Econ Quizzes 1-3 (Winter Quarter 2020)

The Law of Demand implies that there is an ----- relationship between the price of a product and the quantity demanded of a product, all else equal.

Inverse

A teachers' union has negotiated a new contract that increases teachers' pay considerably next year. How does this affect the opportunity cost for a teacher who is thinking of retiring at the end of this school year?

It increases the opportunity cost of retiring.

If store-brand cereal is an inferior good, then consumers will demand ----- of it as their income -----.

Less; rises

Because prices tend to increase annually, real GDP is usually ----- nominal GDP for any given year.

Lower than

In order for an economy to expand its PPC, which of the following must occur?

More resources must become available.

A graph with a line having a negative slope depicts what kind of relationship between two variables?

Negative

Critics point out that GDP omits which of the following?

Non-market transactions that produce value

Suppose Marcy paid her mother $10 to alter the blue jeans, and assume her mother is not a professional seamstress with a formal business. Then this money would ----- and GDP would -----

Not be included in GDP; remain the same

Which of the following must remain constant in order for the Law of Demand to be valid?

Number of consumers in the market

Which of the following costs is conceptualized as the value of the second best alternative that one must forego when choosing to use a resource in a certain way?

Opportunity Cost

Examples of complementary goods in consumption are...

Pencils and erasers

In the real flow, the ----- sector receives factors of production and the ----- sector receives goods and services.

Producer; consumer

If nominal GDP increases in the current year, then what can be said of real GDP?

Real GDP may increase, decrease, or stay the same.

Which of the following is not considered a factor of production?

Rent

Which of the following is the return to land employed in the production process?

Rent

If the price of a good X is set above the equilibrium price level, which of the following will be the likely result?

Surplus of good X

Given the Law of Supply, the supply curve is best described as a ----- line.

Upward sloping (from left to right)

Which question below is the most appropriate for macroeconomics?

What has been the trend in national unemployment levels in the last five years?

Marcy decides to take her new pair of blue jeans to a tailor shop to have them altered rather than ask her mom to do it. In total, she spends $10 to alter the blue jeans. This money -----

Will be included in the GDP

According to the expenditure approach to calculating GDP, which of the following equations represents total expenditure in an economy?

Y = C + I - G + (X-M)

Which of the following would you expect to be an example of a positive relationship between two variables?

Years of education and wage level

Suppose Country A has had a higher rate of inflation than Country B in the current year, and each had the same price level in the base year. Which of the following statements must be true?

The CPI for Country A will be larger than that of Country B.

The income approach to calculating GDP considers income from which of the following activities?

Rental income received by landowners and profits received by all firm owners; wages received by all laborers and interest income received by all depositors; taxes received by the government at all levels (All of the above)

Begalia is a small country with a population of 600 people, and there are 200 inhabitants who earn a wage of $100 per year. Each wage earner spends all their annual income, and about $5 of each laborer's income is spent on imported products. The country exports a total of $1,000 worth of goods. The government taxes the wage earners at a rate of 15 percent, and this money goes to maintaining infrastructure and supporting urban development. There is one industry in Begalia, and it spends $200 per year on new equipment. What is the GDP of Begalia.

$20,200

Gratalla produces only radishes and ball point pens, and the qualities produced and prices for each product in 2006 and 2007 are displayed in the table below. With 2006 as the base year, what is the real GDP in 2007?

$713

What is the slope of a curve if the variable on the x-axis increases by 10 and the quantity of the variable on the y-axis increases by 6?

0.6

Ted quits his job that pays $55,000 a year and dedicates his time to caring for his elderly father. As a result, Ted's father saves $25,000 a year by not having to employ a live-in nurse. What is the total effect on GDP?

A decrease of $80,000

An increase in business taxes will cause -----

A shift of the supply curve to the left

Which of the following will cause a shift in the supply curve of good Y?

An increase in the number of producers of good Y.

Real GDP increases as a result of -----

An increase in the total production of goods and services.

A positive economic statement is one that...

Seeks to describe and explain economic processes.

Orange juice and apple juice are substitute goods. An increase in the price of orange juice results in an -----

Increase in the demand for apple juice

The GDP of an economy may be measured by -----

Calculating either total expenditure on final goods or total income.

The ----- sector is usually the largest sector of any economy.

Consumer

A PPC of car engines and textbooks shows that as the amount of resources devoted to the production of car engines -----, there are ----- resources available for the production of textbooks.

Increases; fewer

According to the Law of Demand, the quantity demanded of a good/service ----- as the price of that good/service -----, everything else remaining constant.

Declines; rises

The Law of Supply implies that there is a ----- relationship between the price of a product and the quantity supplied of a product, everything else remaining constant.

Direct

Given the Law of Demand, the slope of the demand curve is best described as a ----- line.

Downward sloping (from left to right)

In macroeconomics, which of the following is considered as investment?

Expenditures on machinery, tools, equipment, construction, and inventories by producers

The basic resources required to produce goods and services

Factors of production

In the circular flow model...

Factors of production flow in the opposite direction as returns to factors of production.

Tennis shoes and socks are complimentary goods in consumption. When the price of socks increases, what happens with respect to the demand curve for shoes?

The demand curve for tennis shoes shifts to the left.

What will have to occur for market equilibrium to be restored if supply increases and demand remains unchanged?

The price will fall and the quantity of goods in the market will increase.

When a market is in equilibrium, this means that -----

The quantity supplied and the quantity demanded are equal

A point inside the PPC indicates which of the following?

There are some resources being left unused.