practica

$35

###

290 to GDP

####

increase in the price of butter

****

Hours Needed to Make 1 Unit of Bread Lemonade England14 France52

24 units of bread and 15 units of lemonade.

Consider Miray's decision to go to college. If she goes to college, she will spend $24,000 on tuition, $12,000 on room and board, and $1,900 on books. If she does not go to college, she will earn $16,000 working in a store and spend $8,000 on room and board. Miray's cost of going to college is

24,000 + 12,000 + 1,900 + 8,000 =$45,900.

Refer to Figure 2-5. Which of the following events would explain the shift of the production possibilities frontier from A to B?

A general technological advance

Which of the following includes everyone in the adult population that the Bureau of Labor Statistics counts as "unemployed"? ***

Anyone who is not employed, is available for work, has looked for work in the past four weeks, and anyone who is waiting to be recalled from a job from which they have been laid off

What basket of goods and services is used to construct the CPI?

The goods and services that are typically bought by consumers as determined by government surveys

Which of the following statements is correct about the relationship between the nominal interest rate and the real interest rate?

The real interest rate is the nominal interest rate - the rate of inflation.

If Year 1 is the base year and Year 2 is the following year, then the inflation rate in Year 2 equals **

[(CPI in Year 2 − CPI in Year 1)/CPI in Year 1] × 100.

Trade between countries

allows each country to consume at a point outside its production possibilities frontier

Which of the following items is the one type of household expenditure that is categorized as investment rather than consumption?

buy a house

when the consumer price index falls, the typical family ****

can spend fewer dollars to maintain the same standard of living

For the purpose of calculating GDP, investment is spending on

capital equipment, inventories, and structures, including household purchases of new housing.

Communist countries

central planners were an the best position to determinate the allocation of scarce resources in the economy

A likely example of complementary goods for most people would be

coffee and sugar.

Making rational decisions at the margin means that people

compare the marginal costs and marginal benefits of each decision.

at the equilibrium price, the quantity of the the good that buyers are willing and able to buy *********

exactly equals the quantity that sellers are willing and able to sell

In the markets for goods and services in the circular-flow diagram,

firms provide households with output.

pizza is a normal good of demand ***

for pizza rises when income rise

Gross domestic product includes all

legal final goods and services, but it excludes illegal final goods and services.

Sandy has graduated from college and is devoting her time to searching for a job. She has seen plenty of openings but has not yet been offered one that best suits her tastes and skills. Sandy is: ***

frictionally unemployed. Frictional unemployment can exist even in the long run.

inferior goods

goods that consumers demand less of when their incomes rise

If an economy's GDP falls, then it must be the case that the economy's

income and expenditure both fall.

if the economy GDP falls then it must be the case***

income and expenditure both fall.

An increase in the price of a good will **

increase in quantity supplied

The percentage change in the price level from one period to another is called the

inflation rate

Absolute advantage is found by comparing different producers'

input requirements per unit of output

A farmer produces lemons and sells them to Fresh Juice, which makes lemon juice. The lemons produced by the farmer are called

intermediate goods

Unemployment compensation is **

is not part of GDP

A recession has traditionally been defined as a period during which

real GDP declines for two consecutive quarters.

labor fore equals the **

numbers of employed + the number of people unemployed

Candice is planning her activities for a hot summer day. She would like to go to the local swimming pool and see the latest blockbuster movie, but because she can only get tickets to the movie for the same time that the pool is open she can only choose one activity. This illustrates the basic principle that

people face tradeoffs

The adage, "There ain't no such thing as a free lunch," means

people face tradeoffs.

If a nonbinding price floor is imposed on a market, then the

quantity sold in the market will stay the same

the law of supply states that other things equal, when the price of good **

rises, the quantity supplied of good rise

The law of supply states that, other things equal, when the price of a good **

rises, the quantity supplied of the good rises.

Efficiency means that

society is getting the maximum benefits from its scarce resources

+if the number of buyers in a market decrease, then **

supply wil decrease

Alana decides to spend 2 hours working overtime rather than going shopping with her friends. She earns $11 per hour for overtime work. Her opportunity cost of working is

the enjoyment she would have received had she gone shopping.

Which of the following events could cause an increase in the supply of ceiling farm? **8

the number of sellers of ceiling farm increase

The marginal benefit Joseph gets from purchasing a fourth pair of shoes is

the total benefit he gets from purchasing five pairs of shoes minus the total benefit he gets from purchasing four pairs of shoes.

Economics is the study of how society manages its **

unlimited wants and limited resources

the opportunity cost of an item is ****

what you give up to get that item