Econ 1-15, 17 kill me

Between 1930 and 1933, the prices received by farmers tended to: A) fluctuate up and down about equally. B) decrease. C) remain constant. D) increase.

b. decrease.

The relationship between the price of a good and the quantity people are willing and able to purchase is: A) supply. B) demand. C) equilibrium. D) disequilibrium.

b. demand

The principle stating that, for virtually all goods and services, there is a negative relationship between price and quantity demanded, all other things unchanged, is the law of: A) supply. B) demand. C) scarcity. D) increasing opportunity costs.

b. demand.

The process through which an economy's production possibilities curve is shifted outward is: A) comparative advantage. B) economic growth. C) full employment. D) specialization.

b. economic growth.

Resources from nature that can be used to produce other goods and services are called: A) money B) natural resources. C) labor. D) capital.

b. natural resources.

A price that the government guarantees farmers will receive for a particular crop is a(n): A) price ceiling. B) price support. C) deficiency price. D) export price.

b. price support

6. (Exhibit: Employment Data for an Economy) Calculate the unemployment rate in the economy. A) 7.01% B) 5.16% C) 4.90% D) 7.53%

A) 7.01%

3. (Exhibit: Price and Output Data for an Economy) Assume that 1994 is the base period. In _____, nominal GDP increased over the previous year due to an increase in output and not due to a change in prices. A) 1996 B) 1999 C) 1998 D) 1995 and 1999

A) 1996

2. What does the phrase "jobless recovery" refer to? A) It refers to a situation where an economy is moving out of a recession without a significant increase in employment. B) It refers to a situation in which rising productivity has made it possible for firms to reduce their workforce and increase output at the same time. C) It refers to the phenomenon where U.S. firms move their production abroad, thereby destroying jobs in the domestic market and creating new jobs in foreign markets. D) It refers to a situation in which a worker's real wage falls despite increases in Productivity.

A) It refers to a situation where an economy is moving out of a recession without a significant increase in employment.

16. Which of the following individuals would NOT be included in the labor force? A) Kit, who has retired and is not looking for work B) Divy, who has been temporary laid off from General Motors C) Soraya, a recent college graduate, who does not have a job, but has applied for several in the last week D) Giles, a physician who chooses to work part-time

A) Kit, who has retired and is not looking for work

14. The purchases of U.S. products by the citizens of Mexico are: A) counted as U.S. exports. B) counted as U.S. imports. C) considered Mexico's exports. D) considered as an income transfer from the U.S. to Mexico.

A) counted as U.S. exports.

15. To measure the "core" inflation rate, the Bureau of Economic Analysis uses a price measure that: A) excludes food and energy prices because the prices of these items can be volatile. B) includes food and energy prices because these items account for a significant portion of the typical consumer's expenditures. C) excludes non-durable goods and services since their consumption value decreases over time. D) excludes prices for most components of personal consumption expenditures.

A) excludes food and energy prices because the prices of these items can be volatile.

3. (Exhibit: Circular Flow Model) The exhibit shows a simplified circular flow model where only consumption goods are being produced. The arrow marked "C" represents the flow of: A) factors of production. B) factor incomes. C) personal consumption expenditures. D) consumer goods and services.

A) factors of production.

1. (Exhibit: Circular Flow Model) The exhibit shows a simplified circular flow model where only consumption goods are being produced. The arrow marked "A" represents the flow of: A) personal consumption expenditures. B) consumer goods and services. C) factors of production. D) factor incomes.

A) personal consumption expenditures.

7. The value of goods and services purchased by households during a particular period is called: A) personal consumption. B) private investment. C) gross domestic purchases. D) net imports.

A) personal consumption.

14. The consumer price index (CPI) reflects: A) the changes in the prices of goods and services typically purchased by consumers. B) the average level of prices for intermediate goods and services purchased by firms. C) the median annual expenditures of a typical single family of four on consumer goods. D) the average price of all goods and services computed from the ratio of nominal GDP to real GDP.

A) the changes in the prices of goods and services typically purchased by consumers.

12. Government purchases are defined as: A) the sum of purchases of goods and services from firms by government agencies and the total value of output produced by government agencies. B) the sum of purchases of goods and services from firms by the government and the value of transfer payments made to government to its citizens. C) the sum of purchase of final goods and service from firms by government agencies and the payment of interests on loans undertaken by the government. D) the purchase of final goods and service from firms by government agencies excluding the value of output produced by government agencies.

A) the sum of purchases of goods and services from firms by government agencies and the total value of output produced by government agencies.

7. (Exhibit: Employment Data for an Economy) Now suppose 4,000 of the people looking for work get discouraged and give up their job searches. The unemployment rate becomes _____. A) 6.35% B) 5.97% C) 5.91% D) 2.92%

B) 5.97%

5. (Exhibit: Nominal and Real Income) What has happened to an assistant professor's salary between 1967 and 1997? A) Although the nominal salary increased 4-fold in the 30-year period, real salary increased by only 3.2 times. B) The purchasing power of an assistant professor's salary has fallen by about 4.76%. C) The purchasing power of an assistant professor's salary has increased by about 5.24%. D) The real salary in 1997 is slightly higher than that in 1967.

B) The purchasing power of an assistant professor's salary has fallen by about 4.76%.

10. Goods that are produced in a particular period but not sold in the current period: A) are included in consumption estimates. B) are called inventories and are included in gross private investment. C) are excluded from the current year's GDP and included in GDP in the year they are sold. D) are classified as intermediate goods.

B) are called inventories and are included in gross private investment.

4. (Exhibit: Circular Flow Model) The exhibit shows a simplified circular flow model where only consumption goods are being produced. The arrow marked "D" represents the flow of: A) factors of production. B) factor incomes. C) personal consumption expenditures. D) consumer goods and services.

B) factor incomes.

15. GDP can be calculated by totaling either the: A) market values of all final goods and services or the total volume of all intermediate goods at all stages of production. B) market values of all final goods and services or the value added at all stages of production. C) total sales values of all intermediate goods at all stages of production or the value added at all stages of production. D) market values of all final goods and services or the values added by labor at all stages of production.

B) market values of all final goods and services or the value added at all stages of production.

13. Transfer payments are: A) payments made to certain individuals and are part of GDP. B) not included in GDP because they do not represent income derived from current production. C) included in GDP only if they pertain to unemployment benefits. D) payments for services produced in the current time period.

B) not included in GDP because they do not represent income derived from current production.

16. Double counting in GDP accounting: A) refers to the fact that accountants check their figures twice. B) refers to the inclusion of both intermediate goods and final goods in GDP. C) is the method of using both income and expenditures in measuring GDP. D) is the method of calculating the GDP by including the net incomes received by residents of a nation living abroad.

B) refers to the inclusion of both intermediate goods and final goods in GDP.

11. Over time, _____ has/have been the general trend for most economies. A) constant real GDP B) rising real GDP C) falling real GDP and a rising price level D) constant nominal GDP and a falling price level

B) rising real GDP

20. The total labor force comprises: A) all individuals who are employed. B) those who are employed plus those who are unemployed. C) the population of a nation, aged 16 years and above. D) all individuals who are working and those who are not working

B) those who are employed plus those who are unemployed.

12. To identify the onset of a recession, the National Bureau of Economic Research (NBER) Business Cycle Dating Committee: A) uses data on nominal GDP for two consecutive quarters. B) uses a range of indicators including real GDP, employment and income. C) identifies declining economic activity solely based on a fall in real GDP. D) uses a procedure that determines the dates of peaks and troughs mainly on the basis of employment.

B) uses a range of indicators including real GDP, employment and income.

19. An unemployed person is: A) one who is eligible to work but chooses not to work. B) one who is physically disabled and is unable to work. C) a person without a job who is actively seeking and available for work. D) a person who is looking for a job that better suits his qualifications than his current job.

C) a person without a job who is actively seeking and available for work.

11. Private investment plays a crucial role in the macroeconomy because it is: A) the largest expenditure component of GDP. B) the smallest expenditure component of GDP. C) an expenditure that adds to the economy's productive capacity. D) undertaken by the government and must be funded by tax revenue.

C) an expenditure that adds to the economy's productive capacity.

6. The value of an economy's total output of goods and services is called _____. A) consumption B) investment C) gross domestic product D) exports

C) gross domestic product

5. (Exhibit: Components of GDP for an Economy 2) Net exports are negative. This would mean that: A) imports are larger than exports and there is a trade surplus. B) exports are larger than imports and there is a trade surplus. C) imports are larger than exports and there is a trade deficit. D) exports are larger than imports and there is a trade deficit.

C) imports are larger than exports and there is a trade deficit.

17. The natural rate of unemployment: A) reduces during recessions. B) is the same as cyclical unemployment. C) includes frictional and structural unemployment. D) is the level where the quantity of labor demanded is more than the quantity of labor supplied.

C) includes frictional and structural unemployment.

10. The total value of all final goods and services produced in a country during a given period, adjusted to eliminate the effects of changes in prices is called: A) nominal GDP. B) current GDP. C) real GDP. D) average GDP.

C) real GDP.

8. What is the difference between a nominal value and a real value? A) A nominal value is measured in monetary units adjusted for inflation, unlike a real value. B) A nominal value is measured in market rates while a real value is measured in terms of exchange rates. C) A nominal value is measured in units of constant purchasing power while a real value is measured in units of current purchasing power. D) A nominal value is measured in current market prices while a real value is measured in base year prices.

D) A nominal value is measured in current market prices while a real value is measured in base year prices.

9. Which of the following items would NOT be a part of private investment in the computation of GDP? A) A new factory building B) New factory equipment C) A rise in inventory levels at a firm D) An old shopping center acquired by a firm

D) An old shopping center acquired by a firm

13. Which of the following statements is true of inflation? A) It refers to a decrease in the general price level in an economy. B) It refers to a rise in the price level of gasoline. C) It refers to a constant general price level in an economy. D) It refers to an increase in the average level of prices.

D) It refers to an increase in the average level of prices.

4. (Exhibit: Consumer Price Index for a City) The base year is 2002. Which of the following statements is true? A) The rate of inflation was highest in 2005 as compared to 2004 prices. B) Inflation in 2005 compared to 2004 prices was more than that in 2002 compared to 2001 prices. C) The deflation rate was 5% in the year 2005. D) The inflation rate fell between 2004 and 2005.

D) The inflation rate fell between 2004 and 2005.

Improvements in technology provide benefits to: A) consumers, through lower prices. B) workers, although some jobs may be eliminated. C) firms, through lower production costs. D) all of the above.

D) all of the above.

1. (Exhibit: Real GDP Over Time) The trough of the business cycle occurs: A) between t1 and t2. B) at t1. C) between t2 and t3. D) at t2.

D) at t2.

2. (Exhibit: Circular Flow Model) The exhibit shows a simplified circular flow model where only consumption goods are being produced. The arrow marked "B" represents the flow of: A) factors of production. B) factor incomes. C) personal consumption expenditures. D) consumer goods and services.

D) consumer goods and services.

9. The value, at current market prices, of the final goods and services produced during a particular period is: A) net national product. B) gross foreign factor output. C) gross personal product. D) gross domestic product.

D) gross domestic product.

8. For computing GDP, the official measure of the value of all goods produced during a period for use in the production of other goods is called: A) personal investment expenditure. B) a capital consumption allowance. C) a transfer payment. D) gross private domestic investment.

D) gross private domestic investment.

18. Unemployment that results from a mismatch between worker qualifications and the characteristics employers require is called _____ unemployment. A) cyclical B) frictional C) natural D) structural

D) structural

During the Great Depression: A) By 1933, 25 percent of the nation's workers had lost their jobs. B) output reached its lowest level in 1929. C) the production possibilities curve shifted sharply inward, which explains the drop in output, jobs, and overall prosperity. D) firms increased output but used fewer workers.

a. By 1933, 25 percent of the nation's workers had lost their jobs.

In the 1960s the dominant maker of mainframe computers was: A) IBM. B) Apple Computer. C) Compaq. D) GM.

a. IBM.

During the Great Depression: A) agriculture was hit particularly hard. B) prices received by farmers rose by nearly 2/3 between 1930 and 1933. C) farm legislation in the 1930s sought to reduce the number of farms and farm income. D) all of the above are true.

a. agriculture was hit particularly hard.

For a factor of production to be called capital it must: A) be produced. B) occur in the natural environment. C) be a part of human skill. D) be a result of a stock issue.

a. be produced.

The three broad types of factors of production are: A) capital, labor, and natural resources. B) money, profit, and interest. C) stocks, bonds, and financial assets. D) technology, human capital, and comparative advantage.

a. capital, labor, and natural resources.

A negative relationship between the quantity demanded and price is called the law of ______. A) demand B) diminishing marginal returns C) market clearing D) supply

a. demand

Technology is: A) knowledge that can be applied to the production of goods and services. B) generally unlimited in modern economies. C) a graphical illustration of the alternative combinations of goods and services an economy can produce. D) the resources the economy has available to produce goods and services.

a. knowledge that can be applied to the production of goods and services.

Making choices that are expected to achieve the highest possible value for some objective is termed: A) maximizing. B) minimizing. C) sanitizing. D) satisfying.

a. maximizing.

A simplified representation of a particular problem is A) model. B) constant. C) hypothesis. D) law.

a. model.

Scarcity in economics means: A) not having sufficient resources to produce all the goods and services we want. B) the wants of people are limited. C) there must be poor people in rich countries. D) economists are clearly not doing their jobs.

a. not having sufficient resources to produce all the goods and services we want.

The key signals that send messages to buyers and sellers to buy or not to buy or to sell or not to sell are, all other things unchanged: A) prices. B) preferences. C) government mandates. D) expectations.

a. prices.

A hypothesis is an assertion that can be: A) proven to be false. B) proven to be true. C) proven to be true or false. D) tested only in the normative sense.

a. proven to be false.

Economics is a: A) social science that deals with making choices among alternatives. B) natural science that concerns itself with allocating relatively scarce resources among alternative ends. C) science that has no theories or models based on the scientific method. D) humanities course that mainly concerns itself with limited wants versus unlimited resources.

a. social science that deals with making choices among alternatives.

Most firms in the United States today are: A) sole proprietorships and partnerships. B) owned by government. C) corporations. D) owned by shareholders.

a. sole proprietorships and partnerships.

When economists study the behavior of sellers, they are studying: A) supply. B) the role of government. C) demand. D) accounting.

a. supply.

The slope and location of the demand curve depend on: A) the number of buyers. B) production costs. C) the number of producers. D) all of the above.

a. the number of buyers.

Factors of production are: A) the resources the economy has available to produce goods and services. B) generally unlimited in modern economies. C) always employed in modern economies. D) the knowledge that can be applied to the production of goods and services.

a. the resources the economy has available to produce goods and services.

Human capital is: A) the set of acquired skills and abilities that workers bring to the production of goods and services. B) the financial wealth the economy has available to produce goods and services. C) the ability to produce one of two goods at relatively lower cost. D) a factor of production only if it occurs naturally.

a. the set of acquired skills and abilities that workers bring to the production of goods and services.

Anything whose value can change is a: A) variable. B) constant. C) hypothesis. D) all of the above.

a. variable.

The fundamental economic questions that every economic system must answer are: A) what, how, and for whom. B) what, why, and for whom. C) when, why, and for whom. D) how, when, and how much.

a. what, how, and for whom.

The primary emphasis in macroeconomics is on: A) how firms set prices. B) aggregates in the economy. C) marginal analysis and normative economics. D) international trade and environmental economics.

b. aggregates in the economy.

Positive statements: A) imply value judgments must be made. B) are factual and can be tested. C) deal with what ought to be. D) are dealt with primarily in microeconomics

b. are factual and can be tested.

Something whose value does not change is a: A) variable.B) constant. C) hypothesis. D) all of the above.

b. constant.

In the personal computer industry, the reason for the fall in prices and the increase in quantity after 1980 was: A) mainly a function of resource prices. B) primarily due to technological change and an increase in the number of sellers. C) a result of a dramatic decrease in U.S. wages. D) a result of a dramatic decrease in foreign wages.

b. primarily due to technological change and an increase in the number of sellers.

How a supply curve is sloped and located is affected by: A) consumer preferences. B) resource prices. C) the number of consumers. D) all of the above.

b. resource prices.

According to the textbook, much of the discussion about the health-care "problem" in the United States has focused on: A) the inability of doctors to provide adequate health-care services. B) rising spending for health care. C) the shortage of adequate space in hospitals. D) the surplus of nurses.

b. rising spending for health care.

A curve that shows the relationship between the price and quantity supplied during a particular period, all other things unchanged, is the: A) price curve. B) supply curve. C) quantity function. D) production possibilities curve

b. supply curve.

In 1960, the percentage of total output the United States devoted to health care was about ________ percent. A) 2 B) 5 C) 10 D) 13

b.5

An arrangement in which consumers choose their health-care services while other institutions pay a share of the cost of those services is called a(n) ________ payer system. A) provider fees B) insurance premiums C) third-party D) catastrophic insurance

c.third-party

Which of the following would lead to an increase in the demand for health care? A) Physicians' productivity increases. B) Medicare subsidies are lowered. C) The average population age increases. D) Subsidies for Medicare are reduced.

c. The average population age increases.

If a demand curve shifts to the left, then: A) the equilibrium price would go up and the equilibrium quantity would go down. B) the equilibrium price would go down and the equilibrium quantity would go up. C) a lower equilibrium price and quantity would result. D) a higher equilibrium price and quantity would result.

c. a lower equilibrium price and quantity would result.

Ceteris paribus means: A) allowing all other things to change. B) making value judgments.C) all other things unchanged. D) differentiating between macroeconomics and microeconomics.

c. all other things unchanged.

The law of increasing opportunity cost says that: A) opportunity costs of production always tend to increase. B) increases in wages cause increases in the opportunity costs of production. C) as output increases for one good on its production possibilities curve, the opportunity cost of additional units of the other good will be greater and greater. D) along a production possibilities curve, as output increases in the production of one good, the opportunity costs of additional units of the other good will be less and less.

c. as output increases for one good on its production possibilities curve, the opportunity cost of additional units of the other good will be greater and greater.

A choice made _______ is a choice whether to do a little more or a little less of something. A) at the front end B) in the beginning C) at the margin D) all of the above.

c. at the margin

The bulk of the nation's output is produced by: A) partnerships. B) proprietorships. C) corporations. D) none of the above.

c. corporations.

A person who seeks to earn profits by finding ways to organize factors of production is called a(n): A) foreman B) finance capitalist. C) entrepreneur. D) manager.

c. entrepreneur.

The set of acquired skills and abilities that workers bring to the production of goods and services is: A) money. B) wealth. C) human capital. D) natural ability.

c. human capital.

A theory that has won virtually universal acceptance is a: A) model. B) hypothesis. C) law. D) variable.

c. law.

Health care is a(n): A) abnormal good. B) superior good. C) normal good. D) good where higher incomes lead to less spending.

c. normal good.

A key theme fundamental to all of economics is: A) there are limited wants. B) we are a rich country but are simply not aware of it. C) people have unlimited wants facing limited means to satisfy them. D) there are unlimited resources.

c. people have unlimited wants facing limited means to satisfy them.

A minimum price set above the equilibrium price is a: A) demand price. B) supply price. C) price floor. D) price ceiling.

c. price floor.

A firm owned by one individual is called a: A) corporation. B) partnership. C) sole proprietorship. D) none of the above.

c. sole proprietorship.

The basic concern of economics is to: A) keep business firms from losing money. B) prove that capitalism is better than socialism. C) study the choices people make. D) use unlimited resources to produce goods and services to satisfy limited wants.

c. study the choices people make.

A supply curve that is upward sloping means that: A) demand is being ignored. B) consumers will buy less at lower prices. C) suppliers will want to sell more at higher prices. D) suppliers will want to sell less at higher prices.

c. suppliers will want to sell more at higher prices.

Knowledge that can be applied to the production of goods and services is: A) natural resources. B) specialization. C) technology. D) comparative advantage.

c. technology.

In the market for health care: A) there has been no effect of the presence of third-party payers. B) the effect of third-party payers decreases the price that consumers pay. C) providers are encouraged to supply a greater quantity than they would without third-party payers. D) B and C are true.

d. B and C are true.

In enforcing the legal system, the government in a market capitalist economy acts to: A) enforce contracts. B) enforce property rights. C) discourage fraud. D) do all of the above.

d. do all of the above.

The branch of economics that examines the choices of consumers and firms is: A) positive economics. B) normative economics. C) macroeconomics. D) microeconomics.

d. microeconomics.

Statements that make value judgments are: A) pecuniary. B) positive. C) nominal. D) normative.

d. normative.

A maximum price set below the equilibrium price is a: A) demand price. B) supply price. C) price floor. D) price ceiling.

d. price ceiling.

In the textbook, the prices of the factors of production, returns from alternative activities, technology, seller expectations regarding future prices, and the number of sellers are called: A) demand shifters. B) supply prices. C) market realities. D) supply shifters.

d. supply shifters.

Reaching the incorrect conclusion that one event causes another because the events tend to occur together is called: A) the scientific method. B) the economic way of thinking. C) making choices at the margin.D) the fallacy of false cause.

d. the fallacy of false cause.

Opportunity cost is: A) zero for the use of a free combo meal offer. B) the dollar payment for a product. C) the benefit derived from a product. D) the value of the best alternative forgone in making any choice.

d. the value of the best alternative forgone in making any choice.

A hypothesis that has been tested extensively without being rejected and has won widespread acceptance is a: A) model. B) constant. C) variable. D) theory.

d. theory.

In 2015, the percentage of total output the United States devoted to health care was about ________ percent. A) 2 B) 6 C) 10 D) 18

d.18

The factors of production are: A) money, labor, natural resources, and capital. B) technology, human capital, and natural resources. C) money, capital, and natural resources. D) labor, capital, and natural resources.

labor, capital, and natural resources.

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