Macro Econ proctored mid-term exam

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A to B

A decrease in the price of the product would be represented by a change from picture labeled question 38

B to A

A decrease in the price of the product would be represented by a change from picture labeled question 39

Marginal Revenue (MR)

A grocery store sells a bag of potatoes at a fixed price of​ $2.30. Which of the following is a term used by economists to describe the money received from the sale of an additional bag of​ potatoes?

a change in the price of toothpaste

A movement along the demand curve for toothpaste would be caused by

S1 to S2

A technological advancement would be represented by a movement from picture labeled question 50

what will be produced; how something will be produced

Allocative efficiency best explains​ ________, and productive efficiency best explains​ ________.

model

An economic​ ________ is a simplified version of some aspect of economic life used to analyze an economic issue.

D1 to D2

An increase in population would be represented by a change from picture labeled question 40

S2 to S1

An increase in price of inputs would be represented by a change from picture labeled question 48

an increase in the equilibrium price of​ lobster; the equilibrium quantity may increase or decrease.

An increase in the demand for lobster due to changes in consumer​ tastes, accompanied by a decrease in the supply of lobster as a result bad weather reducing the number of fishermen trapping​ lobster, will result in

economic growth

An outward shift of a​ nation's production possibilities frontier represents

What is the difference between an​ "increase in​ demand" and an​ "increase in quantity​ demanded"?

An​ "increase in​ demand" is represented by a rightward shift of the demand curve while an​ "increase in quantity​ demanded" is represented by a movement along a given demand curve.

What is the difference between an​ 'increase in​ supply' and an​ 'increase in quantity​ supplied'?

An​ "increase in​ supply" means the supply curve has shifted to the right while an​ "increase in quantity​ supplied" refers to a movement along a given supply curve in response to an increase in price.

the equilibrium price of MP3 players will​ increase; the equilibrium quantity will decrease.

Assume that the demand curve for MP3 players shifts to the right and the supply curve for MP3 players shift to the​ left, but the supply curve shifts more than the demand curve. As a result

Panel (c)

Assume that the graphs in this figure represent the demand and supply curves for frozen yogurt. Which panel describes what happens in the market for frozen yogurt when the price of ice​ cream, a substitute​ product, increases? picture labeled question 44

200

At a price of​ $10, how many units will be​ sold? picture labeled question 49

600

At a price of​ $20, how many units will be​ sold? picture labeled question 43

the government

Consider the following economic​ agents: a. the government b. consumers c. producers ​Who, in a centrally planned​ economy, decides what goods and services will be produced with the scarce resources available in that​ economy?

1/2 of a unicycle

Fred Barney Pogo Sticks 24 28 Unicycles 8 14 The table above shows the output per month of two​ people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. What is​ Barney's opportunity cost of making a pogo​ stick? picture labeled question 30

The table above shows the output per week of two​ jewelers, Serena and Haley. They can either devote their time to making bracelets or making necklaces. Which of the following statements is ​true?

Haley has a comparative advantage in making bracelets and Serena in making necklaces. picture labeled question 36

a shortage of gasoline

Hurricane Katrina damaged a large portion of refining and pipeline capacity when it swept through the Gulf coast states in August 2005. As a result of​ this, many gasoline distributors were not able to maintain normal deliveries. At the pre-hurricane equilibrium price​(i.e., at the initial equilibrium​price), we would expect to see

demand has increased

If a demand curve shifts to the​ right, then

zero

If the economy is currently producing at point Y​, what is the opportunity cost of moving to point W​? picture labeled question 32

A market is in equilibrium:

If the price is​ $20, picture labeled question 42

D1 to D2

If the product represented is a normal​ good, an increase in income would be represented by a change from picture labeled question 45

D2 to D1

If the product represented is an inferior​ good, an increase in income would be represented by a change from picture labeled question 47

linear

If the production possibilities frontier is​ ________, then opportunity costs are constant as more of one good is produced.

receive the most of what is produced

In a market​ economy, those who are willing and able to buy what is produced

the demand curve shifts to the right

In​ January, buyers of gold expect that the price of gold will rise in February. What happens in the gold market in​ January, holding all else​ constant?

D​ increases, S no​ change, P and Q increase

Let D​= ​demand, S​ = supply, P​ = equilibrium​ price, and Q​= equilibrium quantity. What happens in the market for walnuts if the Centers for Disease Control and Prevention announces that consuming a half cup of walnuts each week helps to lower bad levels of​ cholesterol?

S​ decreases, D no​ change, P​ increases, Q decreases.

Let​ D= demand, S​ = supply, P​ = equilibrium​ price, and​ Q= equilibrium quantity. What happens in the market for tropical hardwood trees if the governments restrict the amount of forest lands that can be​ logged?

If the economy is currently producing at point W​, what is the opportunity cost of moving to point X​?

5 million tons of paper picture labeled question 28

75 pounds of meat

Refer to the diagram to the right which shows the production possibilities frontier for​ Mendonca, an agrarian nation that produces two​ goods, meat and vegetables. Suppose Mendonca is currently producing 60 pounds of vegetables per period. How much meat is it also​ producing, assuming that resources are fully​ utilized? picture labeled question 35

technically efficient

Refer to the diagram to the right. Point B is Picture labeled question 29

outside Tomaso's production possibilities frontier

Refer to the table. Assume that​ Tomaso's Trattoria only produces pizzas and calzones. A combination of 36 pizzas and 30 calzones would appear picture labeled question 34

unlimited wants exceed limited resources

Scarcity refers to the situation in which

Graph A

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? picture labeled question 31

produce a combination of goods that lie outside its own production possibilities frontier.

Specializing in the production of a good or service in which one has a comparative advantage enables a country to do all of the following except

maximum attainable

The production possibilities frontier shows the​ ________ combinations of two products that may be produced in a particular time period with available resources.

Which of the following is a macroeconomic​ question?

What determines the growth rate of gross domestic​ product? What determines the inflation​ rate?

The tree fundamental question that any economy must address are

What goods and services to​ produce; how will these goods and services be​ produced; and who receives​ them?

product market

When you purchase a new pair of jeans you do so in the

There is often a trade-off between the two

Which of the following correctly describes the relationship between economic efficiency and economic​ equity?

there are many buyers and sellers?

Which of the following describes a characteristic of a perfectly competitive​ market?

Production managers are more concerned with satisfying​ government's orders than with satisfying consumer wants.

Which of the following is a problem inherent in centrally planned​ economies?

$1,000 in cash

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

At​ equilibrium, quantity demanded equals quantity supplied.

Which of the following is the correct way to describe equilibrium in a​ market?

Which of the following will shift the demand curve for a​ good?

a decrease in the price of a complementary good

Which of the following would cause an increase in the equilibrium price and an increase in the equilibrium quantity of​ watermelons?

an increase in supply and an increase in demand greater than the increase in supply

Which of the following would cause a decrease in the supply of peanut​ butter?

an increase the price of peanuts

economic models

are simplified versions of reality.

Comparative advantage means the ability to produce a good or service

at a lower opportunity cost than any other producer.

You have an absolute advantage whenever you

can produce more of something than others with the same resources.

The opportunity cost of taking a semesterminus−long economics class is

equal to the highest value of an alternative use of the time and money spent on the class.

Microeconomics is the study of

how households and firms make choices

The production possibilities frontier model shows that

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

A production possibilities frontier with a​ bowed-outward shape indicates

increasing opportunity costs as more and more of one good is produced

If society decides it wants more of one good and all resources are fully​ utilized, then

it has to give up some of another good and incur some opportunity costs.

Every society faces economic trademinus−offs. This means

producing more of one good means less of another good can be produced.

The term​ 'property rights' refers to

the ability to exercise control over​ one's own resources within the confines of the law.

By​ definition, economics is the study of

the choices people make to attain their​ goals, given their scarce resources.

Opportunity cost is defined as

the highest valued alternative that must be given up to engage in an activity.

Which of the following is a positive economic​ statement?

the minimum wage law causes unemployment

Which of the following is a normative economic​ statement?

the price of gasoline is too high

Adam​ Smith's invisible hand refers to

the process by which individuals acting in their own selfminus−interest bring about a market outcome that benefits society as a whole.

If in the market for oranges the supply has​ increased, then

the supply curve for oranges has shifted to the right.

If the price is​ $25,

there is a surplus of 300 units. picture labeled question 46

If the price is​ $10,

there would be a shortage of 600 units. picture labeled question 41

Without an increase in the supply of the factors of​ production, how can a nation achieve economic​ growth?

through technological advancement which enables more output with the same quantity of resources

Refer to the diagram to the right. Point C is

unattainable with current resources picture labeled question 37

Which of the following is a microeconomic​ question?`

what factors determine the price of carrots

quantity demanded equals quantity supplied. The market price will then equal the equilibrium price.

​If, for a​ product, the quantity supplied exceeds the quantity​ demanded, the market price will fall until

competition

​________ increases economic efficiency because it forces firms to produce and sell goods and services as long as the additional benefit to consumers is greater than the additional cost of production.

productive efficiency

​________ is a situation in which a good or service is produced at the lowest possible cost.

point A

​________ is​ (are) inefficient in that not all resources are being used. picture labeled question 33

Choices ; scarce

Economics is the study of the​ ________ people make to attain their​ goals, given their​ ________ resources.

marginal benefit equals the marginal cost

Economists reason that the optimal decision is to continue any activity up to the point where the

complements

Elvira decreased her consumption of bananas when the price of peanut butter increased. For​ Elvira, peanut butter and bananas are

the price of the good changes

One would speak of a change in the quantity of a good​ supplied, rather than a change in​ supply, if

macroeconomics

The branch of economics which studies the behavior of entire economies is called

consumers and firms choosing which goods and services to buy or produce.

The decision about what goods and services will be produced in a market economy is made by

0 pounds of meat

The figure shows the production possibilities frontier for​ Mendonca, an agrarian nation that produces two​ goods, meat and vegetables. If Mendonca chooses to produce 160 pounds of​ vegetables, how much meat can it produce to maximize​ production? picture labeled question 27

​increases, the quantity of yogurt demanded will decrease.

The law of demand​ implies, holding everything else​ constant, that as the price of yogurt

unattainable

The points outside the production possibilities frontier are

patents and copyrights

The primary purpose of​ ________ is to encourage the expenditure of funds on research and development to create new products.

2 pogo sticks

The table above shows the output per month of two​ people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. What is​ Barney's opportunity cost of making a​ unicycle? picture labeled question 30

3 pogo sticks

The table above shows the output per month of two​ people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. What is​ Fred's opportunity cost of making a​ unicycle? picture labeled question 30

Barney has a comparative advantage in making unicycles and Fred in making pogo sticks.

The table above shows the output per month of two​ people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. Which of the following statements is true​? picture labeled question 30

1 1/3 necklaces

The table above shows the output per week of two​ jewelers, Serena and Haley. They can either devote their time to making bracelets or making necklaces. What is​ Haley's opportunity cost of making a​ bracelet? picture labeled question 36

2 necklaces

The table above shows the output per week of two​ jewelers, Serena and Haley. They can either devote their time to making bracelets or making necklaces. What is​ Serena's opportunity cost of making a​ bracelet? picture labeled question 36

1/2 of a bracelet

The table above shows the output per week of two​ jewelers, Serena and Haley. They can either devote their time to making bracelets or making necklaces. What is​ Serena's opportunity cost of making a​ necklace? picture labeled question 36

Barney has an absolute advantage in making both products.

The table to the right shows the output per month of two​ people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. Which of the following statements is true​? picture labeled question 30


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