MACRO FINAL 1
The Farm Factory, a booth at the local Farmer's Market, sells fresh eggs for $1.50 per dozen and fresh milk for $2.50 per gallon. What is the opportunity cost of buying a gallon of milk?
3/5 of a dozen eggs
A supply curve
A curve that shows the relationship between the price of a product and the quantity of the product supplied.
Assume that Honduras has a comparative advantage in producing bananas and exports bananas to Brazil. We can conclude that
Honduras has a lower opportunity cost of producing bananas relative to Brazil.
Which of the following is a microeconomic question?
How will Apple decide on a selling price for the iPad?
How are the fundamental economic decisions determined in Canada?
Individuals, firms, and the government interact in a market to make these economic decisions.
For each watch that Switzerland produces, it gives up the opportunity to make 50 pounds of chocolate. Germany can produce 1 watch for every 100 pounds of chocolate it produces. Which of the following is true about the comparative advantage between the two countries?
Switzerland has the comparative advantage in chocolate.
Which of the following is a positive economic statement?
Unemployment insurance payments increase when the unemployment rate rises.
Countries gain from specializing in producing goods in which they have ________ and trading for goods in which other countries have ________.
a comparative advantage; a comparative advantage
The phrase "demand has increased" means that
a demand curve has shifted to the right.
The term "market" in economics refers to
a group of buyers and sellers of a product and the arrangement by which they come together to trade.
Trade that is within a country or between countries is based on the principle of
absolute advantage
If you can produce more of something than others with the same resources, you have
an absolute advantage.
Over the past several decades there has been rapid growth in international trade. This growth has been due to all but one of the following factors. Which factor has not contributed to the growth of international trade?
an increase in the tariffs charged on many goods
At a product's equilibrium price
any buyer who is willing and able to pay the price will find a seller for the product.
Which of the following is part of an economic model?
assumptions
The decision about what goods and services will be produced in a market economy is made by
consumers and firms choosing which goods and services to buy or produce.
Autarky is a situation in which a country
does not trade with other countries.
A worker is hired in a
factor market
In economics, tangible merchandise is referred to as
goods
An ________ is represented by a rightward shift of the demand curve while an ________ is represented by a movement along a given demand curve.
increase in demand; increase in quantity demanded
The law of demand implies, holding everything else constant, that as the price of yogurt
increases, the quantity of yogurt demanded will decrease.
The branch of economics which studies how households and firms make choices, interact in markets, and how government attempts to influence their choices is called
microeconomics
If a decrease in income leads to a decrease in the demand for ice cream, then ice cream is
normal good
Economists assume that
optimal decisions are made at the margin
When you purchase a new surfboard you do so in the
product market
At market equilibrium
quantity demanded equals quantity supplied.
Which of the following is an example of an activity undertaken by an entrepreneur?
starting a snow cone business
A tax imposed by a government on imports of a good into a country is called
tariff
The processes used to produce goods and services describes
technology
Free trade refers to trade between countries
that is without restrictions
Assume that the price for lawn care has fallen and sales of lawn care services have also fallen. One can conclude that
the demand for lawn care service has decreased
The unattainable points in a production possibilities frontier are
the points outside the production possibilities frontier.
The demand curve shows the relationship between
the price of a product and the quantity of the product demanded.
If in the market for apples the supply has decreased, then
the supply curve for apples has shifted to the left.
Hurricane Katrina damaged a large portion of oil refining and pipeline capacity in the Gulf coast states. In the market for gasoline
the supply curve shifted to the left resulting in an increase in the equilibrium price.
If in the market for bananas the supply curve has shifted to the right, then
the supply of bananas increased.
Protectionism is the use of ________ to protect domestic firms from foreign competition.
trade barriers
In 2017, President Trump considered imposing a tariff on automobiles assembled by U.S. manufacturers in Mexico that were to be sold in the United States. If this tariff was imposed and as a result, some of these manufacturers moved their automobile assembly from Mexico back to the United States, these firms would be reacting to which of the three key economic ideas?
uh
Whenever a buyer and a seller agree to trade, both must believe they will be made better off
whether the buyer and seller live in the same (or different) city or country.