Principles of Macroeconomics Quiz Questions

Milton Friedman asked Phil Donahue, where are you going to get these __________ to run your system?

Angels

Figure 5.3. Which demand curve is perfectly elastic?

D

Figure 6.17. How much total revenue does the government collect from the tax on this good?

$420.

Figure 7.13. If the price of the good is $500, then the producer surplus amounts to:

$700.

Table 7.7. If the market price is 1,000, the producer surplus in the market is:

$750.

Figure 6.17. Acme, Inc. is a seller of the good. Acme sells a unit of the good to a buyer and then pays the tax on that unit to the government. Acme is left with how much money?

$8.

Figure 7.13. If the price of the good is $600, then producer surplus amounts to:

$1,000.

Figure 6.14. The effective price that sellers receive after the tax is imposed is:

$10.

Figure 6.17. The price that buyers pay after the tax is imposed is:

$12.

Figure 7.4. If the price of the good is $12, then the consumer surplus is:

$16.

According to lecture, Wal-Mart produces how much consumer surplus per family per year?

$2,300

Figure 6.14. The price that buyers pay after the tax is imposed is:

$24.

Figure 7.4. If the price of the good is $6, then the consumer surplus is:

$36.

Figure 6.17. What is the amount of the tax per unit?

$4.

The Tax reform act of 2017 lowered corporate taxes from 35% to:

21%

Refer to table 2-4. What is the opportunity cost to Picnicland of increasing the production of hotdogs from 450 to 900?

225 burgers

In "The Dismal Science? Hardly!" Robert McTeer writes, "It once took 90% of our population to grow food. It now takes:"

3%

Tim Groseclose quotes Cynthia and David Romer when he says the "hump" in the Laffer Curve is at:

33%

Refer to figure 2-6. If this economy devotes all of its resources to the production of blankets, then it will produce:

360 blankets and 0 pillows

Refer to table 2-4. What is the opportunity cost to Picnicland of increasing the production of burgers from 450 to 750?

450 hotdogs

The richest 20% of Americans pay what percentage of the total income taxes:

84%

Refer to figure 4.9. Which of the following would cause the demand curve to shift from Demand A to Demand B in the market for golf balls in the United States?

An expectation that incomes will increase

Figure 5.3. Which demand curve is perfectly inelastic?

A

Refer to figure 2-1. Which arrow represents the flow of spending by households?

A

Figure 4.11. Which of the following would cause the supply curve to shift from Supply A to Supply C in the market for winter coats?

A decrease in the price of zippers used to make the coats.

Minimum wage is a price floor for labor that produces ______, which is also called ________.

A surplus, unemployment

Figure 7.19. At equilibrium, total surplus is represented by the area:

A+B+C+D+H+F

Figure 7.2. When the price is P1, the consumer surplus is:

A+B+C.

Who said, "The whole of science is nothing more than the refinement of everyday thinking"?

Albert Einstein

Trade between countries

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

Prices cause movement:

Along the demand and supply lines

The movement from point A to point B on the graph shows:

An increase in demand because the price went down

Refer to figure 2-1. Which arrow represents the flow of labor?

C

A legal maximum on the price at which a good can be sod is called a price:

Ceiling

Trade among nations is ultimately based on:

Comparative advantage

When a country considers whether it can make a product using fewer resources, it is applying:

Comparative advantage

In the social science iceberg, ________ are on top, and _______ are below the water.

Constructs, concepts

Total surplus in a market is equal to:

Consumer surplus + producer surplus

From the producer's point of view:....."love your neighbor" is _________ and "as you love yourself" is _________:

Consumer surplus, producer surplus

Macroeconomics studies what level?

Country

Figure 8.1. After the government imposes a tax of P' - P'''. The area measured by I+Y represents the:

Deadweight loss

What you give up to get that item is the definition of opportunity cost. In "The Marshmallow Test," Walter Mischel was testing:

Delayed Gratification

For a good that is a necessity:

Demand tends to be inelastic

Table 7.7. If the price is $775, who would be willing to supply the product?

Dianne and Evalina

The demand curve goes:

Down

______________ refers to the size of the economic pie, and equality refers to how the pie is divided.

Efficiency

Who gets richer from trade?

Everyone

"People face trade-offs" like students going to class or sleeping in. At the national level, this is typically called the trade-off between:

Guns and Butter

In general, elasticity is a measure of:

How much buyers and sellers respond to changes in prices.

Figure 8.1. Before the tax was imposed, consumer surplus was measured by:

J+K+I

Figure 8.1. Before the tax was imposed, total surplus was measured by:

J+K+L+M+I+Y

Figure 8.1. After the government imposes a tax of P' - P'''. Total surplus is:

J+M

Figure 8.1. Before the tax was imposed, producer surplus was measured by:

L+M+Y

The BRIC model uses the same three elements that the circular flow says households supply to firms:

Land, labor, capital

Figure 6.2. The price ceiling:

Makes it necessary for sellers to ration the good.

Economists build economic models by:

Making assumptions

The Greek word "oikonomos" means:

Management of a household

Principle 3 is: "Rational People Think at the:" (This is sometimes called the "adding one more" rule.)

Margin

The first supplier to leave the market as the price gets lower is called the:

Marginal supplier

In a free, competitive market, what is the rationing mechanism?

Price

Prices rise when the government:

Prints too much money

According to lecture, as industries concentrate and have fewer suppliers, there is more:

Producer surplus

Almost all variation in wealth, from one nation to another, is explained by the variance in:

Productivity

Table 7.3. If the market price for the good is $20, who will purchase the good?

Quilana, Wilbure, and Ming-la only

Refer to figure 2-4. This economy has the ability to produce at which points?

R, T, U

Adam Smith's book "The Wealth of Nations" proposed that scarce products get efficiently distributed via:

The invisible hand

According to lecture, the forces that cause movement of the demand curve are _______, and the forces that cause the movement of the supply curve are ________.

SPITE, SITE

Figure 6.2. The price ceiling causes a

Shortage of 85 units

The two words most often used by economists are:

Supply and demand

A tax on sellers will shift the:

Supply curve upward by the amount of the tax.

A movement along the supply curve is caused by a change in:

The price of the good.

If a price ceiling is imposed on the baby formula market, then:

The quantity of baby formula demanded will increase The quantity of baby formula supplied will decrease A shortage of baby formula will develop (All of the above)

Refer to 6.13. In this market, a minimum wage of $7.25 creates a labor

Surplus of 4,500 workers.

A tax on an imported good is called a:

Tariff

Two effects that cause the demand curve to shift:

Taste decrease Population increase

Figure 8.1. After the government imposes a tax of P' - P'''. The area measured by K+L represents:

Tax revenue.

Producer surplus is:

The amount a seller is paid minus the cost of production.

According to lecture, a rubric for remembering the relationship of floors and ceilings, is:

The ceiling is below the floor

The point at which a buyer will buy and the seller will sell is called:

The equilibrium price

When two countries trade with one another, it is most likely because:

The two countries wish to take advantage of the principle of comparative advantage.

In "The March of Foolish Things", Thomas Sowell says public schools are bad because:

They are not in a competitive market.

Refer to figure 2-4. At which point is this economy producing its maximum possible quantity of doors?

U

The supply curve goes:

Up

The study of how the allocation of resources affects economic well-being is called:

Welfare economics

Which is the correct order from largest to smallest of the three sources of tax revenue?

1. Income 2. Payroll 3. Corporate

Which is the correct order from largest to smallest of the three expenditures of the US federal government?

1. Medicare/Medicaid 2. Social Security 3. Defense/War

According to the US Debt Clock, the debt/GDP ratio is currently:

104.33%

Suppose the US and Mexico both produce semiconductors and auto parts and the US has a comparative advantage in semiconductors while Mexico has a comparative advantage in auto parts. If the US exports semiconductors to Mexico and imports auto parts from Mexico,

Both countries, as a whole, will be better off.

According to lecture, the circular flow model is the same as algebra and accounting because:

Both sides are equal

Economists generally support

Free international trade

What produces the quantity of goods that maximizes the sum of consumer and producer surplus?

Free markets.

According to lecture "The Wisdom of Crowds" supports the idea that groups make good decisions, which supports which of the Ten Principles of Economics?"

Markets are a good way to organize economic activity

Willingness to pay:

Measures the value that a buyer places on a good.

When a tax is placed on the sellers of a product, buyers pay:

More, and sellers receive less than they did before the tax.

"The government should raise the minimum wage." This is an example of what type of statement?

Normative

Two effects that cause the supply curve to shift:

Number of sellers decrease Input prices decrease

A market with a few competitors is called:

Oligopoly

The production possibilities frontier shows the ________ of making cars or computers for a country, or playing basketball or tennis for recreation, or studying or sleeping for students.

Opportunity Cost

Countries should decide what to make and not make, based on comparative advantage. To make that calculation, they analyze:

Opportunity cost

According to lecture, almost all economics graphs have three elements, from top left to bottom right:

PDQ