ECON131 Midterm Review

(1) Macroeconomics: A. is concerned with the expansion of a small business into a large corporation. B. is narrower in scope than microeconomics. C. analyzes mergers and acquisitions between firms. D. is concerned with the expansion and contraction of the overall economy.

Is concerned with the expansion and contraction of the overall economy

(1) Which of the following best denotes the reason for the existence of substantial black markets A. a market-oriented economy B. a command economy C. government laws and rules D. the microeconomy

A command economy

(1) Which of the following lies primarily within the realm of macroeconomics? A. a study of the demand for gasoline B. a study of how tax cuts stimulate aggregate production C. an analysis of supply and demand conditions in the electricity market D. a study of the impact of "mad cow" disease on the price of beef worldwide

A study of how tax cuts stimulate aggregate production

(1) In the circular flow diagram model: A. households receive income from businesses in exchange for providing inputs and use that income to buy goods and services from businesses. B. businesses receive revenues from households in exchange for providing goods and services and use those revenues to buy inputs from households. C. households receive revenue for selling goods and services to businesses, and use that revenue to buy inputs from businesses. D. Both (a) and (b) are correct.

Both a and b - Households receive income from businesses in exchange for providing inputs and use that income to buy goods and services from businesses - Businesses receive revenues from households in exchange from providing goods and services and use those revenues to buy inputs from households

(1) Macroeconomics primarily examines: A. the behaviour of individual households and firms. B. how prices are determined within individual markets. C. broad issues such as national output, employment and inflation. D. the output levels that maximize the profits of business firms

Broad issues such as national output, employment and inflation

(1) Which of the following best characterizes the circular flow of income? A. Businesses buy resources from the government, and households buy goods and services from businesses. B. Businesses buy resources from households, and households use their income from the sale of resources to buy goods and services from businesses. C. The government purchases resources from businesses and households and then sells goods and services to businesses and households. D. Households buy factors of production from businesses, and businesses buy goods and services from households.

Businesses buy resources from households, and households use their income from the sale of resources to buy goods and services from businesses

(1) In which of the following countries will the national government have the greatest influence with respect to the nation's economy? A. China B. Cuba C. Canada D. Chile

Cuba

(1) Which of the following statements most likely lies within the realm of macroeconomics? A. An increase in the price of automobiles will lead to a decrease in the quantity of automobiles demanded. B. Due to process innovations in computer chip manufacturing, the market supply of computers increased. C. Due to an economic recession, manufacturing firms began implementing layoffs of their workforces. D. Anticipating that the benefits would outweigh costs involved, an undergraduate student purchases the course textbook.

Due to economic recession, manufacturing firms began implementing layoffs of their workforce

(1) Regardless of whether you are looking through the microeconomics microscope or the macroeconomics telescope, the fundamental subject material of the interconnected ___ doesn't change A. market B. economy C. production D. firm

Economy

(1) The two main tools of macroeconomic policy include monetary policy, and fiscal policy, which involves ___ spending. A. business B. government C. household D. capital market

Government

(1) The basic difference between macroeconomics and microeconomics is that: A. microeconomics looks at the forest (aggregate markets) while macroeconomics looks at the trees (individual markets). B. macroeconomics is concerned with groups of individuals while microeconomics is concerned with single countries. C. microeconomics is concerned with the trees (individual markets) while macroeconomics is concerned with the forest (aggregate markets). D. macroeconomics is concerned with generalization while microeconomics is concerned with specialization.

Microeconomics is concerned with the trees (individual markets) while macroeconomics is concerned with the forest (aggregate markets)

(2) Philosophers draw a distinction between positive statements, which describe the world as it is, and ___s, which describe how the world should be. A. normative statement B. budget constraint C. trade-off D. opportunity cost

Normative statement

(1) In a discussion of economics, which of the following would exert the most influence on an individual firm's decision to hire workers? A. wage levels B. the macroeconomy C. the firm's income D. household income

The macroeconomy

(2) As depicted in ___, it is necessary to give up some of one good to gain more of the other good. A. the production possibilities frontier B. allocative efficiency C. scarcity D. utility

The production possibilities frontier

(1) Macroeconomic topics do not usually include: A. the profit maximizing decisions of an individual manufacturer. B. the rate of inflation. C. the rate of unemployment. D. economic growth.

The profit maximizing decisions of an individual manufacturer