ ______.

the inverse of the opportunity cost of producing an additional barrel of ethanol

We observed a fall in the price of vegetable oil and an increase in the quantity of vegetable oil that producers sell. The most likely explanation is that​ ______.

the law of supply applies to vegetable oil​, but some other influence on selling plans has increased the supply of vegetable oil.

When GDP per person in China in 2013 is valued at​ ______, GDP per person in the United States is​ _______ times that in China.

the market exchange rate; 7.9

Leigh has two tacos for lunch. The marginal benefit that Leigh receives from the second taco is​ _______.

the maximum amount that she is willing to pay for the second taco.

Goods and services are​ ______.

the objects that people value and produce to satisfy human wants.

Marginal cost of a good is​ _______.

the opportunity cost of producing one more unit of it

Microsoft's marginal cost of the 100th copy of Microsoft Windows 8 is​ _______.

the opportunity cost of producing the 100th copy of Windows 8

Along the supply​ curve, _______.

the price changes but all other influences on​ producers' planned sales remain the same

All of the following scenarios depict the characteristics of substitutes except:

the price of bacon increases and the demand for eggs decreases.

All of the following scenarios depict the characteristics of complements except:

the price of coffee increases and the demand for cream increases.

A shortage in the market for oil implies that​ ______.

the price of oil is being prevented from influencing buying and selling plans

The income effect influences food purchases because when the price of a certain food​ rises, other things remaining the​ same, ______. Consumers​ ______.

the price rises relative to income; cannot afford to buy all the things they previously bought, so they normally buy less of the food that has experienced the price rise.

The maximum amount that people are willing to pay for the 4 millionth can of soda per day is 18 candies. The marginal benefit curve illustrates​ _______.

the principle of decreasing marginal benefit

Suppose the price of a bag of chips is 60 cents. To return to​ equilibrium, ______.

the quantity demanded decreases and the quantity supplied increases

A shortage occurs at a given price when​ ______. The price​ _____ to reach equilibrium.

the quantity demanded is greater than the quantity supplied; rises

If the price of a printer rises​, with all other influences on buying plans remaining the​ same, in the market for printers ​_______.

the quantity of printers demanded decreases

A relative price is​ _______.

the ratio of one money price to another

The point where economic activity bottoms out in a full business cycle is known as:

the trough

Real GDP is __________.

the value of final goods and services produced in a given year when valued at the prices of a reference base year

A curve on a graph shows the relationship between apartment rent in a town and the quantity of apartments that people want at each rent. If the rent​ rises, _________.

there is a movement along the curve

No matter what happens to the number of traffic accidents​, the quantity of asparagus produced is​ _______.

unaffected. If the quantity of asparagus produced is changing, it continues to change. If it is constant, it remains constant.

The slope of a straight line equals the change in the value on the __________ axis __________ by the change in the value of the other axis measured between any two points on the line.

vertical, divided

All economic questions arise because we

want more than we can get.

Allocative efficiency occurs when​ ______.

we are producing at a point on the PPF such that marginal benefit at the quantity produced equals marginal cost

Every​ day, we make many choices. We​ can't avoid having to make choices because​ ________.

we face scarcity

The what​, how​, and for whom questions in economics are questions about​ _____

what goods and services do we​ produce, how do we use the factors of production to produce these​ goods, and who consumes the goods and services that are produced

Economics explains the choices that end up determining ​ ______ goods and services get produced.

what, how, and for whom

An MP3 player is a normal good. If the price of an MP3 player rises​, you predict that the demand for MP3 players ​_______.

will remain unchanged

Harry would be​ ______ off getting a higher grade in economics because​ ______

worse; his marginal benefit from tennis would exceed his marginal cost

The vertical axis on a graph is also known as the:

y-axis

The graph shows the relationship between two​ variables, x and y. Which of the following equations describes this​ relationship?

y=-2x+40

The graph shows the relationship between two​ variables, x and y. This relationship is described by the equation​ _______.

y=20+4x

When you make economic choices to purchase goods and services​, ​_______.

you are making choices that are in your self-interest and possibly also in the social interest.

U.S GDP in 2017 is $19740 billion I calculated real GDP by summing the components of aggregate​ _____, so I used the​ _____ approach.

​expenditure; expenditure