eco final
What is social insurance?
It is government-provided financial funding to households to compensate for bad outcomes such as unemployment, illness, disability, or outliving their savings.
What is quantity supplied?
It is the amount of an item that a seller is willing to sell at a particular price.
What is the difference between microeconomics and macroeconomics?
Microeconomics is the study of individual decisions in specific markets, whereas macroeconomics is the study of the economy as a whole.
How is monetary policy different from fiscal policy?
Monetary policy adjusts interest rates, whereas fiscal policy adjusts government spending and taxes.
When faced with a quantity decision, the economic surplus is always maximized by following the
Rational Rule.
Which of the following is a social insurance program in the United States?
Social Security
What happens to the equilibrium price and quantity when demand increases and simultaneously supply decreases, and the relative size of the shifts is not known?
The equilibrium price rises, and the change in the equilibrium quantity is ambiguous.
Which principle tells you that the true cost of something is the next best alternative you have to give up to get it?
The opportunity cost principle.
The aggregate production function is represented as:
Y = f(L, H, K).
Deposit insurance is:
a guarantee that you will get your money back, even if the bank collapses.
A production function is:
a method through which inputs can be turned into outputs, given the available resources.
When quantity demanded exceeds quantity supplied, _____ exists.
a shortage
In a market graph, consumer surplus is the area:
above the price and below the demand curve.
On a market graph, producer surplus is the area that is:
above the supply curve and below the price.
The working age population includes people who are:
age 16 or older who are not in the military or institutionalized.
A trade cost is:
an extra cost incurred as a result of buying or selling a good abroad rather than domestically.
(Figure: Graph) Refer to the graph to answer the question. In the graph, the movement from point M to point Q represents
an increase in demand.
Refer to the graph to answer the question.
an increase in quantity demanded.
Market failure occurs when market forces lead to:
an inefficient outcome.
Sunk costs are costs that
are incurred in the past and cannot be reversed.
The consumer price index is an index that tracks the:
average price that consumers pay over time for a representative basket of goods and services.
The cost-benefit principle states that a decision should be pursued only if the
benefits are greater than the costs.
Specialization will increase output when it is based on:
comparative advantage.
The "market value" of a good or service refers to the:
current dollar value of that good or service.
Frictional unemployment is unemployment:
due to the time it takes for employers to search for workers and for workers to search for jobs.
Dissaving is:
excess consumption over and above income.
Positive analysis is based on identifying _____ and _____.
facts; relationships
The concept of equity focuses on:
fairness.
A "final" good or service is one that is:
finished and ready for the final user.
To maximize production, people should
focus on the task in which they have a comparative advantage.
The principle that your best choice depends on your other choices, the choices others make, developments in other markets, and expectations about the future is known as the _____ principle.
interdependence
Enforceable property rights encourage economic growth by encouraging:
investment.
Discretionary spending is spending that:
is appropriated by Congress annually.
Diminishing marginal benefit:
is when buying an additional item yields a smaller marginal benefit than the previous item.
Which of the following is an argument for limiting international trade? An increase in international trade may:
lead to anticompetitive practices, such as dumping.
Shifts in demand
lead to price and quantity to move in the same direction.
Menu costs are the:
marginal costs of adjusting prices.
The __________ suggests, decisions about quantities are best made incrementally.
marginal principle
GDP is defined as the:
market value of all final goods and services produced within a country in a given year.
Holding all else constant, if people eat out more at expensive restaurants when they earn more, then expensive restaurant meals are
normal goods.
The labor force participation rate is the:
percentage of the working age population that is either employed or unemployed.
A stock's price to earnings ratio is calculated as:
price per share divided by earnings per share.
The Producer Price Index is an index that tracks the:
price that businesses pay over time for the inputs used in the production process.
Forward guidance occurs when the Federal Reserve:
provides information about current monetary policy in order to influence expectations about future interest rates.
An import is a good or service:
purchased from a foreign seller.
An excise tax is a tax on:
purchases that is typically a percentage of the purchase price of goods and services.
An equilibrium price is a price where the
quantity supplied equals the quantity demanded.
A market is a
setting that brings together potential buyers and sellers.
An export is a good or service:
sold to a foreign buyer
Tax expenditures are:
special deductions, credits, or exemptions that lower your tax obligations.
Which of the following is a source of comparative advantage?
specialized skills
The three major pillars of the financial sector are the:
stock market, the bond market, and the banks.
A government can promote the development of human capital by:
subsidizing secondary school education.
Due to a decline in demand and popularity, Ford Motor Company is planning to phase out traditional sedans such as 'Fusion' and 'Taurus' to focus on SUVs and trucks. Ford's sedans and trucks/SUVs are
substitutes-in-production.
Mandatory spending is spending that:
supports programs that do not get determined annually but instead are set in law.
When a manager uses comparative advantage to assign tasks in a workplace, then each
task is assigned to the worker with the lowest opportunity cost for performing the task.
A tariff is a:
tax on imported products.
The marginal propensity to consume is:
the change in consumption divided by the change in income.
Intergenerational mobility is the extent to which:
the economic status of children is independent of the economic status of their parents.
A market's deadweight loss is calculated as:
the economic surplus at the efficient quantity minus the economic surplus at the actual quantity.
The law of demand refers to
the inverse relationship between price and quantity demanded.
What is a reserve requirement?
the minimum amount of reserves that each bank must hold
The law of supply refers to
the positive relationship between price and quantity supplied.
Fiscal policy works best when it is:
timely, targeted, and temporary.
What is the Federal Reserve's mandate?
to ensure maximum employment while maintaining stable prices
The law of diminishing returns states that:
when one input is held constant, while other inputs are increased, eventually output will increase by smaller and smaller amounts.
Human capital refers to:
worker skills and knowledge.
An underemployed person is one who is:
working but whose skills are not fully utilized.