Macro Test 1
Which would be a likely cause of an increase in the demand for pizza?
a health report stating that eating pizza reduces stress
Refer to the table. Suppose that demand is represented by columns (3) and (2) and supply is represented by columns (3) and (5). If the price were artificially set at $6:
a shortage of 40 units would occur
Which of the following will cause the demand curve for product A to shift tot he left?
an increase in money income if A is a normal good
A leftward shift of the supply curve for oil in the US is most likely to result from
an increase in the costs of exploration and drilling for oil
Suppose that coffee growers sell 200 million pounds of coffee beans at $2 per pound in 2015 and 240 million pounds for $3 per pound 2016. Based on this information, we can conclude that the
demand for coffee beans has increased
A decrease in demand and in an increase in supply will
decrease piece and affect the equilibrium quantity in an indeterminate way
Assume in a competitive market that price is initially above the equilibrium level. We can predict that price will:
decrease, quantity demanded will increase, and quantity supplied decreased.
A worker who loses a job at a call center because business firms switch the call center to another country is an example of:
disguised unemployment
An increase in the price of product A will
increase the demand for substitute product B.
Suppose that at prices of $1, $2, $3, $4, and $5 for product Z, the corresponding quantities supplies are 3, 4, 5, 6, and 7 units. Which of the following would increase the quantities supplied of Z to say 6,8,10,12 and 14 units at these prices?
Improved technology for producing z
In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product x upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (p) of X: and (3) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X
Increase D, increase P, and Decrease Q
With a downsloping demand curve and an upsloping supply curve for a product, an increase in consumer income will:
Increase equilibrium price and quantity if the product is a normal good
When the price of oil declines significantly, the price of gasoline also declines. The latter occurs because of a(n):
Increase in the supply of gasoline.
refer to the diagram, which shows demand and supply conditions in the competitive market for product X. Other things equal, a shift of the supply curve fro S0 to S1 might be caused by
Increase in the wage rates paid to laborers employed in the production of X
A firms supply curve is upscoping because
beyond some point, the production costs of additional units of output will rise
Suppose that GDP was $200 billion in year 1 and that all other components of expenditures remained the same in year 2 except that business inventories increased by $10 billion. GDP in year 2 is:
$190 billion
answer the question on the basis of the given supply and demand Data for wheat?
$2.00
If demand decrease by 4 units at each price and supply decreased by 2 units at each price, what would be the new equilibrium price and quantity be
$4 and 4 units
The two ways of looking at GDP are the:
Expenditures approach and income approach
Suppose that a person's nominal income rises from $10,000 to $12,000 and the consumer price index rises from 100 to 105. The person's real income will:
Rise about 15 percent
Assume a drought in the Great Plains reduces the supply of wheat. Noting that wheat is a basic ingredient in the production of bread, and potatoes are a consumer substitute for verism we winked expect the price of wheat to
Rise, the supply of bread to decrease and the demand for potatoes to increase
Government purchases in national income accounts (such as GDP) would include payments for
Salaries for current U.S. military officers
refer to the diagram. A increase in supply is depicted by a
Shift from S2 to S1
Innovations such as the microchip and the Internet lead to business cycle variations because:
Significant innovations occur irregularly and unexpectedly
an increase in the price of a product b leads to an increase in the demand for product C. This indicates that product B and C are
Substitute goods
in 2007, the price of oil increased, which in turn caused the price of natural gas to rise. This can best be explained by saying that oil and natural gas are known as:
Substitute goods, and the higher the price for oil increased the demand for natural gas
Plastic manufacturers can make either toys or plastic containers. if the pries and profitability of plastic toys increase, then the
Supply of plastic containers will decrease
When the price of a product falls, the purchasing power of our money income rises and thus permits consumers to purchase more of the product. This describes:
The income effect
Which statement is correct?
The production of nondurable consumer goods is more stable than the production of durable consumer goods over the business cycle
The Phase of the business cycle in which real GDP is at a minimum is called
The trough
GDP tends to underestimate the productive activity in the economy because it excludes the value of output from:
The underground economy
If in some year gross investment was $120 billion and net investment was $65 billion, then in that year the country's capital stock:
increased by $65 billion
refer to the diagram above, which shows three supply curves for corn. A movement from point A to point B is caused by a change in the
price of corn in the market
The growth of GDP may understate changes in the economy's economic well-being over time if the:
quality of products and services improves
In 2010, Tatum's nominal income rose by 4.6 percent and the price level rose by 1.6 percent. We can conclude that Tatum's real income:
rose by approximately 3 percent
cost-push inflation
reduces real output
A nation's capital stock was valued at $300 billion at the start of the year and $350 billion at the end. Consumption of private fixed capital in the year was $25 billion. Assuming stable prices, net investment was:
$75 billion
Refer to the diagram (bottom of previous page), which shows demand and supply conditions in the competitive market for product X. If the initial demand and supply curves are D0 and S0, equilibrium price and quantity will be
0F and 0C, respectively
The consumer price index was 177.1 in 2001 and 179.9 in 2002 therefore the rate of inflation in 2002 was about
1.6 precent
Which of the following will not cause the supply curve to shift?
A change in the price of the good
Cost push inflation be caused by
A negative supply shock
Which of the following diagrams illustrate(s) the fact of a decrease in incomes on the market for the second hand clothing
A only
Which statement best illustrates the concept of diminishing marginal utility
A typical consumer will receive less satisfaction from consuming the fourth hamburger than from the third hamburger in a week
inflation caused by rise in the prices of inputs is referred to as
Cost-push inflation
In the following questions you are asked to determine, other things equal, the effects of a given change in a determinant id demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X: and (3) the equilibrium quantity (Q) of X. If X is a normal good, an increase in income will
Decrease S, Increase P, and decrease Q
Real GDP refers to:
GDP data that have been adjusted for changes in the price level.
In which graph would the indicated shifts cause equilibrium quantity to definitely rise, but the effect on the price is indeterminate
Graph A
Select the graph above that best shows the change in the market specified in the following situation: the market for houses, when consumers experience a substantial fall in income due to a serious economic recession
Graph B
A higher price reduces the quantity demanded for a product because
Individuals can afford less of the product and will to switch substitutes
The natural rate of unemployment
Is equal to the total of frictional and structural unemployment
An "increase in the quantity supplied" suggests a
Movement up along the supply curve
In the treatment of U.S. exports and imports, national income accountants
add exports, but subtract imports, in calculating GDP
The industries or sectors of the economy in which business cycle fluctuations tend to affect output most are:
capital goods and durable consumer goods
In calculating the unemployment rate, part time workers are
counted as employed because they are receiving payment for work
which of the following types of unemployment is directly associated with insufficient overall demand for goods and services
cyclical unemployment
Suppose there are 5 million unemployed workers seeking jobs. After a period of time, 1 million of them become discouraged over their job prospects and cease to look for work. As a result of this, all else equal, the official unemployment rate would:
decline
In the following question you are asked to determine, other things equal, the effect of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (p) of X; and (3) the equilibrium quantity (Q) of X. An Increase in the price of a product that is a complement to X will
decrease D, decrease P, and decrease Q
An increase in the demand for corn is more than offset by an increase in its supply. As a result, the equilibrium price will
decrease and the equilibrium quantity will increase
other things equal, the imposition of an excise tax on a product will
increase its price
Data from the registrar's office at Gigantic State University indicate that over the past twenty years tuition and enrollment have both increased. From this information we can conclude that:
factors such as school age population, incomes, and preferences for education have increased the demand for education over a 20 year period
Final goods and services refer to:
goods and services purchased by ultimate users, rather than for resale or further processing.
select the graph that best shows the change pin the market specified in the following situation: the market for chicken, when the price of a substitute, such as beef, decreases
graph B
The value of corporate stocks and bonds traded in a given year Is
included in the calculation of gross private domestic investments
Given a downsloping demand curve and an upsloping supply curve for a product, an increase in the price of a substitute good will:
increase equilibrium price and quantity
refer to the above diagram for the milk market. there would be a shortage go milk whenever the price is
lower than $1.50
In calculating GDP, governmental transfer payments, such as social security or unemployment compensation, are:
not counted
Alex works in his own home as a homemaker and full-time caretaker of his children. Officially, he is:
not in the labor force
demand-pull inflation
occurs when total spending in the economy is excessive
refer to the above graph with three demand curves. An "increase in quantity demanded" would be illustrated by a change from
point 4 to point 1
A decrease in the price of digital cameras will
shift the demand curve for memory cards to the right.
Which of the following activities is excluded from GDP, causing GDP to understate a nations well-being?
the child care services provided by stay at home parents
Which of the following is not a determinant of demand for laptop computers
the cost of inputs for producing laptop computers
which of the following is included in GDP
the fees charged for a stock broker's services
In the second quarter (3-month period) of 2001, U.S. nominal GDP increased but U.S. real GDP declined. We can conclude that:
the price level rose by more than nominal GDP
which of the following is not economic investment
the purchase of 100 shares of AT&T by a retired business executive
A large underground economy results in an
understated GDP
GDP tends to overstate economic well-being because it takes into account:
unemployment benefits
Which of the following is not a component of GDP in the expenditures approach?
workers' wages and other compensation