Macro Unit 1 & 2

$80.

$16 \ / Sd \ / $14 \ / \ / $12 x / \ $10 / \ / \ $08 / \ / \ $06 / \ / \ $04 / \ / \ $02 / \ Dd 00 10 20 30 40 50 60 70 80 90 Quantity The world price of the product is $6. If the market is open to international trade but there is a tariff of $2 per unit imposed, the total government revenue generated by the tariff would be Multiple Choice: $40. $60. $80. $100.

An increase in the cost of maintaining the equipment used in wheat farming.

$5 S3 S1 S2 / / / $4 / / / / b / $3 / / / / / / $2 / a / / / $1 / / / / 0 2 4 6 8 10 12 14 16 18 20 Quantity Supplied (thousands of bushels per week) The diagram shows three supply curves for wheat. Which of the following would cause the supply of wheat to shift from S1 to S3? Multiple Choice: A decrease in the price of wheat. A decrease in the cost of maintaining the equipment used in wheat farming. An increase in the cost of maintaining the equipment used in wheat farming. An increase in the number of acres of farmland allocated to wheat.

A decrease in the price of water.

$5 S3 S1 S2 / / / $4 / / / / b / $3 / / / / / / $2 / a / / / $1 / / / / 0 2 4 6 8 10 12 14 16 18 20 Quantity Supplied (thousands of bushels per week) The figure shows three supply curves for wheat. Which of the following would cause the supply of wheat to shift from S1 to S2? Multiple Choice: A new tax on wheat production. An increase in the price of wheat. An increase in the price of water. A decrease in the price of water.

A decrease in the price of wheat.

$5 S3 S1 S2 / / / $4 / / / / b / $3 / / / / / / $2 / a / / / $1 / / / / 0 2 4 6 8 10 12 14 16 18 20 Quantity Supplied (thousands of bushels per week) The figure above shows three supply curves for wheat. Which of the following would cause the quantity of wheat supplied to decrease from point b to point a? Multiple Choice: A decrease in the price of wheat. An increase in the price of wheat. A subsidy for wheat production. A tax on wheat production.

Decrease price and affect the equilibrium quantity in an indeterminate way.

A decrease in demand and an increase in supply will Multiple Choice: Affect price in an indeterminate way and decrease the equilibrium quantity. Increase price and affect the equilibrium quantity in an indeterminate way. Decrease price and affect the equilibrium quantity in an indeterminate way. Decrease price and increase the equilibrium quantity.

A decrease in the number of sports fishers.

A decrease in the demand for recreational fishing boats might be caused by Multiple Choice: A decrease in the number of sports fishers. An increase in the number of sports fishers. An increase in the price of fishing boats. A decrease in the price of fishing boats.

Increase in the price of new homes and decrease in quantity.

A headline reads "Lumber Prices Up Sharply." In a competitive market, this situation would lead to a(n) Multiple Choice: Increase in the price and quantity of new homes. Decrease in the price and quantity of new homes. Increase in the price of new homes and decrease in quantity. Decrease in the price of new homes and increase in quantity.

Decrease, Increase

A large increase in the supply of HD-TV sets occurs simultaneously with a smaller decrease in its demand. As a result, the equilibrium price will __________ and the equilibrium quantity will __________. Multiple Choice: Increase, Decrease Increase, Increase Decrease, Decrease Decrease, Increase

Attainable and efficient.

A point or combination that is on the production possibilities frontier is Multiple Choice: Attainable and efficient. Unattainable, but not efficient. Unattainable and efficient. Attainable, but not efficient.

Have unlimited economic wants but limited resources.

A recurring theme in economics is that people Multiple Choice: Have unlimited economic wants but limited resources. Can increase resources by limiting their economic wants. Have unlimited resources but limited economic wants. Have limited economic wants and limited resources.

An amount greater than GDP for that year.

Adding up the market value of all final and intermediate goods and services in an economy in a given year would result in Multiple Choice: The calculation of GDP for that year. The calculation of NDP for that year. An amount less than GDP for that year. An amount greater than GDP for that year.

The quantity supplied will increase, which explains the shape of the supply curve.

All else being equal, if the law of supply states that as the price of a good, service, or resource rises Multiple Choice: The quantity demanded will decrease, which explains the shape of the supply curve. The quantity supplied will decrease, which explains the shape of the supply curve. The quantity demanded will increase, which explains the shape of the supply curve. The quantity supplied will increase, which explains the shape of the supply curve.

Comparative advantage.

An individual should specialize in the production of a good for which he/she has a Multiple Choice Conditional advantage. Determined advantage. Comparative advantage. General advantage.

$72 per person.

Assume that the real GDP of a developing nation increases from $120 billion to $140 billion while its population expands from 100 to 110 million. As a result, real GDP per capita has increased by about Multiple Choice: $56 per person. $64 per person. $72 per person. $88 per person.

Quantity decreases and price is indeterminate.

Due to a recent hurricane there is a major loss of sugarcane crops. At the same time in the U.S. consumers are eating healthier and cutting back on eating items that have sugar in them. How will this affect the price and quantity in the sugar market? Multiple Choice: Quantity decreases and price is indeterminate. Quantity increases and price is indeterminate. Price increases and quantity is indeterminate. Price decreases and quantity is indeterminate

Goods and services purchased by ultimate users, rather than for resale or further processing.

Final goods and services refer to Multiple Choice: Goods and services that are unsold and therefore added to inventories. Goods and services whose value has been adjusted for changes in the price level. The excess of U.S. exports over U.S. imports. Goods and services purchased by ultimate users, rather than for resale or further processing.

Marginal cost of waiting is greater than the marginal benefit of being served.

From an economic perspective, when consumers leave a fast-food restaurant because the lines to be served are too long, they have concluded that the Multiple Choice: Marginal cost of waiting is greater than the marginal benefit of being served. Management is exhibiting irrational behavior by not maximizing profits. Marginal cost of waiting is less than the marginal benefit of being served. Management is making an assumption that other things are equal.

Consumption, investment, government purchases, and net exports.

GDP can be calculated by summing Multiple Choice: Consumption, investment, government purchases, exports, and imports. Consumption, investment, government purchases, and net exports. Consumption, investment, wages, and rents. Consumption, investment, government purchases, and imports.

Increases

Gains from specialization and mutually beneficial trade _________ wealth or well-being. Multiple Choice: Decreases Increases Moderates Dilutes

Inferior

Hot dogs and hamburgers might be considered _____ goods compared to steak. Multiple Choice Normal Inferior Complementary Substitutable

Price of the Model T decreased and quantity produced increased.

How did production improvements like an assembly line help the market of Model T cars? Multiple Choice: Price of the Model T decreased and quantity produced decreased. Price of the Model T decreased and quantity produced increased. Price of the Model T increased and quantity produced decreased. Price of the Model T increased and quantity produced increased.

GDP is less than the sum of consumption, investment, and government purchases.

If a country's imports of goods and services exceeds its exports Multiple Choice: Net exports are positive. GDP exceeds the sum of consumption, investment, and government purchases. GDP is less than the sum of consumption, investment, and government purchases. GDP equals the sum of consumption, investment, and government purchases.

2128.

In the year 2020, Alpha has a real GDP of $80 billion and Omega has a real GDP of $10 billion. If Alpha has a growth rate of 2% and Omega has a growth rate of 4%, in what year will Omega catch up to Alpha? Multiple Choice: 2092. 2128. 2024. 2108.

Jane

Jake's Production Possibilities Schedule Pounds of Green Beans: 0, 10, 20, 30, 40 Pounds of Corn: 160, 120, 80, 40, 0 Jane's Production Possibilities Schedule Pounds of Green Beans: 0, 20, 40, 60, 80 Pounds of Corn: 80, 60, 40, 20, 0 Who has the comparative advantage in the production of green beans? Multiple Choice: Jake Both Neither Jane

Counted in GDP because Joe purchased the gas.

Joe and Pam are neighbors. Joe asks Pam to drive him to the airport. Before leaving, Joe pays for Pam to fill her car's gas tank at the local gas station. Joe's trip to the airport would be Multiple Choice: Counted in GDP because Joe purchased the gas. Counted in GDP because Joe and Pam represent different households. Not counted in GDP because the trip does not involve any formal market transactions. Not counted because nothing was actually produced.

Bureau of Economic Analysis.

National income accounts are compiled by the Multiple Choice: National Bureau of Economic Research. Bureau of Economic Analysis. National Census Bureau. Council of Economic Advisers.

Increase consumption and income.

Nations specialize in production and engage in international trade in order to Multiple Choice: Protect domestic consumers and producers. Increase consumption and income. Improve transportation. Increase employment.

$25.

Price per Unit, Quantity Purchased by Consumer, Quantity Sold by Producer $05 2,000 0; $10 1,800 300; $15 1,600 600; $20 1,400 900; $25 1,200 1,200; $30 1,000 1,500; In the market shown in the table, the marginal benefit of 1,200th unit is Multiple Choice: $20. $15. $25. $10.

A decrease in quantity supplied.

S1 S2 P / / R x / I / / C y / E / / Quantity A movement along the supply schedule from point x to point y depicts Multiple Choice: A decrease in quantity supplied. An increase in supply. A decrease in supply. An increase in quantity supplied.

Diminishing marginal product.

S1 S2 P / / R x / I / / C y / E / / Quantity A movement along the supply schedule from point y to point x is associated with Multiple Choice Increasing marginal utility. Increasing marginal product. Diminishing marginal product. Diminishing marginal utility.

Higher total output.

Specialization and international trade between individuals or between nations leads to Multiple Choice: Greater self-sufficiency. Higher product prices. Higher utilization of resources. Higher total output.

Nominal GDP in 2010 is $500 billion.

Suppose the total monetary value of all final goods and services produced in a particular country during one year is $500 billion, and the total monetary value of final goods and services sold is $450 billion. We can conclude that Multiple Choice: Nominal GDP in 2010 is $450 billion. Nominal GDP in 2010 is $500 billion. Real GDP in 2010 is $450 billion Inventories in 2010 fell by $50 billion.

Price decreases and quantity increases.

Suppose there is new fertilizer technology which allows avocados to be grown using less water, how might this affect the market for avocados? Multiple Choice: Price increases and quantity decreases. Price increases and quantity increases. Price decreases and quantity decreases. Price decreases and quantity increases.

Market price.

The U.S. produces and sells millions of different products. To aggregate them together into a single measure of domestic output, the quantity of each good produced is weighted by its Multiple Choice: Cost of production. Utility to consumers. Contribution to corporate profits. Market price.

A consequence of the fact that productive resources are scarce relative to economic wants.

The economizing problem faced by a society is Multiple Choice: That product prices often rise more rapidly than incomes of consumers. To establish prices that are fair for both producers and consumers. A consequence of the fact that productive resources are scarce relative to economic wants. To achieve a more equitable distribution of income in the society.

Price and quantity demanded are inversely related.

The law of demand states that, all else held constant, Multiple Choice: Price and quantity demanded are directly related. Price and quantity demanded are inversely related. The larger the number of buyers in a market, the lower the product price will be. Consumers will buy more of a product at high prices than at low prices.

Innovate.

The main function of the entrepreneur is to Multiple Choice: Create market demand. Purchase capital. Innovate. Make routine pricing decisions.

Product that the consumer could have bought instead of cigarettes.

The opportunity cost to a consumer who smokes cigarettes consists of the Multiple Choice: Cost of complementary products such as lighters, ashtrays, and cigarette holders. Costs imposed on others who inhale second-hand smoke. Product that the consumer could have bought instead of cigarettes. Amount of cigarette taxes paid by this consumer.

Current consumption sacrificed for capital formation.

The principle economic cost of growth is Multiple Choice: Higher interest rates. Higher inflation rates. Current consumption sacrificed for capital formation. Investment in stocks and bonds.

Resource markets.

The simple circular flow model shows that workers and capital-owners offer their services to firms through the Multiple Choice: Employment agencies. Resource markets. Government agencies. Product markets.

Both producers are following the law of supply.

The table below shows the supply schedule for Adam and Ben, both producers in the market for hamburgers. Market for Hamburgers [Price] [Adam's Quantity Supplied] [Ben's Quantity Supplied] $12 100 10 $14 125 15 $16 150 20 $18 175 25 $20 200 30 Which statement is true concerning the supply schedules and the law of supply? Multiple Choice: Only Ben is following the law of supply. Neither producer is following the law of supply. Only Adam is following the law of supply. Both producers are following the law of supply.

Decrease from 37 to 24.

The table below shows the weekly demand for hamburgers in a market where there are just three buyers. [Price] [Quantity Demanded by Buyer 1] [Quantity Demanded by Buyer 2] [Quantity Demanded by Buyer 3] $6 7 4 6 $5 9 7 8 $4 15 10 12 $3 21 15 16 Refer to the above table. If the price of a hamburger increases from $4 to $5, then the weekly market quantity of hamburgers demanded will Multiple Choice: Decrease from 52 to 24. Increase from 24 to 52. Decrease from 37 to 24. Increase from 24 to 37.

2,000.

The table below shows the weekly demand for hamburgers in a market where there are just three buyers. [Price] [Quantity Demanded by Buyer 1] [Quantity Demanded by Buyer 2] [Quantity Demanded by Buyer 3] $6 7 4 6 $5 9 7 8 $4 15 10 12 $3 21 15 16 Refer to the table. If there were 200 buyers in the market, each with a demand schedule identical to Buyer 2, then the weekly quantity of hamburgers demanded in the market at a price of $4 would be Multiple Choice: 800. 2,000. 37,000. 3,000.

Prices at which firms would be willing and able to sell their different products

The vertical axis of a graph that shows a market supply curve indicates the Multiple Choice: Cost of the amount of output produced. Various quantities of output at which the market will be cleared. Prices at which firms would be willing and able to sell their different products Number of sellers who are in the market for this product.

Quantity demanded is less than quantity supplied.

There is a surplus in a market for a product when Multiple Choice: The current price is lower than the equilibrium price. Demand is less than supply. Quantity demanded is less than quantity supplied. Quantity demanded is greater than quantity supplied.

Reduce current rates of consumption spending.

To increase future living standards by pursuing higher current rates of investment spending, an economy must Multiple Choice: Reduce current rates of consumption spending. Allow higher rates of current consumption. Reduce the current capital stock. Decrease the amount of future research and development spending.

7,500 billion.

Use the following table to answer the next question. The following national income data for an economy is in billions of dollars. [Consumption] [$5,100] [Investment] [$1,100] [Transfer payments] [$1,050] [Government purchases] [$1,400] [Exports] [$850] [Imports] [$950] [Net foreign factor income] [$20] GDP for this economy is Multiple Choice: $6,400 billion. $7,500 billion. $9,400 billion. $10,470 billion.

Quantity demand is a number while demand is the whole curve.

What is the difference between demand and quantity demand? Multiple Choice: Demand is inversely related to a change in price. Quantity demand is the directly related to a change in price. Demand is a number while quantity demanded is the whole curve. Quantity demand is a number while demand is the whole curve.

The whole demand curve or schedule.

When economists speak of "demand" in a particular market, they refer to Multiple Choice One price-quantity combination on the demand schedule. One point on the demand curve. How much of an item buyers want to buy at a given price. The whole demand curve or schedule.

People moving into the community will have difficulty locating residential space to rent.

Which is most likely to be observed in a community where price ceilings are imposed on residential rents? Multiple Choice: Poor people will be able to find adequate housing. Homeowners will reduce their own use of housing space, making more available to others. Those whose needs for housing are most urgent will be able to obtain the space they want. People moving into the community will have difficulty locating residential space to rent.

If demand decreases, then price will decrease.

Which is of the following statements is correct? Multiple Choice: If demand increases, then price will decrease. If demand decreases, then price will decrease. If price increases, then demand will decrease. If price decreases, then demand will decrease.

Generic detergent.

Which of the following goods would most likely be an inferior good? Multiple Choice: French wines. Steak. Theater tickets. Generic detergent.

A computer programmer.

Which of the following is a labor resource? Multiple Choice: A piece of software used by a firm. Silicon (sand) used to make computer chips. A computer. A computer programmer.

Additional.

Which of the following is the best synonym for "marginal" in economics? Multiple Choice: Basic. Scarce. Minor. Additional.

If supply increases and demand decreases, equilibrium price will fall.

Which of the following statements is correct? Multiple Choice: If demand increases and supply decreases, equilibrium price will fall. If supply increases and demand decreases, equilibrium price will fall. If demand decreases and supply increases, equilibrium price will rise. If supply declines and demand remains constant, equilibrium price will fall.

"There is no such thing as a free lunch"

Which one of the following expressions best states the idea of opportunity cost? Multiple Choice: "He who hesitates is lost." "A penny saved is a penny earned." "All that glitters is not gold." "There is no such thing as a free lunch"

What policies would be recommended for stimulating national economic growth?

Which question is an example of a macroeconomic question? Multiple Choice: What market conditions are expected for milk in the nation this year? What economic incentives can be used to reduce the cost of health care in the nation? What policies would be recommended for stimulating national economic growth? What is the level of industrial concentration in the US automobile industry?

Farmers would not be able to sell all their wheat.

[Bushels Demanded Per month] [Price per Bushel] [Bushels Supplied Per Month] 45 $5 77 50 $4 73 56 $3 68 61 $2 61 67 $1 57 If the price in this market was $4 Multiple Choice: The market would clear; quantity demanded would equal quantity supplied. Buyers would want to purchase more wheat than is currently being supplied. Farmers would not be able to sell all their wheat. There would be a shortage of wheat.

A shortage of 1,000 units.

[Price per Unit] [Quantity Demanded per Year] [Quantity Supplied per Year] $5 2,000 0 $10 1,800 300 $15 1,600 600 $20 1,400 900 $25 1,200 1,200 $30 1,000 1,500 At a price of $15 per unit, which of the following would exist? Multiple Choice: A shortage of 1,600 units. A surplus of 1,000 units. A shortage of 1,000 units. A surplus of 600 units.

Lower than $25.

[Price per Unit] [Quantity Demanded per Year] [Quantity Supplied per Year] $5 2,000 0 $10 1,800 300 $15 1,600 600 $20 1,400 900 $25 1,200 1,200 $30 1,000 1,500 There will be a shortage whenever the price is Multiple Choice: Higher than $25. Higher than $30. Lower than $25. Equals $25.

A surplus of 200 units.

[Price] [Quantity Demanded] [Quantity Supplied] $60 100 400 $50 140 340 $40 180 280 $30 220 220 $20 260 160 $10 300 100 The government's introduction of a guaranteed price floor of $50 will result in Multiple Choice: A surplus of 200 units. A shortage of 200 units. No shortage or surplus. An unstable market.

615 units.

[Price] [Quantity Supplied ABC Inc] [Quantity Supplied HIJ Inc] [Quantity Supplied LMN Inc] [Quantity Supplied XYZ Inc] $0 0 0 0 0 $100 50 200 80 75 $200 100 300 90 125 $300 150 400 100 150 $400 200 500 120 200 What is the market supply if the price is $200? Multiple Choice: 405 units. 615 units. 800 units. 1,020 units.

$400.

[Quantity Demanded Domestically] [Price] [Quantity Supplied Domestically] 1,400 $10 2,200 1,600 $09 2,000 1,800 $08 1,800 2,000 $07 1,600 2,200 $06 1,400 2,400 $05 1,200 Assume the small-country model is applicable. If the world price of the product is $6 and a tariff of $1 per unit is applied to imports of the product, then the tariff would generate government revenues of Multiple Choice: $600. $400. $800. $1,200.

Import 400 units.

2.50 \ / \ / 2.00 \ / \ / 1.50 X / \ 1.00 / \ / \ 0.50 / \ / \ 0 Dd When the world price for this product is $0.50, Marketopia will Multiple Choice: Import 500 units. Import 100 units. Import 400 units. Export 100 units.

A subsidy for wheat production.

5 S3 S1 S2 / / / 4 / / / / / / 3 / / / / / / 2 / / / / / 1 / / / / 0 2 4 6 8 10 12 14 16 18 20 Quantity Supplied (thousands of bushels per week) The figure above shows three supply curves for wheat. Which of the following would cause the supply of wheat to shift from S1 to S2? Multiple Choice: A subsidy for wheat production. An increase in the price of wheat. A tax on wheat production. A decrease in the price of wheat.

A decrease in consumer incomes.

5 \ \ \ 4 \ \ \ \ \ 3 \ \ \ \ \ \ 2 \ \ \ \ \ \ 1 \ \ \ D3 D1 D2 0 2 4 6 8 10 12 14 16 18 20 Quantity Demanded (thousands of pounds per weeks) Refer to the above diagram and assume that steak is a normal good. Which of the following would shift the demand for steak from D1 to D3? Multiple Choice: An increase in consumer incomes. A decrease in consumer incomes. A decrease in the price of steak. An increase in the price of steak.

An increase in consumer incomes.

5 \ \ \ 4 \ \ \ \ \ 3 \ \ \ \ \ \ 2 \ \ \ \ \ \ 1 \ \ \ D3 D1 D2 0 2 4 6 8 10 12 14 16 18 20 Quantity Demanded (thousands of pounds per weeks) Refer to the three demand curves for pasta and assume that pasta is an inferior good. Which of the following would shift the demand for pasta from D1 to D3? Multiple Choice: A decrease in consumer incomes. A decrease in the price of pasta. An increase in the price of pasta. An increase in consumer incomes.

Income levels.

Benefits from international trade are not based on differences in Multiple Choice: Resource availability. Technological capabilities. Product quality and other attributes. Income levels.