Macro quizes

A financial statement that sums up a firm's financial position on a particular day is 1) a balance sheet. 2) an income statement. 3) statement of cash flow. 4) an equity report.

1

Holding everything else constant, an increase in the price of raisins will result in 1) a decrease in the quantity of raisins demanded. 2) an increase in the demand for raisins. 3) a decrease in the supply of raisins. 4) an increase in the quantity of raisins demanded.

1

Hurricane Katrina damaged a large portion of oil refining and pipeline capacity in the Gulf coast states. In the market for gasoline, 1) the supply curve shifted to the left resulting in an increase in the equilibrium price. 2) the supply curve shifted to the right resulting in an increase in the equilibrium price. 3) the demand curve shifted to the left resulting in a decrease in the equilibrium price. 4) the demand curve shifted to the right resulting in an increase in the equilibrium price.

1

If a decrease in income leads to a decrease in the demand for ice cream, then ice cream is 1) a normal good. 2) a neutral good. 3) a complement. 4) a necessity.

1

If a firm has implicit costs as well as explicit costs, 1) accounting profit might be greater than economic profit. 2) economic profit will always be greater than accounting profit. 3) accounting profit will be equal to economic profit. 4) the firm has no economic profit.

1

Question 6 A decrease in the price of pork will result in 1) a smaller quantity of pork supplied. 2) a larger quantity of pork supplied. 3) a decrease in the demand for pork. 4) an increase in the supply of pork.

1

Which of the following is one of the most widely followed stock indexes in the United States? 1) the Dow Jones Industrial Average 2) the Chicago Mercantile Exchange 3) the Fortune 500 4) the Securities and Exchange Commission

1

Which of the following statements is true? 1) A stock can possibly pay dividends forever, but bonds have a fixed number of payments. 2) Differences of opinion about a bond's future may vary considerably but there is less difference about a stock's future. 3) The future growth of a stock is more certain than the payments of a bond. 4) Bonds represent partial ownership in a firm but stocks do not.

1

Which of the following statements is true? 1) Corporations can issue stocks and bonds, while proprietorships cannot. 2) Corporations have one owner, while proprietorships have many owners. 3) Corporations face fewer taxes than do proprietorships. 4) Proprietorships have limited liability while corporations have unlimited liability.

1

An example of a factor of production is 1) a car produced by an auto manufacturer. 2) a worker hired by an auto manufacturer. 3) a loan granted to an auto manufacturer. 4) the automobiles exported by an auto manufacturer.

2

Comparative advantage means 1) the ability to produce more of a product with the same amount of resources than any other producer. 2) the ability to produce a good or service at a lower opportunity cost than any other producer. 3) the ability to produce a good or service at a higher opportunity cost than any other producer. 4) compared to others you are better at producing a product.

2

How has the growing popularity of factory outlet stores affected the market for clothing at retail department stores? 1) The demand curve for clothing at retail department stores shifts to the right. 2) The demand curve for clothing at retail department stores shifts to the left. 3) The supply curve for clothing at retail department stores shifts to the right. 4) The supply curve for clothing at retail department stores shifts to the left.

2

Suppose the U.S. government encouraged new teachers to take jobs in underperforming schools by paying the new teachers a $20,000 bonus. These teachers would be exemplifying the economic idea that 1) people are rational. 2) people respond to economic incentives. 3) optimal decisions are made at the margin. 4) equity is more important than efficiency.

2

The owner or owners control the day-to-day activities of which of the following types of business? 1) corporations and partnerships 2) partnerships and sole proprietorships 3) sole proprietorships and corporations 4) only corporations

2

Trade-offs force society to make choices when answering what three fundamental questions? 1) What will be the prices of goods and services; how will these goods and services be produced; and who will receive them? 2) What goods and services to produce; how will these goods and services be produced; and who receives them? 3) Who gets jobs; what wages do workers earn; and who owns what property? 4) How much will be saved; what will be produced; and how can these goods and services be fairly distributed?

2

Which of the following is an advantage of starting a new business as a partnership? 1) The owners have limited personal liability. 2) A partnership has few government rules and regulations to comply with. 3) Business profits are not taxed. 4) A partnership can easily attain additional funding.

2

Which of the following will not shift the demand curve for a good? 1) an increase in population 2) an increase in the price of the good 3) a decrease in the price of a substitute good 4) an increase in consumer incomes

2

Firms 1) have no influence on the circular flow in a market economy. 2) purchase resources in the product market. 3) sell goods in the product market. 4) sell resources in the factor market.

3

In September, buyers of silver expect that the price of silver will rise in October. What happens in the silver market in September, holding all else constant? 1) The quantity demanded decreases. 2) The demand curve shifts to the left. 3) The demand curve shifts to the right. 4) The quantity demanded increases.

3

Increasing opportunity cost along a bowed-out production possibilities frontier occurs because 1) of inefficient production. 2) of ineffective management by entrepreneurs. 3) some factors of production are not equally suited to producing both goods or services. 4) of the scarcity of factors of production.

3

Suppose your expenses for this term are as follows: tuition: $9,000, room and board: $1,500, books and other educational supplies: $1,000. Further, during the term, you can only work part-time and earn $3,000 instead of your full-time salary of $8,000. What is the opportunity cost of going to college this term, assuming that your room and board expenses would be the same even if you did not go to college? 1) $10,000 2) $13,000 3) $15,000 4) $18,000

3

What would happen in the market for knee replacement surgery if insurance companies started to cover a smaller portion of the cost of the surgery, and fewer doctors decide to enter the field of joint replacement surgery? 1) Demand will decrease, but this will not shift the supply curve. 2) Supply will decrease, but this will not shift the demand curve. 3) Demand and supply will both decrease. 4) Demand will decrease and supply will increase.

3

Which of the following is an example of an implicit cost a firm might incur? 1) the wages paid to employees 2) the payment for medical insurance coverage 3) the opportunity cost to investors of the funds invested in the firm 4) utility payments

3

Which of the following would cause both the equilibrium price and equilibrium quantity of barley (assume that barley is an inferior good) to increase? 1) an increase in consumer income 2) a drought that sharply reduces barley output 3) a decrease in consumer income 4) unusually good weather that results in a bumper crop of barley

3

All else equal, an increase in the price of complementary products for the Apple Watch, such as Sensoria's wearable technology, would 1) shift the supply curve for the Apple Watch to the right. 2) shift the supply curve for the Apple Watch to the left. 3) shift the demand curve for the Apple Watch to the right. 4) shift the demand curve for the Apple Watch to the left.

4

An increase in the demand for peanuts due to changes in consumer tastes, accompanied by an increase in the supply of peanuts as a result of favorable growing conditions, will result in 1) an increase in the equilibrium quantity of peanuts and no change in the equilibrium price. 2) an increase in the equilibrium price of peanuts and no change in the equilibrium quantity. 3) an increase in the equilibrium price of peanuts; the equilibrium quantity may increase or decrease. 4) an increase in the equilibrium quantity of peanuts; the equilibrium price may increase or decrease.

4

If the production possibilities frontier is linear, then 1) opportunity costs are decreasing as more of one good is produced. 2) it is easy to efficiently produce output. 3) opportunity costs are increasing as more of one good is produced. 4) opportunity costs are constant as more of one good is produced.

4

The possible double taxation of income is a disadvantage for 1) sole proprietorships and partnerships. 2) partnerships and corporations. 3) sole proprietorships and corporations 4) corporations.

4

Which of the following would shift a nation's production possibilities frontier inward? 1) discovering a cheap way to convert sunshine into electricity 2) producing more capital equipment 3) an increase in the unemployment rate 4) a law requiring workers to retire at age 50

4

You have a bond that pays $125 per year in coupon (or interest) payments. Which of the following would result in an increase in the price of your bond? 1) Coupon payments on newly-issued bonds rise to $140 per year. 2) The likelihood that the firm issuing your bond will default on debt increases. 3) The price of a share of stock in the company falls. 4) Coupon payments on newly-issued bonds fall to $75 per year.

4

16) If the BLS counted persons that are on active military service in the totals for employment, the labor force, or the working-age population, this would A) decrease the measured unemployment rate. B) decrease the measured labor force participation rate. C) decrease the number of persons in the labor force. D) decrease the number of persons in the working-age population.

A

4) The Bureau of Labor Statistics would categorize a person as ________ if they were temporarily away from their job because they were ill. A) employed B) unemployed C) a discouraged worker D) out of the labor force

A

Suppose Bob works for Mary as a proofreader. Mary and Bob fall deeply in love, marry, and have eight children. Bob stops working for Mary in order to care for the children. What will be the effect on GDP? A) GDP will decrease. B) GDP will increase. C) GDP will not change. D) GDP may increase or may decrease depending on inflation.

A

What is the largest component of spending in the United States? A) consumption spending B) investment spending C) government spending D) net investment spending

A

Which of the following are not considered part of government purchases? A) welfare benefits B) teachers' salaries paid by a local government C) a tank purchased by the federal government D) a bridge purchased by the state government

A

12) The unemployment rate equals the number of unemployed divided by the ________, all times 100. A) number of employed B) labor force C) working-age population D) total population

B

13) Suppose the government launches a successful advertising campaign that convinces workers with high school degrees to quit their jobs and become full time college students. This would cause A) the unemployment rate to decrease. B) the labor force participation rate to decrease. C) the number of discouraged workers to increase. D) no change in the unemployment rate.

B

18) Which of the following cause the unemployment rate as measured by the Bureau of Labor Statistics to understate the true extent of joblessness? A) inflation B) discouraged workers C) people employed in the underground economy D) unemployed persons falsely report themselves to be actively looking for a job

B

3) The unemployment rate is an important economic statistic that can tell us about the health of the economy. If the unemployment rate turns out to be high or higher than anticipated, we would expect A) it is more likely that an incumbent president will be re-elected. B) that stock prices are more likely to fall. C) that jobs are less difficult to find. D) that investors will be more optimistic about the economy.

B

7) Suppose that homemakers are included as employed in the labor force statistics, rather than being counted as out of the labor force. This would A) increase the measured unemployment rate. B) increase the measured labor force participation rate. C) decrease the number of persons in the labor force. D) decrease the number of persons in the working-age population.

B

An outward shift of a nation's production possibilities frontier can occur due to A) a reduction in unemployment. B) a natural disaster like a hurricane or bad earthquake. C) a change in the amounts of one good desired. D) an increase in the labor force.

B

Gross domestic product in the economy is measured by the A) total number of goods and services produced in the economy. B) dollar value of all final goods and services produced in the economy. C) total number of goods produced in the economy. D) total number of services produced in the economy.

B

Suppose there is some unemployment in the economy and society decides that it wants more of one good. Which of the following statements is true? A) It is not possible to achieve this unless technology advances. B) It can increase output without giving up another good by employing more resources. C) It will have to increase resource supplies. D) It will have to give up production and consumption of some other good.

B

The production possibilities frontier shows A) the various products that can be produced now and in the future. B) the maximum attainable combinations of two products that may be produced in a particular time period with available resources. C) what an equitable distribution of products among citizens would be. D) what people want firms to produce in a particular time period.

B

Which of the following statements is true about a simple circular flow model? A) Producers are neither buyers nor sellers in the product market. B) Households are neither buyers nor sellers in the input market. C) Producers are buyers in the factors market. D) Households are sellers in the product market.

B

11) Suppose the labor force stays constant, and the working-age population stays constant, but a greater number of persons who were unemployed become employed. The labor force participation rate will A) increase. B) decrease. C) remain constant. D) not change in a way that can be predicted.

C

14) Someone who is available for work but has not actively looked for work in the previous four weeks would be classified as A) employed. B) unemployed. C) not in the labor force. D) not in the working-age population.

C

15) The labor force participation rate equals the A) (number of employed divided by the labor force) × 100. B) (labor force divided by the number of people not in the labor force) × 100. C) (labor force divided by working-age population) × 100. D) (labor force divided by the total population) × 100.

C

17) Which of the following labor market statistics best indicates the amount of labor that is available to the economy from a given working-age population? A) unemployment rate B) discouraged-worker ratio C) labor force participation rate D) the ratio of minimum wage to inflation

C

6) The labor force equals the number of people A) employed. B) unemployed. C) employed plus unemployed. D) in the working-age population.

C

A student comments to his roommate that the only way he will be able to pass his final exams is to not sleep for the next three days. This statement suggests that A) students are more concerned about good grades than good health. B) society should value sleep more highly than good grades. C) there is a trade-off between studying and sleep. D) society should value good grades more highly than sleep because students can catch up on their sleep once final exams are over.

C

Comparative advantage means A) the ability to produce more of a product with the same amount of resources than any other producer. B) the ability to produce a good or service at a lower opportunity cost than any other producer. C) the ability to produce a good or service at a higher opportunity cost than any other producer. D) compared to others you are better at producing a product.

C

If a vineyard wants to raise funds to purchase a new bottling machine, it does so in the A) factor market. B) output market. C) product market. D) alcoholic beverages market.

C

Individuals who have never been the best at doing anything A) cannot have a comparative advantage in producing any product. B) can still have a comparative advantage in producing some product. C) perform all tasks at a higher opportunity cost than others. D) must have an absolute advantage in at least ones task.

C

The economy has gone into a recession. You have majored in computer science and, because of the recession, have difficulty in finding a job. Should you go back to school and get a second major? A) Yes, the recession will ensure that you will never find a job as a programmer. B) Yes, the recession will lower income in my field permanently. C) No, the recession will most likely be short-lived and I can get a job after it is over. D) No, the recession will have no impact on my ability to get a job or my future income.

C

Which of the following goods is directly counted in GDP? A) the lettuce that Subway purchases for its sandwiches B) the bread that Subway purchases for its sandwiches C) a 12-inch Subway sandwich purchased by a student D) the plastic bags that Subway purchases to wrap its sandwiches

C

10) Suppose the working-age population of a fictional economy falls into the following categories: 90 are retired or homemakers, 60 have full-time employment, 20 have part-time employment, 20 do not have employment, but are actively looking for employment, and 10 would like employment but do not have employment and are not actively looking for employment. The official unemployment rate as calculated by the U.S. Bureau of Labor would equal A) (20/60) × 100. B) (20/80) × 100. C) (30/80) × 100. D) (20/100) × 100.

D

19) Which of the following cause the unemployment rate as measured by the Bureau of Labor Statistics to overstate the true extent of joblessness? A) inflation B) discouraged workers C) counting people as employed who are working part time, although they would prefer to be working full time D) unemployed persons falsely report themselves to be actively looking for a job

D

20) Which of the following explains the changes in the U.S. adult male labor force participation rate since 1948? A) More men are joining the military as compared to the past. B) More men are retiring later in life as compared to the past. C) Fewer men consider themselves discouraged workers as compared to the past. D) Younger men are remaining in school longer as compared to the past.

D

5) The Bureau of Labor Statistics would categorize a retiree who is not working as A) employed. B) unemployed. C) a discouraged worker. D) out of the labor force.

D

A transfer payment is a payment by the government to an individual A) for a service. B) for an investment good. C) for a consumption good. D) for which the government does not receive a good or service in return. E) for a debt owed.

D

Gross domestic product understates the total production of final goods and services because of the omission of A) exports. B) inflation. C) intermediate goods. D) household production.

D

If the production possibilities frontier is linear, then A) opportunity costs are decreasing as more of one good is produced. B) it is easy to efficiently produce output. C) opportunity costs are increasing as more of one good is produced. D) opportunity costs are constant as more of one good is produced.

D

Investment, as defined by economists, would not include which of the following? Ford A) buys a new robotic machine (from a plant in Ohio) to assemble cars. B) adds 1,000 new cars to inventories. C) builds another assembly plant in the United States. D) buys U.S. government bonds.

D

Suppose in 2016, you purchase a house built in 2003. Which of the following would be included in the gross domestic product for 2016? A) the value of the house in 2016 B) the value of the house in 2003 C) the value of the house in 2016 minus depreciation D) the value of the services of the real estate agent

D

The nominal GDP of the U.S. in 2015 was approximately $17.3 trillion. This means that A) the value of output in 2015 was around $17.3 trillion. B) total income in 2015 was around $17.3 trillion. C) total spending in 2015 was around $17.3 trillion. D) all of the above are true.

D

Which of the following is a factor of production? A) a sofa produced by a furniture manufacturer B) 20 shares of Microsoft stock C) the janitor at the local elementary school D) $500 in cash

D