Macro Mid- Term
The period between the high point of economic activity and the following low point is called A. a recession. B. inflation. C. stagflation. D. an expansion.
A. a recession.
The three types of unemployment are A. natural, unnatural, and cyclical unemployment. B. frictional, structural, and cyclical unemployment. C. full, frictional, and involuntary unemployment. D. voluntary, structural, and cyclical unemployment.
B. frictional, structural, and cyclical unemployment.
The three economic questions that every society must answer are A. What are the prices of goods, how are they determined, and who will pay for them? B. What kind of government will the society have, how will it be run, and who will run it? C. What goods will be produced, how will they be produced, and who will receive the goods? D. What economic system will be used, how will it be implemented, and who will make market decisions?
C. What goods will be produced, how will they be produced, and who will receive the goods?
Economic data is used A. to take the place of an economic model. B. to prove that a model is true. C. only if all relevant data is available. D. to test models.
D. to test models.
Long-run growth in GDP is determined by A. technology, investment, and consumption B. labor productivity, capital, and government expenditures. C. consumption, investment, and government expenditures. D. capital, labor productivity, and technology.
D. capital, labor productivity, and technology.
Societies organize their economies in two main ways to answer the three questions of what, how, and who. A society can have a _________ economy in which the government decides how economic resources will be allocated. Or a society can have a __________ economy in which the decisions of households and firms interacting in markets allocate economic resources.
centrally planned / market
Centrally planned economies allocate resources based on decisions by _________ , while market economies answer these questions through decisions made by _________________.
government, households and firms
A large corporation that runs nursing homes estimates that changes to Medicare will result in lower payments by Medicare to nursing homes for short-term stays by patients that require therapy or care upon leaving hospitals. Assume the corporation is considering expanding the number of "beds" it offers at its nursing homes. Given the changes to Medicare, if the marginal benefit of offering an additional bed is $5,000 and the marginal cost is $9,000 per bed, then the corporation should or should not offer additional beds.
should not
Indicate whether each of the following is primarily a microeconomic issue or a macroeconomic issue. The effect of higher cigarette taxes on the quantity of cigarettes sold.
.microeconomic
Which of the following statements is true? A. All individuals face a scarcity of time and need to make choices how to allocate it. B. Most individuals face a scarcity of time, but few experience a scarcity of other resources. C. Some individuals experience scarcity because they have not learned to live within their means. D. While resources are scarce, most people don't own resources and therefore do not face a scarcity of them.
A. All individuals face a scarcity of time and need to make choices how to allocate it.
Which groups tend to have above-average unemployment rates, and which groups tend to have below-average unemployment rates? Consider the following choices. Which one is not accurate? A. Black teenagers as a group have lower unemployment rates than white teenagers. B. White adults have below-average unemployment rates. C. Generally, teenagers as a group have higher unemployment rates than adults. D. Black adults have above-average unemployment rates.
A. Black teenagers as a group have lower unemployment rates than white teenagers.
The price index which is used to measure changes in the cost of living, is the A. Consumer Price Index (CPI). B. Producer Price Index (PPI). C. Retail Price Index. D. GDP Deflator.
A. Consumer Price Index (CPI).
The government of a country is considering increasing the minimum hourly wages by 10 percent. Economists argue that this is going to have a negative effect on employment in the long term. Which of the following, if true, would strengthen the economists' viewpoint? A. Several research studies have concluded that increases in the minimum wage are likely to reduce school enrolment among teenagers. B. The minimum wage in the country is currently 3 percent below the newly-revised poverty line. C. The increase in the minimum wage is expected to reduce frictional unemployment in the economy. D. Due to labor shortage, companies in the country are willing to pay efficiency wages for even the most basic jobs. E. Even with a 10 percent increase, the minimum wage in the country will still be lower than those of neighboring countries.
A. Several research studies have concluded that increases in the minimum wage are likely to reduce school enrolment among teenagers.
How does the U.S. economy create and destroy millions of jobs each year? (Mark all that apply.) A. Some businesses are expanding, while others are contracting. Your answer is correct. B. The federal government determines that certain industries are obsolete and closes firms. C. In the market system, new firms are constantly entering and exiting various industries. D. When unemployment is high, the federal government hires more workers to offset the effects of unemployment.
A. Some businesses are expanding, while others are contracting. and C. In the market system, new firms are constantly entering and exiting various industries.
Productive efficiency means that A. a good or service is produced at the lowest possible cost. B. a good or service is produced as quickly as possible. C. every good or service is distributed fairly. D. every good or service is produced up to the point where marginal benefit is equal to marginal cost.
A. a good or service is produced at the lowest possible cost.
Industries that produce A. durable goods are more affected by recessions than is the economy as a whole. B. goods that are expected to last for fewer than three years are more affected by recessions than are durable goods. C. goods that are expected to last for three or more years are less affected by recessions than are nondurable goods. D. durable goods are less affected by recessions than is the economy as a whole.
A. durable goods are more affected by recessions than is the economy as a whole.
Suppose, in an effort to prevent the population from declining, Italy begins offering new mothers extended periods of paid family leave from work and, consequently, the birthrate per woman increases. If so, then this could best be characterized as an example of people responding to A. economic incentives. B. compassion. C. religious beliefs. D. envy. E. accounting principles.
A. economic incentives.
Microeconomics is the study of A. how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices. B. how individuals make good decisions for themselves but hurt society. C. how individuals and firms act altruistically to better society. D. the economy as a whole, including topics such as inflation, unemployment, and economic growth.
A. how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices.
The unemployment rate that includes discouraged workers and people working part-time who would prefer full-time jobs A. is higher than the official unemployment rate, and the difference between the two grows larger in recessions. B. is lower than the official unemployment rate, and the difference between the two grows larger in recessions. C. is lower than the official unemployment rate, but the difference between the two grows smaller in recessions. D. is higher than the official unemployment rate, but the difference between the two grows smaller in recessions.
A. is higher than the official unemployment rate, and the difference between the two grows larger in recessions.
The Food and Drug Administration (FDA) is part of federal government's Department of Health and Human Services. Among its other functions, the FDA evaluates the safety and effectiveness of drugs and medical devices. In 2020, the FDA had to approve pharmaceutical firms Pfizer and Moderna's Covid-19 vaccines for emergency use before the vaccines could be distributed. In a centrally planned economy, the government decides how resources will be allocated. In a market economy, the decisions of households and firms interacting in markets allocate resources. Part 2 The regulation of the production and sale of drugs and medical devices in the United States is an example of how resources are allocated in a A. market economy because the drug development, and the resources allocated to the development, occurs in the market. B. centrally planned economy because the FDA is part of the government and this involves central planning. C. market economy because the FDA is made up of elected officials. D. centrally planned economy because the government controls whether the drug can be used.
A. market economy because the drug development, and the resources allocated to the development, occurs in the market.
Technological progress is affected by (check all that apply) A. new software developments B. investment in capital C. private property rights D. entrepreneurship E. population growth
A. new software developments B. investment in capital C. private property rights D. entrepreneurship
When compared to the Great Depression, the typical length of unemployment in the modern (post-Great Depression-era) U.S. economy is A. relatively brief. B. approximately the same. C. significantly longer. D. slightly longer.
A. relatively brief.
The type of unemployment most likely to result in hardship for the people who are unemployed is A. structural because this type of unemployment requires retraining to acquire new job skills. B. cyclical and frictional because these two types are closely related. C. cyclical because people have to wait for a recession to end. D. frictional because people need to find a new job in the labor market.
A. structural because this type of unemployment requires retraining to acquire new job skills.
Macroeconomics is the study of A. the economy as a whole, including topics such as inflation, unemployment, and economic growth. B. why the U.S. has spent so much money on wars and government surveillance of its own citizens. C. how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices. D. the economy on a state-by-state basis, covering areas affected by the Commerce Clause.
A. the economy as a whole, including topics such as inflation, unemployment, and economic growth.
When the economy is at full employment, unemployment is equal to A. the natural rate of unemployment. B. normal rate of unemployment - abnormal rate of unemployment C. cyclical unemployment - seasonal unemployment. D. zero.
A. the natural rate of unemployment.
Economists use models A. to answer questions and analyze issues. B. to disprove economic data. C. to describe the real world exactly. D. to prove that theories are true.
A. to answer questions and analyze issues.
When an unemployed person drops out of the labor force, the unemployment rate A. understates the true degree of joblessness in the economy. B. is not affected by the existence of such workers. C. overstates the true degree of joblessness in the economy. D. becomes more reliable as all the potential erroneous data are removed.
A. understates the true degree of joblessness in the economy.
According to an article on cnbc.com, in early 2021, Elon Musk was the world's richest person, with wealth of $184 billion. Source: Robert Frank, "Elon Musk Is Now the Richest Person in the World, Passing Jeff Bezos," cnbc.com, January 7, 2021. Does Elon Musk face scarcity? A. Yes, because even though billionaires' financial resources enable them to afford a much greater array of goods and services than those less wealthy, their financial resources are not infinite. B. Yes, because there is a limit to the income even billionaires can earn. C. No, because if a billionaire cannot get the goods and services they want, someone else can get it for them. D. No, because billionaires can have anything that money can buy.
A. Yes, because even though billionaires' financial resources enable them to afford a much greater array of goods and services than those less wealthy, their financial resources are not infinite.
In a market system, what determines how goods and services will be produced? A. The government determines how goods and services will be produced. B. Firms determine how goods and services will be produced. C. Consumers determine how goods and services will be produced. D. Consumers, firms, and the government determine together how goods and services will be produced.
B. Firms determine how goods and services will be produced.
Which of the following describes the effect of the business cycle on the inflation rate and the unemployment rate? A. The unemployment rate increases and the inflation rate increases during expansions. B. The unemployment rate increases and the inflation rate falls during recessions. C. The unemployment rate increases and the inflation rate falls during expansions. D. The unemployment rate falls and the inflation rate falls during recessions.
B. The unemployment rate increases and the inflation rate falls during recessions.
Currently, the Bureau of Labor Statistics does not include homemakers in its employment and labor force totals. What would happen to the unemployment rate and the labor force participation rateLOADING... if homemakers were included in these numbers? A. Both the unemployment rate and the labor force participation rate would increase. B. The unemployment rate would decrease and the labor force participation rate would increase. C. Both the unemployment rate and the labor force participation rate would decrease. D. The unemployment rate would increase and the labor force participation rate would decrease.
B. The unemployment rate would decrease and the labor force participation rate would increase.
Leonard Fleck, a philosophy professor at Michigan State University, has written, "When it comes to health care in America, we have limited resources for unlimited health care needs. We want everything contemporary medical technology can offer that will improve the length or quality of our lives as we age. But as presently healthy taxpayers, we want costs controlled." Source: Leonard Fleck, Just Caring: Health Care Rationing and Democratic Deliberation. New York: Oxford University Press, 2009. Is it necessary for all economic systems to limit services such as health care? Yes A market system prevents people from getting as many goods and services as they want due to which of the following? A. The government because it allocates the goods and services. B. Their income. C. Both A and B. D. Neither A nor B.
B. Their income.
Which of the following best describes scarcity? A. Markets cannot properly allocate resources. B. Unlimited wants exceed the limited resources available. C. Prices of goods are very high. D. Wants cannot be fulfilled and thus all goods must be rationed.
B. Unlimited wants exceed the limited resources available.
The high point of economic activity is called A. a zenith. B. a peak. C. a high. D. a trough.
B. a peak.
Which of the following is the best example of human capital? A. a worker pays less taxes B. a worker gets a college degree C. a manager devotes more spending to research and development D. a manager buys workers more personal computers
B. a worker gets a college degree
The period between the low point of economic activity and the following high point is called A. inflation. B. an expansion. C. stagflation. D. an acceleration.
B. an expansion.
How are economic resources allocated in a market economy? A. by firms acting alone B. by the decisions of households and firms interacting in markets C. by the government D. by consumers acting alone
B. by the decisions of households and firms interacting in markets
Allocative efficiency means that A. every good or service is distributed fairly. B. every good or service is produced up to the point where marginal benefit is equal to marginal cost. C. a good or service is produced at the lowest possible cost. D. a good or service is produced as quickly as possible.
B. every good or service is produced up to the point where marginal benefit is equal to marginal cost.
Scarcity implies that every society and every individual face trade-offs because scarcity means that A. people refuse to limit their wants. B. human wants are greater than what available resources can produce. C. government is unwilling to redistribute wealth. D. people are greedy and won't share with others.
B. human wants are greater than what available resources can produce.
Consider an organization dedicated to helping low-income people. The members of the organization are discussing alternative methods of aiding the poor, when a proponent of one particular method asserts: "If even one poor person is helped with this method, then all our time and money would have been worth it." If you were a member of the organization, what reply best represents clear economic thinking? This attitude A. acknowledges the importance of considering all the alternatives. B. ignores the fact that the cost of helping that one person has an opportunity cost of what those funds could have been used for to help other people. C. is the most logical because it is focussed on helping even one person. D. recognizes the fact that since the organization is a charity, there is an opportunity cost based on the square root of other peoples' needs.
B. ignores the fact that the cost of helping that one person has an opportunity cost of what those funds could have been used for to help other people.
All of the following are problems in measuring the unemployment rate except that A. part-time workers are included as employed. B. people on active military service are included as unemployed. C. discouraged workers are not included in the labor force. D. lack of verification of people's responses in the household survey.
B. people on active military service are included as unemployed.
The employment-population ratio measures the A. portion of the total population that is employed. B. percentage of the working age population that is employed. C. percentage of the working age population that is not employed. D. percentage of the working age population that is in the labor force.
B. percentage of the working age population that is employed.
Long-run economic growth in the United States is best measured using A. nominal GDP per capita, which has been trending strongly upwards over the past century. B. real GDP per capita, which has been trending strongly upwards over the past century. C. real GDP per capita, which has increased every single year over the past century. D. nominal GDP per capita, the values for which represent constant purchasing power.
B. real GDP per capita, which has been trending strongly upwards over the past century.
Which of the following factors determines the supply of loanable funds? A. the quantity of stocks and bonds issued by firms B. the willingness of households and governments to save C. changes in the interest rate, which cause firms to undertake more or fewer investment projects D. the number of financial intermediaries available
B. the willingness of households and governments to save
When Ségolène Royal was running unsuccessfully for president of France, she proposed that workers who lost their jobs would receive unemployment payments equal to 90 percent of their previous wages during their first year of unemployment. If this proposal were enacted, the unemployment rate in France: A. would have gone up as people from other countries would migrate to France because of their generous unemployment insurance. B. would have gone up as the opportunity cost of job search would have decreased. C. would have stayed the same because unemployment insurance programs do not affect the unemployment rate. D. would have gone down as the opportunity cost of job search would have increased.
B. would have gone up as the opportunity cost of job search would have decreased.
The U.S. Postal Service (USPS) charges Amazon about $2 to deliver a package. The USPS argues that its contract with Amazon allows it to reduce the loss it suffers on its overall operations. A business writer for the Washington Post observes: "Looked at from the standpoint of incremental revenue (huge) minus these incremental expenses (modest), the Postal Service could very easily have come to the conclusion that, even at $2 a package, the Amazon contract was likely to be highly profitable." Sources: Eli Rosenberg, "Trump Said Amazon Cost The the USPS 'Billions.' But the Post Office Has a Different Explanation." Washington Post, May 11, 2018. What does the writer mean by "incremental revenue" and "incremental cost"? Why would he focus on incremental revenue and incremental cost rather than on total revenue and total cost? "Incremental" means the same thing as A. "marginal." If the marginal revenue exceeds the marginal cost, the USPS's profit will decrease. If the marginal cost exceeds the marginal revenue, the USPS's profit will increase. B. "marginal." If the marginal revenue exceeds the marginal cost, the USPS's profit will increase. If the marginal cost exce
B. "marginal." If the marginal revenue exceeds the marginal cost, the USPS's profit will increase. If the marginal cost exceeds the marginal revenue, the USPS's profit will decrease.
College football attendance, especially student attendance, has been on the decline. In 2019, home attendance at major college football games declined for the ninth consecutive year and was the lowest since 1996. The opportunity cost of engaging in an activity is the value of the best alternative that must be given up in order to engage in that activity. Source: Charlotte Wilder, "Unexcused Absence: Why Is College Football Attendance Tanking?," si.com, January 10, 2020. Your opportunity cost of attending a game compared with the opportunity cost facing a college student 23 years ago is A. lower, because games are usually viewed on high-definition television today. B. higher, because more games are televised today. C. higher, because the cost of cable TV is higher today. D. lower, because of social media. PART 2: Can this change in opportunity cost account for the decline in college football attendance? Briefly explain. A. No, because opportunity costs do not involve an actual payment of money. B. Yes, because sports fans are rarely rational. C. No, because the price of the game ticket is the only thing that matters. D. Yes, because these changes increase the opportuni
B. higher, because more games are televised today. part 2: D. Yes, because these changes increase the opportunity cost of watching football games in person.
Economists assume that people are rational in the sense that A. they generally make the correct choices. B. they use all available information as they take actions intended to achieve their goals. C. they make decisions based on total, rather than marginal, variables. D. they do not respond to economic incentives.
B. they use all available information as they take actions intended to achieve their goals.
In early 2021, an article in the Wall Street Journal made the following comment about President Biden's policies to increase manufacturing employment in the United States: "[President] Biden's "buy American" proposals echo those of previous presidents, including President Trump, who issued executive orders to spur more federal purchases of U.S. goods and sought to use tariffs to disadvantage foreign producers." Source: Bob Tita, "Manufacturers Want Biden to Boost 'Buy American' Practices," Wall Street Journal, January 3, 2021. How does a tariff on goods "disadvantage foreign producers"? A. A tariff on imported goods will lower the prices of those imports, making it likely that some U.S. consumers will shift from buying imported goods to buying domestically-produced goods. B. Domestic firms will be able to lower prices, which will likely increase their profits. C. A tariff on goods will raise the prices of those imports, making it likely that some U.S. consumers will shift from buying imported goods to buying domestically-produced goods. D. None of the above. A tariff on imported goods will lower the price of imports, making it likely that some U.S. consumers will
C. A tariff on goods will raise the prices of those imports, making it likely that some U.S. consumers will shift from buying imported goods to buying domestically-produced goods.
Why are models based on assumptions? A. Because models are very different from theories. B. Because models are not intended to analyze real-world events. C. Because models have to be simplified to be useful. D. Because models are only concerned about questions of equity, not question of efficiency.
C. Because models have to be simplified to be useful.
Consider the following statement: "The problem with economics is that it assumes that consumers and firms always make the correct decisions. But we know that everyone makes mistakes." What is the most correct response to this statement? A. Economics does assume that consumers and firms always make the correct decisions. B. Economics is a proven field of study, and it has already solved this problem. C. Economics assumes that consumers and firms are rational, not that they always make the right decisions. D. Economics has a lot of problems such as those that caused the Great Recession.
C. Economics assumes that consumers and firms are rational, not that they always make the right decisions. Your answer is correct.
According to Costco's CEO, Jim Sinegal: "Paying good wages and keeping your people working for you is good business...Imagine that you have 120,000 loyal ambassadors out there who are constantly saying good things about Costco. It has to be a significant advantage for you." What is Costco's CEO referring to? A. Marketing strategies B. Structural unemployment C. Efficiency wages D. Union contracts
C. Efficiency wages
Suppose John Q. Worker is currently unemployed. Each day, John Q. Worker spends the entire day searching available job openings for an appropriate position given his set of skills, abilities, and interests. If someone asks John Q. what he does for work, he tells them that he is currently "in-between jobs." Which of the following best classifies John Q.'s unemployment status? A. Cyclically unemployed B. Seasonally unemployed C. Frictionally unemployed D. Structurally unemployed
C. Frictionally unemployed
A primary difference between macroeconomics and microeconomics is A. There are no true differences between microeconomics and macroeconomics. B. Microeconomics is concerned with market economies while macroeconomics is concerned with centrally-planned economies. C. Microeconomics examines individual markets while macroeconomics examines the economy as a whole. D. Microeconomics is concerned with present decisions while macroeconomics is concerned with future decisions.
C. Microeconomics examines individual markets while macroeconomics examines the economy as a whole.
Today, which of the following countries has a centrally planned economy? A. Canada B. Germany C. North Korea D. United States
C. North Korea
Which one of the following accurately describes the relationship between frictional unemployment and job search? A. People are said to be frictionally unemployed when they are between jobs due to the seasonal variations. B. People are said to be frictionally unemployed when their skills do not match job requirements. C. People are said to be frictionally unemployed when they are between jobs and searching for new jobs. D. People are said to be frictionally unemployed when they are laid off because of a recession.
C. People are said to be frictionally unemployed when they are between jobs and searching for new jobs.
Suppose that Sally J. Society recently lost her job as an underwater welder. In looking for a new job, she discovers that the only available jobs are for economists and that there are no openings for underwater welders because the trade is now obsolete. If Sally J. Society decides to return to school to earn an Economics degree, what is the best classification of her unemployment status? A. Seasonally unemployed B. Frictionally unemployed C. Structurally unemployed D. Cyclically unemployed
C. Structurally unemployed
The low point of economic activity is called A. a low. B. a bottom. C. a trough. D. a peak.
C. a trough.
Any model is based on making assumptions because A. we cannot analyze an economic issue unless we reduce its complexity. B. models have to be simplified to be useful. C. both a and b. D. neither a nor b.
C. both a and b.
The increase in labor turnover and the increases in entry-level wages being paid by large retailers are A. not connected because the decision to pay higher wages was made by all the firms, while turnover occurs for different reasons at different firms. B. connected because higher wages cost firms more, and lower both employment and turnover. C. connected because higher wages can encourage workers to stay longer, thereby lowering turnover rates. D. not connected because the decision to pay higher wages cannot change the need for people to change jobs from time to time.
C. connected because higher wages can encourage workers to stay longer, thereby lowering turnover rates.
When an unemployed person drops out of the labor force, it A. does not affect the labor force participation rate. B. affects the employment-population ratio. C. does not affect the employment-population ratio. D. does not affect the unemployment rate.
C. does not affect the employment-population ratio.
increases in the minimum wage will A. increase the level of unemployment for all groups of workers. B. have a large effect on the unemployment rate in the United States. C. increase unemployment among teenagers. D. increase unemployment among workers whose market wage is higher than the new minimum wage.
C. increase unemployment among teenagers.
In determining whether to borrow funds, firms compare the rate of return they expect to make on an investment with A. the revenue expected from the investment. B. the total amount of profit they expect to make from the investment. C. the interest rate they must pay to borrow the necessary funds. D. the initial cost of the investment.
C. the interest rate they must pay to borrow the necessary funds.
When the federal government crafts environmental policies that make it less expensive for firms to follow green initiatives, A. the policies are futile because where the environment is concerned, it has been repeatedly shown that firms do not respond to economic incentives. B. the policies are likely to be more successful than policies that cost firms more, but they do not recognize economic incentives. C. the policies are consistent with economic incentives. D. pollution is likely to increase.
C. the policies are consistent with economic incentives.
The two key factors that cause labor productivity to increase over time are A. better environmental standards and stricter labor laws. B. the quantity of labor per hour worked and the level of technology. C. the quantity of capital per hour worked and the level of technology. D. the decline in unionization and slacking of labor laws.
C. the quantity of capital per hour worked and the level of technology.
The unemployment rate in the United States is usually ________ than the unemployment rates in most other high-income countries, partly because the United States has _________ requirements for the unemployed to receive government payments. A. lower; less stringent B. higher; less stringent C. lower; more stringent D. higher; more stringent
C. lower; more stringent
Suppose that your local police department recovers 100 tickets to a big NASCAR race in a drug raid. It decides to distribute these to residents and announces that tickets will be given away at 10 A.M. Monday morning at City Hall. Suppose that your college decides to give away 1,000 tickets to the football game against your school's biggest rival. The athletic department elects to distribute the tickets by giving them away to the first 1,000 students who show up at the department's office at 10 a.m. the following Monday. a. The groups of people that are most likely to get the tickets will be those for whom the expected marginal benefits of going to the department's office on Monday morning are greater than the expected marginal costs. b. What is the actual cost and also the opportunity cost of distributing the tickets this way? A. The cost of people blocking traffic in and around the department's office building. B. The activities that cannot be done (such as earning money at work) when one is standing in line. C. The cost of travel to the department's office. D. All of the above. E. A and B only. PART 2: Productive efficiency occurs when a good or service (such as the distr
D. All of the above. PART 2: B. not an equitable way to distribute the tickets because some students who really want them may be unable to go and get them.
Why might the unemployment rate continue to rise during the early stages of a recovery? A. Employment growth may be slow relative to the growth in the labor force. B. The number of discouraged workers may continue to increase. C. Some firms continue to operate well below their capacity even after a recession has ended. D. Because both (a) and (c) are true.
D. Because both (a) and (c) are true.
What is the general relationship between the business cycle and unemployment and inflation? A. During an expansion, unemployment and inflation increase. B. During a recession, unemployment and inflation decrease. C. During a recession, unemployment and inflation increase. D. During an expansion, unemployment falls and inflation increases.
D. During an expansion, unemployment falls and inflation increases.
Which of the following does NOT lead to long-run economic growth? A. Technological change B. Improved labor productivity C. Increase in the capital stock D. Increase in average wages
D. Increase in average wages
The government of a country is considering increasing the minimum hourly wages by 10 percent. Economists argue that this is going to have a negative effect on employment in the long term. Which of the following, if true, would strengthen the argument for increasing minimum wages? A. Most companies in the country are already paying more than the current minimum hourly wage. B. The annual average number of hours worked are expected to fall by 15 percent with the increase in the minimum wage. C. Changes in the minimum wage usually do not affect higher-paying jobs. D. Increases in the minimum wage are observed to reduce employee turnover. E. The productivity of workers earning efficiency wages is likely to increase.
D. Increases in the minimum wage are observed to reduce employee turnover.
What type of economic analysis is concerned with the way things ought to be? A. Marginal Analysis B. Positive Analysis C. Rational Behavior D. Normative Analysis
D. Normative Analysis
Consider the following choices. Which one of the following choices is correct? A. Recessions lasted for a shorter period of time in the first half of the twentieth century than in the second half. B. Expansions have become shorter in the second half of the twentieth century compared to the first half. C. Both expansions and recession last for about the same period of time in the second half of the twentieth century. D. Recessions were more severe and lasted longer in the first half of the twentieth century and became shorter and milder in the second half.
D. Recessions were more severe and lasted longer in the first half of the twentieth century and became shorter and milder in the second half.
Many economists agree that this difference is due to all of the following reasons except: A. Since the 1950s, the economy has become more service oriented and less dependent on the production of goods. B. Since the 1950s, the federal government has stabilized the economy by using active fiscal and monetary policies. C. Since the 1950s, the unemployment insurance program and other government transfer programs have aided the economy. D. Since the 1950s, people have become more rational and control their spending behavior countercyclically.
D. Since the 1950s, people have become more rational and control their spending behavior countercyclically.
Suppose that you are available to go to work but have not looked for a job for at least the last four weeks because you believe that there aren't any jobs available. You would be counted as A. unemployed. B. part of the labor force. C. underemployed. D. a discouraged worker.
D. a discouraged worker.
Scarcity is central to the study of economics because it implies that A. economic agents are rational. B. wants are unlimited. C. society must make decisions at the margin. D. every choice involves an opportunity cost.
D. every choice involves an opportunity cost.
Since the late 1940s, the overall labor force participation rate A. has fallen because the increase in the labor force participation rate of adult men has been more than offset by the decline in the labor force participation rate of adult women. B. has risen because the decline in the labor force participation rate of adult women has been more than offset by the increase in the labor force participation rate of adult men. C. has fallen because the increase in the labor force participation rate of adult women has been more than offset by the decline in the labor force participation rate of adult men. D. has risen because the decline in the labor force participation rate of adult men has been more than offset by the increase in the labor force participation rate of adult women.
D. has risen because the decline in the labor force participation rate of adult men has been more than offset by the increase in the labor force participation rate of adult women.
Unemployment rates are A. lower for college graduates than for people without a high school degree, and vary little among ethnic groups. B. lower for people without a high school degree than for college graduates, and vary greatly among ethnic groups. C. lower for people without a high school degree than for college graduates, and vary little among ethnic groups. D. lower for college graduates than for people without a high school degree, and vary greatly among ethnic groups.
D. lower for college graduates than for people without a high school degree, and vary greatly among ethnic groups.
Economists use the word marginal to mean an extra or additional benefit or cost of a decision. An optimal decision occurs when A. marginal cost is zero. B. marginal benefit is maximized. C. marginal benefit is greater than marginal cost. D. marginal benefit equals marginal cost.
D. marginal benefit equals marginal cost.
When economists develop models designed to explain the choices people make, they generally assume that A. people make the best decisions. B. everyone knows everything. C. consumers do not use all available information. D. people are rational. E. consumers do not act to achieve their goals.
D. people are rational.
One of the basic facts of life is that people must make choices as they try to attain their goals. This unavoidable fact comes from a reality an economist calls Part 2 A. rationality. B. economics. C. the market. D. scarcity.
D. scarcity.
In 2015, an article on bloomberg.com noted that Walmart, Starbucks, TJ Maxx, IKEA, Gap, and several other big retailers had announced increases in the wages they were paying newly hired workers. The same article also noted that "[labor] turnover in the retail sector has been steadily rising and now stands at 5 percent a month." The term "labor turnover" used in the article means the A. count of all workers who have ever worked for the company. B. count of all new workers. C. termination of an employee from an establishment for due cause. D. separation of an employee from an establishment.
D. separation of an employee from an establishment.
The unemployment rate A. shows the percentage of the population that is considered unemployed. B. is the amount of the labor force that is not working. C. is the amount of people in the population that are not working. D. shows the percentage of the labor force that is considered unemployed.
D. shows the percentage of the labor force that is considered unemployed.
Equity is A. an exactly equal distribution of income. B. when poorer people's income is growing more rapidly than more wealthy people's income. C. always achieved by the market. D. the fair distribution of economic benefits.
D. the fair distribution of economic benefits.
Opportunity cost is A. when unlimited wants exceed the limited resources available to fulfill those wants. B. the idea that because of scarcity, producing more of one good or service means producing less of another good or service. C. when consumers and firms use all available information as they act to achieve their goals. D. the highest valued alternative that must be given up to engage in an activity.
D. the highest valued alternative that must be given up to engage in an activity.
Capital can be differentiated between physical capital and human capital. Human capital is A. the energy use to bring together the factors of production to produce goods and services. B. the new developments in machinery and software. C. the goods manufactured to produce other goods and services. D. the knowledge and skills workers acquire from education and training or from their life experiences
D. the knowledge and skills workers acquire from education and training or from their life experiences
The natural rate of unemployment is A. the sum of cyclical unemployment and frictional unemployment. B. the sum of structural unemployment and cyclical unemployment. C. the sum of seasonal unemployment and cyclical unemployment. D. the sum of structural unemployment and frictional unemployment.
D. the sum of structural unemployment and frictional unemployment.
In a market system, how does society decide what goods and services will be produced? A. What goods and services will be produced is determined by a vote of consumers. B. The government decides what goods and services will be produced. C. Firms alone determine what goods and services will be produced. D. Consumers, firms, and the government determine what goods and services will be produced by the choices they make.
D. Consumers, firms, and the government determine what goods and services will be produced by the choices they make.
Why is the unemployment rate, as measured by the Bureau of Labor Statistics, an imperfect measure of the extent of joblessness in the economy? A. It fails to account for illegal activities. B. Discouraged workers are not considered unemployed. C. It does not account for inaccurate responses to the Current Population Survey. D. Underemployed people are considered employed. E. All of the above.
E. All of the above.
______________ is concerned with what is, and ______________ is concerned with what ought to be. Economics is about _____________ ,which measures the costs and benefits of different courses of action.
Positive analysis normative analysis positive analysis
______________ occurs when a good or service is produced at the lowest possible cost. ____________ occurs when production is in accordance with consumer preferences.
Productive efficiency / Allocative efficiency
Indicate which of the following statements represent positive analysis and which represent normative analysis. a. A 50-cent-per-pack tax on cigarettes will reduce smoking by teenagers by 12 percent. b. The federal government should spend more on AIDS research. c. Rising paper prices will increase textbook prices. d. The price of coffee at Starbucks is too high.
a.positive analysis b.normative analysis c.positive analysis d.normative analysis
A market is a group of _______ of a good or service and the institution or arrangement by which they come together to trade.
buyers and sellers
During his term in office, President Trump imposed tariffs on imports of foreign steel. -> People who had invested in U.S. steel firms are likely to be helped or not helped by a tariff on imported steel. PART 2: Would people in the United States helped by the steel tariffs necessarily support the tariffs? Would people who were hurt by the tariffs necessarily oppose the tariffs? Which of the following statements is true? A. People who benefitted from the tariff are likely to support them. We can't say those people will necessarily support the tariffs, though, because their support for free trade unrestricted by tariffs may supersede their monetary gains from this particular tariff. B. Some of the people who lose from the tariffs may not understand that the tariffs have inflicted losses on them. For example, a consumer who pays more for a washing machine may not understand that the price of the washing machine has increased because of the steel tariffs. C. Some people who are hurt by the tariffs may still support them because, for example, they believe it is a good idea, on normative grounds, to protect jobs in the steel industry. D. All of the above.
helped PART 2: D. All of the above.
Late in the semester, a friend tells you, "I was going to drop my psychology course so I could concentrate on my other courses, but I had already put so much time into the course I decided not to drop it." Is your friend's reasoning correct or incorrect? Your friend's reasoning is
incorrect
Indicate whether each of the following is primarily a microeconomic issue or a macroeconomic issue. The effect of higher income taxes on the total amount of consumer spending.
macroeconomic
Indicate whether each of the following is primarily a microeconomic issue or a macroeconomic issue. The reasons for the economies of East Asian countries growing faster than the economies of sub-Saharan African countries.
macroeconomic
The level of total investment by firms in new machinery and equipment helps to determine how rapidly the economy grows. This is a macroeconomic or microeconomics issue. However, to understand how much new machinery and equipment firms decide to purchase, one must analyze the incentives individual firms face, which is a macroeconomic or microeconomics issue.
macroeconomic and microeconomics
Efficiency means that goods are distributed in a way that _____________ , while equity means that goods are distributed in a way that ___________
maximizes benefits to society / is fair
Indicate whether each of the following is primarily a microeconomic issue or a macroeconomic issue. The reasons for low rates of profit in the airline industry.
microeconomic
