Econ Final
In the economy of Talikastan in 2015, consumption was $700, exports were $200, government purchases were $300, imports were $150, and investment was $400. What was Talikastan's GDP in 2015?
$1450
In game theory, the outcome or consequence of a strategy is referred to as the
Payoff
Which of the following is not a characteristic found in the prisoners' dilemma game?
Players cooperate in arriving at their strategies.
Which of the following items is counted as part of government purchases?
The city of Athens, Ohio pays $10,000 to a tree-trimming firm to trim trees along city boulevards.
Buddy is the owner of a firm that bottles beer in St. Louis, Missouri. There are many other such firms in the area. Buddy decides that if he pays his workers a wage higher than the going market wage, his profits will increase. Which of the following is a likely explanation for his decision?
The higher the wage, the less often his workers will choose to leave his firm.
After much consideration, you have chosen Ireland over Spain for your Study Abroad program next year. However, the deadline for your final decision is still months away and you may reverse this decision. Which of the following events would prompt you to reverse this decision?
The marginal benefit of going to Spain increases.
Which of the following is not an example of the opportunity cost of going to school?
The money a student spends on rent for his apartment while attending school.
A manufacturer produces 1 million televisions in the first quarter of the year. It sells 900,000 of them before the end of the first quarter, and holds the others in its warehouse. How will the 100,000 unsold televisions be treated in the GDP statistics?
The televisions will be counted as a change in inventory in the first quarter and so will be included in first-quarter GDP.
Which, if any, pairs of traders has a double coincidence of wants?
Tim with Amy
When a U.S. citizen buys $500 of Chinese-made parts for a motorcycle,
U.S. consumption increases by $500, U.S. net exports decline by $500, and U.S. GDP remains the same.
Which of the following is correct?
When real GDP falls, the rate of unemployment generally rises.
Treasury Bonds are
a store of value, but not a medium of exchange
When the Fed decreases the discount rate, banks will
borrow more from the Fed and lend more to the public. The money supply increases.
Changes in nominal GDP reflect
both changes in prices and changes in the amounts being produced.
A monopolist faces a
downward-sloping demand curve.
Macroeconomists study
economy-wide phenomena
For a certain firm, the 100th unit of output that the firm produces has a marginal revenue of $7 and a marginal cost of $10. It follows that the
firm's profit-maximizing level of output is less than 100 units.
Refer to Figure 23-1. Which of the following pairs correctly identify W and Y?
firms and households
Which of the following will not help to prevent bank runs?
fractional reserve banking
You use U.S. currency to pay the owner of a restaurant for a delicious meal. The currency
has no intrinsic value. The exchange is not an example of barter.
Which of the following pairs correctly identify X and Z?
markets for factors of production and markets for goods and services
Which of the following phrases best captures the notion of efficiency?
minimum waste
What is the Nash Equilibrium of this game?
{Down, Right}
In order to maximize profits, the monopolist should produce
12 units
Refer to Figure 3-20. Canada's opportunity cost of one unit of Good X is
2 units of Good Y and Mexico's opportunity cost of one unit of Good X is 1/2 unit of Good Y.
Refer to Table 23-10. In which year was this country's real GDP highest?
2016
Refer to Table 23-10. In which year was this country's nominal GDP highest?
2017
Marginal revenue equals marginal cost when the firm produces
5 units
Which of the following correctly identifies the flow of dollars?
A, L, N and B
A profit-maximizing firm in a competitive market is currently producing 200 units of output. It has average revenue of $9 and average total cost of $7. It follows that the firm's
All above are correct
The Mansfield Public Library has a large number of books that anyone with a library card may borrow. Anyone can obtain a card for free. Because the number of copies of each book is limited, not everyone can have the same book at the same time. What type of good would the library books be classified as in this case?
Common resources
Both Dave and Caroline produce sweaters and socks. If Dave's opportunity cost of 1 sweater is 3 socks and Caroline's opportunity cost of 1 sweater is 5 socks, then
Dave has a comparative advantage in the production of sweaters.
Pete is a non-union employee at The Electric Co. The majority of the employees at The Electric Co. are unionized. The union at The Electric Co. has negotiated very good benefits. Even though he is not a union member and he does not have to pay union dues, Pete receives all the benefits that the union has negotiated. Pete's behavior is an example of
Free riding
The term economists use to describe a situation in which the economy's overall price level is rising is
Inflation
A sidewalk runs across Jermichael's front yard near the street. By law, anyone has the right to use the sidewalk. When Jermichael shovels the sidewalk after a heavy snowstorm,
he is providing a good that is not rival and not excludable.
If an economy's GDP rises, then it must be the case that the economy's
income and expenditure both rise.
For an economy as a whole,
income must equal expenditure
Efficiency wages
increase productivity but increase unemployment.
Over the last few decades, Americans have chosen to cook less at home and eat more at restaurants. This change in behavior, by itself, has
increased measured GDP by the value added by the restaurant's preparation and serving of the meals.
Adverse selection arises because
insurance buyers have more information than insurance sellers.
When the Fed conducts open-market sales,
it sells Treasury securities, which decreases the money supply.
Adverse selection in competitive insurance markets pushes which group out of the market?
low risk individuals.
If the prices of all goods and services produced in the economy rose while the quantity of all goods and services stayed the same, which would rise?
nominal GDP but not real GDP.
A television broadcast is an example of a good that is
not rival in consumption.
Which of the following transactions is not included in GDP?
oranges sold by a farmer to a grocery store.
When economists talk about growth in the economy, they measure that growth as the
percentage change in real GDP from one period to another.
A tornado siren is a
public good
In a simple circular-flow diagram, firms
rent resources from households.
One way the "lemons problem" in the used-car industry can be mitigated is by
requiring sellers to guarantee trouble-free cars.
Since restored historic buildings convey a positive externality, local governments may choose to
restrict the demolition of them. provide tax breaks to owners who restore them.
Cyclical unemployment is closely associated with
short-run ups and downs of the economy.
You saved $500 in currency in your piggy bank to purchase a new laptop. The $500 you kept in your piggy bank illustrates money's function as a _______. The laptop's price is posted as $500. The $500 price illustrates money's function as a _____. You use the $500 to purchase the laptop. This transaction illustrates money's function as a ______.
store of value, unit of account, medium of exchange
The CPI is more commonly used as a gauge of inflation than the GDP deflator is because
the CPI better reflects the goods and services bought by consumers.
If a bank has a reserve ratio of 8 percent, then
the bank keeps 8 percent of its deposits as reserves and loans out the rest.
Which of the following topics are more likely to be studied by a macroeconomist than by a microeconomist?
the percentage of the labor force that is out of work, and differences in average income from country to country
The term crowding-out effect refers to
the reduction in aggregate demand that results when a fiscal expansion causes the interest rate to increase.