Econ Test #1

As price rises, the quantity supplied...?

rises

As quantity demanded falls, price...

rises

As quantity supplied rises, price...?

rises

As price falls, quantity demanded _____

rises (People wish to buy more of the good as it becomes cheaper)

quantity demanded

the amount of a good that buyers are willing and able to purchase at various prices.

A increase in consumer surplus would do what to price?

the area underneath the demand curve and above price.

Standard of living

the average level of consumption of goods/services enjoyed by the population.

With an decrease in the supply curve the graph would shift the supply line

to the left (horizontally)

With an increase in the demand curve the graph would shift the demand line

to the left (horizontally)

With an decrease in the demand curve the graph would shift the demand line

to the right (horizontally)

With an increase in the supply curve the graph would shift the supply line

to the right (horizontally)

Bringing supply and demand together creates our...?

(free) market and free market system

Which out of these factors DOES NOT shift the supply curve? 1. Price of good/service/product itself. 2. Price of inputs used in production. 3. Producer expectations. 4. Change in technology of production. 5. Price of related commodities. 6. Government factors. 7. anything else

1 AND ONLY 1 1. Price of good/service/product itself.

Which out of these factors DOES NOT shift the demand curve 1. Price of the good or service itself. 2. Income of consumers. 3. Prices of related goods. 4. Expectations by customers. 5. Preferences/Taste of consumer.

1 AND ONLY 1 1. Price of the good or service itself.

Describe two reasons why the market is so important?

1. Because that is where the price of the good/service is determined. 2. Because that is where the quantity of the good/service is determined.

What are some factors considered important when discussing what affects how many/much they want to make/produce/sell.

1. Price of good/service/product itself. 2. Price of inputs used in production. 3. Producer expectations. 4. Change in technology of production. 5. Price of related commodities. 6. Government factors. 7. anything else

What are some factors considered important when discussing what buyers want. (what causes demand)

1. Price of the good or service itself. 2. Income of consumers. 3. Prices of related goods. 4. Expectations by customers. 5. Preference

Economists use welfare economics to examine:

1. Tax implications 2. Price controls (floors & ceilings) 3. Gains from trade and trade restrictions. 4. Any policy that effects the workings of the market.

At Equilibrium what four things happen

1. The market is at rest; there is no tendency for change.(no forces pushing P or Q higher or lower) 2. Sellers can sell as much as they want.(provided that they are willing to sell the good at P*) 3. Buyers can buy as much as they want. (provided that they are willing to pay price P*) 4. Quantity demanded(Qd) equals quantity supplied(Qs)(the exact amount buyers want is the exact amount sellers produce)

If annual real GDP per capita growth in Tanzania averages 0.8% per year, how long will it take the country to quadruple its real GDP per capita?

175 years.

If annual real GDP per capita growth in South Africa averages 1.8%, how long will it take the country to double its real GDP per capita?

38.89 years

If Ireland took 1515 years to double its real GDP per capita, what was its average annual GDP per capita growth rate during this period?

4.67%

If China took 4040 years to increase its real GDP per capita eightfold, what was its average economic growth during this period?

5.25%

GDP chain price index

A measure that compares changes in the prices of all final goods during a given year to the prices of those goods in a base year.

Which of these causes inflation? a) Slow growth in the quantity of money b) Unemployment c) The government printing too much money d) Short‑run spending increases

c) The government printing too much money

National Activity Index

A weighted average of 85 indicators of economic activity. Recession likely if index falls below -0.70.

Anna Graham is the new Treasury Secretary, and she is trying to interpret some inflation measures. In year one, the aggregate price level increased by 66% and in year two, the aggregate price level decreased by 33%. Which statement accurately characterizes the changes in the nation's price level? A) In year one, the economy is experiencing inflation. In year two, the economy is experiencing deflation. B) In year one, the economy is experiencing deflation. In year two, the economy is experiencing disinflation. C) In year one, the economy is experiencing deflation. In year two, the economy is experiencing inflation. D) In year one, the economy is experiencing inflation. In year two, the economy is also experiencing inflation.

A) In year one, the economy is experiencing inflation. In year two, the economy is experiencing deflation.

Why is increased technological knowledge for a nation important for growth? A) It allows the nation to be more productive in goods and services that it produces. B) Increased technological knowledge causes simultaneous increases in human capital and physical capital. C) Technological knowledge allows output to increase instantly. D) All of the above. E) None of the above.

A) It allows the nation to be more productive in goods and services that it produces.

What would likely happen if the amount of capital employed per worker grew? A) Wages would rise because workers would become more productive. B) Wages would be unchanged because wages are unaffected by the quantity of capital. C) Wages would fall because physical capital would replace human capital. D) Wages would fall because capital would be more important in production.

A) Wages would rise because workers would become more productive.

Anna Conda is currently on a hiking vacation in the Amazon jungle from her part‑time job as a herpetologist at the San Diego Zoo. A) employed B) unemployed C) out of the labor force

A) employed

Economic growth is important to understand because A) it is closely tied to standard of living. B) understanding economic growth is key to getting a banking job after graduation. C ) income equality cannot exist without growth. D) growth guarantees that the rich get richer and the poor get poorer.

A) it is closely tied to standard of living.

In what way(s) does GDP per capita not provide an accurate representation of living standards? a) GDP per capita does not account for changes in environmental quality. b) GDP per capita does not measure production that occurs outside of the market economy. c) GDP per capita does not account for how people distribute their time between work and leisure. d) GDP per capita does not account for all final goods and services sold in markets.

A,B,C

Area of a triangle

A= 1/2 (base)(height)

For each scenario, decide whether it creates a producer or a consumer surplus. Then, calculate the ensuing surplus. Alice is willing to spend $30 on a pair of jeans, and has a coupon for $10 off which she found online. She selects and purchases a pair of jeans which cost $35 pre-discount. Alice experiences a...? Alice's surplus= ?

Alice experiences a Consumer Surplus Alice's surplus= 5

Supply

All those willing and able to produce/sell/supply the good/service make up supply.

Producer Price Index (PPI)

An index that measures prices at the wholesale level.

Which of the statements is the best description of inflation? A) The price of all goods and services in the economy are increasing. B) An increase in the overall price level has occurred. C) The price of all goods and services have increased proportionately. D) Real GDP is rising. E) The prices of only consumer goods are increasing.

B) An increase in the overall price level has occurred.

Consider a typical demand curve for movie tickets. Which of the following would NOT shift demand for movie tickets, graphically? a) An increase/decrease in the price of cokes & popcorn b) An increase/decrease in the price of movie tickets c) An increase/decrease in the price of Netflix, Amazon Prime, Disney +, etc. d) Movie theaters around the country undergo major upgrades - better seating, better concessions, better sound, etc.

B) An increase/decrease in the price of movie tickets

For living standards to rise, what must occur? A) Nominal GDP must grow faster than the population. B) Output must grow faster than the population. C) The labor force must grow faster than the population. D) The capital stock must grow faster than the population.

B) Output must grow faster than the population.

Which term refers to a nation's transportation and communications networks, power generating facilities, educational institutions, and legal, economic, and financial systems? A) public sector B) infrastructure C) utilities D) capital stock

B) infrastructure

How frequently is the survey that determines unemployment released? A) quarterly B) monthly C) yearly D) weekly

B) monthly

Worker productivity is one of the most important factors that help determine the performance of an economy. Which definition best describes productivity? A) percentage change in output B) per capita GDP C) total output in one year D) total number of hours worked E) capital per worker

B) per capita GDP

If an economy experiences deflation, then A) the prices of all goods in the economy are decreasing. B) the aggregate price level is declining. C) the overall price level is increasing. D) the prices of consumer goods are decreasing while the prices of raw materials are increasing. E) the aggregate price level is rising, but not as quickly as it did in the previous year.

B) the aggregate price level is declining.

Bonnie Ann Clyde has not had any work at all for six months despite the fact that she has been filling out at least eight job applications each day. A) employed B) unemployed C) out of the labor force

B) unemployed

Brighton Early is a student. He has no job outside of the home but spends five hours each week mowing the lawn and maintaining his yard. He is happy with his situation and is not looking for more work. A) employed B) unemployed C) out of the labor force

B) unemployed

Anita Job is the new Treasury Secretary, and she is trying to interpret the inflation measures for two consecutive years. In year one, the aggregate price level increased by 6% and, in year two, the aggregate price level increased by 4%. Which term describes the change in the price level from year one to year two? A) deflation B) hyperinflation C) disinflation D) conflation

C) disinflation

Bill Loney does not have a job nor does he intend to look for one. A) employed B) unemployed C) out of the labor force

C) out of the labor force

Who reports the official U.S. unemployment rate? A) the U.S. Federal Reserve B) unemployment collection offices C) the U.S. Bureau of Labor Statistics D) the U.S. Treasury Department

C) the U.S. Bureau of Labor Statistics

Suppose the growth rate of the economy is 2%. The size of the economy roughly doubles every A) 5 years. B) 10 years. C) 50 years or more. D) 35 years. E) 20 years. If instead the growth rate is 7%, the doubling time for the economy is.. A) 5 years. B) 10 years. C) 50 years or more. D) 20 years. E) 35 years.

D) 35 years B) 10 years.

Which statement is not true? A) Establishing and protecting property rights are key elements that promote economic growth. B) Price signals distorted by extreme inflation or deflation lead to uncertainty and lower the ability of citizens to make good decisions. C) The legal enforcement of contracts promotes economic growth. D) Countries with relatively large public sector shares in the economy have the highest growth rates in GDP per capita.

D) Countries with relatively large public sector shares in the economy have the highest growth rates in GDP per capita.

What is the catch‑up effect concerning developed and developing countries? Developing countries A) Developing countries have lower productivity per unit of capital because they are better at developing new technology. B) have greater productivity per unit of capital because they are better at developing new technologies. C) never can catch up to developed countries. D) may grow faster than developed countries because they lack the most basic tools and capital investment leads to higher productivity growth.

D) may grow faster than developed countries because they lack the most basic tools and capital investment leads to higher productivity growth.

Economic growth is most accurately measured by changes in which variable? A) wages B) the capital stock C) nominal GDP D) real GDP

D) real GDP

How do economists refer to the amount of capital employed per worker? A) the human capital percentage B) the capital stock C) capital productivity D) the capital‑labor ratio

D) the capital‑labor ratio

What is the Misery Index? A) the unemployment rate B) the inflation rate C) the unemployment rate minus the inflation rate D) the unemployment rate plus the inflation rate

D) the unemployment rate plus the inflation rate

When market price rises consumer surplus______ and producer surplus_______

Decreases, Increases

Suppose that an economy consists of only two individuals. Leland has $1510 available to spend on goods. He decides to purchase $830 worth of produce from Juanita in the current month. No other economic activity takes place during the current month. Using this information, answer the questions. For the current month, what is the economy's income? For the current month, what is the economy's expenditure?

For the current month, what is the economy's income? =830 For the current month, what is the economy's expenditure? =830

Efficiency

How can we produce as much as possible given what we have to work with.

How do you calculate trade as a percentage of GDP

Imports+exports/ GDP

When market price falls consumer surplus______ and producer surplus_______

Increases, Decreases.

Jeff finds some steaks for $16 for which he would have been willing to pay $20. The butcher notices the meat is near the expiration date and gives him an extra 75 off. Jeff experiences a...? Jeff's surplus= ?

Jeff experiences a consumer surplus Jeff's surplus= $16

The Leading Economic Index

Measures 10 important leading indicators. Recession likely if index falls three months in a row.

Suppose that Michelle buys a cappuccino from Paul's Cafe and Bakery for $4.75. Michelle was willing to pay up to $7.75 for the cappuccino, and Paul's Cafe and Bakery was willing to accept $1.25for the cappuccino. Michelle's consumer surplus= ? Paul's Cafe and Bakery's producer surplus= ?

Michelle's consumer surplus= 3 Paul's Cafe and Bakery's producer surplus= 3.5

If the variables are already represented and labeled on the curve then it is classified as a

Movement

Which out of these factors CAN shift the demand curve 1. Price of the good or service itself. 2. Income of consumers. 3. Prices of related goods. 4. Expectations by customers. 5. Preferences/Taste of consumer.

NOT 1 2. Income of consumers. 3. Prices of related goods. 4. Expectations by customers. 5. Preferences/Taste of consumer.

Which out of these factors CAN shift the supply curve? 1. Price of good/service/product itself. 2. Price of inputs used in production. 3. Producer expectations. 4. Change in technology of production. 5. Price of related commodities. 6. Government factors. 7. anything else

NOT 1 2. Price of inputs used in production. 3. Producer expectations. 4. Change in technology of production. 5. Price of related commodities. 6. Government factors. 7. anything else

Nicole has a hockey puck from the 2018 Winter Olympic Games and puts it up for sale on eBay. She will only sell the puck if the winning bid is greater than or equal to $500. After bidding closes, the last bid stands at $501. Nicole experiences a...? Nicole's surplus:

Nicole experiences a producer surplus Nicole's surplus: $1

What is the difference between real and nominal gross domestic product (GDP)? a) Nominal GDP is another name of net domestic product, or NDP. b) Nominal GDP is measured in dollars, whereas real GDP is a comparison to all other nation's production. c) Nominal GDP for a given year is measured in dollars of that year, whereas real GDP is measured in dollars of some base year. d) There is no difference between real and nominal GDP. Real GDP measures the expenditure of a nation, whereas nominal GDP measures the income accounts that make up those expenditure measures. e) Nominal GDP is measured in dollars, whereas real GDP is measured in terms of some consumption commodity, such as tons of coal, available in the economy right now.

Nominal GDP for a given year is measured in dollars of that year, whereas real GDP is measured in dollars of some base year.

Consider the information about the economy of Pakistan. Note that the currency of Pakistan is the rupee. The government purchases: 2.90 trillions of rupees. Individuals consume: 12.00 trillions of rupees. Individuals save: 5.20 trillions of rupees. Businesses invest: 1.35 trillions of rupees. Foreigners spend: 0.57 trillions of rupees to purchase Pakistani firms. Pakistan imports: 2.17 trillions of rupees. Pakistan exports: 1.32 trillions of rupees. Calculate Pakistan's GDP. Assume that the values are all current and no conversions need to be made. Give your answer in terms of trillions of rupees, and round to two decimals.

Pakistan's GDP: 15.4 trillions of rupees

How are price and quantity supplied related?

Price and Quantity supplied are always going to be the same in terms of if one falls, so does the other. If one rises so does the other.

Law of demand

Price and quantity demanded are negatively related

Law of Supply

Price and quantity supplied are positively related.

The Yield Curve

Relationship between bond interest rates and dates of maturity. Recession likely if short term rates are higher than long term rates.

A typical supply curve is composed of [ Select ] ["buyers", "sellers"] and graphically it ["slopes upwards", "slopes downwards", "is horizontal", "is vertical"] .

Sellers/ slopes upwards

Scarcity

The condition in which there is not enough of something available if it were provided for free.

Scarcity

The condition in which wants are forever greater than the available supply of time, goods, or resources.

market equilibrium

The price where quantity demanded (by consumers) is equal to quantity supplied. (by producers)

Macroeconomics

The study of the economy as a whole, including topics such as inflation, unemployment, and economic growth

In an economy, how are income and expenditure related?

They are equal

Bottom line:

Things are scarce( time, money resources), so we need to do the best with what we have to work with.

Ceteris Paribus

a Latin phrase that means "all other things held constant"

Consumer Price Index (CPI)

a measure of the overall cost of the goods and services bought by a typical consumer

Consider a typical market for wine. A medical report was issued last year (true story) that found that any amount of drinking, even 1 glass per day, proved harmful to your health. If people pay attention to that report, what would the model of supply and demand predict will happen to P* and Q* of wine? a) A fall in both P* and Q* b) A fall in P* and a rise in Q* c) A rise in P* and a fall in Q* d) A rise in both P* and Q*

a) A fall in both P* and Q*

If the price of a kayak increases...? a) sellers offer more kayaks for sale. b) the supply of kayaks decreases. c) sellers offer fewer kayaks for sale. d) the supply of kayaks increases.

a) sellers offer more kayaks for sale.

Consider a typical market, and suppose the equilibrium price (P*) was $150. Suppose that currently, the market price was $130. Which group might be unhappy with this situation (in terms of getting what they want)? a) The buyers b) The sellers c) Both sides would be unhappy d) Neither side, both groups would be happy with the current price

a) the buyers

Real GDP per capita is NOT an adequate measure of...? a) the well-being of each person in an economy. b) a country's average aggregate output per person. c) average real GDP per person in the economy. d) a country's average aggregate spending per person.

a) the well-being of each person in an economy.

Consumer surplus is shown graphically as the area a) under the demand curve and above the market price. b) under the demand curve and below the market price. c) above the supply curve and below the market price. d) above the supply curve and above the market price.

a) under the demand curve and above the market price.

At equilibrium,Consumer Surplus would be represented as the area ______. a)DFH b)D c)JCG d)FDHJCBI e)DFHEA

a)DFH

When policy makers and the news reports that "the economy contracted", this means that during the last period ____. a)real GDP increased slower than the potential rate or decreased b)real GDP decreased c)nominal GDP decreased d)nominal GDP per person decreased e)inflation decreased

a)real GDP increased slower than the potential rate or decreased

Generally for a typical market, an increase in demand will cause the equilibrium price (P*) to ______ and equilibrium quantity (Q*) to ______. a)rise; rise b)rise; no effect c)No effect; rise d)fall; rise e)fall; fall

a)rise; rise

When referring to a graph, a decrease in demand means that a)the demand curve has shifted left. b)the demand curve has shifted right. c)there has been a movement down along the demand curve. d)there has been a movement up along the demand curve. e)Both a and c are correct.

a)the demand curve has shifted left.

When referring to a graph, an increase in supply means that a)the supply curve has shifted right. b)the supply curve has shifted left. c)there has been a movement down along the supply curve. d)there has been a movement up along the supply curve. e)Both b and d are correct.

a)the supply curve has shifted right.

Horizontal Summation

adding the number of units (Qd) of the product that will be purchased (or supplied) at each price (P)

demand

all those willing and able to buy the good/service make up the demand side of the market.

A shift in the supply curve can be caused by: a) a change in buyers' incomes. b) a change in one of the determinants of supply. c) a change in the price of a good. d) a shift in demand.

b) a change in one of the determinants of supply.

Producer surplus is the difference between? a) the maximum price a buyer is willing to pay and the market price. b) the market price and the minimum price a seller is willing to accept. c) the market price and the minimum price a buyer is willing to pay. d) the maximum price a seller is willing to accept and the market price.

b) the market price and the minimum price a seller is willing to accept.

What agency is in charge of calculating/reporting the U.S. GDP? a)National Bureau of Weights and Measures b)Bureau of Economic Analysis c)Bureau of Economic Statistics d)Bureau of Labor Statistics e)Ministry of Truth and Information

b)Bureau of Economic Analysis

Which measure of GDP attempts to adjusts for inflation? a)Nominal GDP b)Real GDP c)PPP GDP

b)Real GDP

Which country has the largest economy in the world (as measured by nominal GDPin 2019)? a)The UK b)The U.S. c)Germany d)China e)Japan

b)The U.S.

Which of the following typically happen as an economy experiences an economic contraction/slowdown? a)Workers are laid off; business sales increase; new businesses open; households spend more and save less b)Workers are laid off; business sales fall; some businesses close; households spend less and save more c)Workers are laid off; business sales increase; new businesses open; households spend more and save less d)More workers find jobs; business sales fall; new businesses open; households spend less and save more e)More workers find jobs; business sales increase; some businesses close; households spend more and save less

b)Workers are laid off; business sales fall; some businesses close; households spend less and save more

All of the following could cause an increase in demand EXCEPT a)an increase in consumer income b)a decrease in the price of the good c)a decrease in the price of a complement good d)an increase in the number of buyers in the market e)All of the above will cause an increase in demand.

b)a decrease in the price of the good

Producer Surplus can be measured as the area _______. a)below the supply curve and above the equilibrium price b)above the supply and below the equilibrium price c)below the demand curve and above the equilibrium price d)below the equilibrium price and above the demand curve e)below the demand curve and above the supply curve

b)above the supply and below the equilibrium price

Producer surplus is shown graphically as the area? a) under the demand curve and above the market price. b) under the demand curve and below the market price. c) above the supply curve and below the market price. d) above the supply curve and above the market price.

c) above the supply curve and below the market price.

Which of the statements is the best description of a business cycle? a) the time it takes a firm to convert raw materials into a final good or service b) a calendar year divided into four quarters, each containing three months c) alternating periods of increasing and decreasing economic output d) the relationship between the returns on Treasury securities and the time to maturity

c) alternating periods of increasing and decreasing economic output

Total Surplus can be measured as the area ______ a)Above the demand curve b)Below the demand curve and above the equilibrium price c)Below the demand curve and above the supply curve d)Above the supply curve and below the equilibrium price e)Above the horizontal axis and below the demand curve

c)Below the demand curve and above the supply curve

At equilibrium, Producer Surplus would be represented as the area ______. a)DFH b)DFHJCG c)JCG d)GJCFHE e)FHEAJCBI

c)JCG

Which of the following would cause a movement along the supply curve? a)a change in supplier price expectations b)a change in the technology of production c)a change in the price of the good itself d)a change in the number of sellers e)All of the above could cause a movement along the supply curve.

c)a change in the price of the good itself

Generally for a typical market, a decrease in supply will cause the equilibrium price (P*) to ____ and equilibrium quantity (Q*) to ______ a)rise; rise b)rise; no effect c)rise; fall d)fall; rise e)fall; fall

c)rise; fall

Gross domestic product (GDP) is a)the quantity of output produced within an economy in a given year. b)the value of all goods and services produced within an economy in a given year. c)the value of all final goods and services produced within an economy in a given year. d)the value of all final and intermediate goods and services produced within an economy in a given year. e)the number of final goods and services produced within an economy in a given year.

c)the value of all final goods and services produced within an economy in a given year.

Producer surplus

the amount a seller is paid for a good minus the seller's cost of providing it

total surplus

consumer surplus + producer surplus

For a good or service to be counted in a given year's gross domestic product (GDP), what four criteria must be met? a) have a market value, be a final good or service, be produced within a given country or in another country with whom they have established trade relations, and be produced within a certain time frame. b) have a market value, be a final good or service, be produced within a given country, and be produced independent of any set time frame. c) have a market value, be an intermediate or final good or service, be produced within a given country, and be produced within a certain time frame d) have a market value, be a final good or service, be produced within a given country, and be produced within a certain time frame

d) have a market value, be a final good or service, be produced within a given country, and be produced within a certain time frame.

The proposal that the price of an item is negatively related to the amount of the item that consumers wish to buy, ceteris paribus, is known as _________. a) quantity supplied b) the law of supply c) quantity demanded d) the law of demand

d) the law of demand

Consumer surplus is equal to the difference between a) the minimum price a seller is willing to accept and the market price. b) the minimum price a buyer is willing to pay and the market price. c) the maximum price a seller is willing to accept and the market price. d) the maximum price a buyer is willing to pay and the market price.

d) the maximum price a buyer is willing to pay and the market price.

When referring to a graph, an increase in quantity supplied means that a)the supply curve has shifted right. b)the supply curve has shifted left. c)there has been a movement down along the supply curve. d)there has been a movement up along the supply curve. e)Both b and d are correct.

d) there has been a movement up along the supply curve.

At equilibrium, Total Surplus would be represented as the area ________. a)DFHEA b)FHJC c)EABI d)DFHJCG e)DFHEAJCBIG

d)DFHJCG

Consumer Surplus can be measured as the area ______. a)below the demand curve b)above the supply curve c)below the demand curve and above the supply curve d)below the demand curve and above the equilibrium price e)above the supply curve and below the equilibrium price

d)below the demand curve and above the equilibrium price

Generally for a typical market, an increase in supply will cause the equilibrium price (P*) to____ and equilibrium quantity (Q*) to ______ a)rise; rise b)rise, no effect c)No effect; rise d)fall; rise e)fall, fall

d)fall; rise

In theory, the market is able to find an equilibrium P* and Q* that ______ a)maximizes consumer surplus b)maximizes producer surplus c)maximizes both consumer and producer surplus d)maximizes total surplus e)minimizes total surplus

d)maximizes total surplus

Which of the following shows the stages of the business cycle in correct order? a)expansion, contraction, trough, peak b)trough, contraction, expansion, peak c)expansion, trough, contraction, peak d)peak, contraction, trough, expansion e)contraction, peak, expansion, trough

d)peak, contraction, trough, expansion

Along a typical downward sloping demand curve, what IS NOT held constant? a)price of related goods b)number of buyers c)preferences/tastes d)price of the good itself e)income

d)price of the good itself

When policy makers and the news reports that "the economy is expanding", this means that during the last period ____. a)nominal GDP increased b)inflation increased c)real GDP increased d)real GDP increased at the potential rate or faster e)the stock market increased in value

d)real GDP increased at the potential rate or faster

In theory, when a market reaches its equilibrium then _____ a)consumer surplus has been maximized b)producer surplus has been maximized c)producer surplus has been minimized d)the total of both consumer and producer surplus has been maximized e)the total of both consumer and producer surplus has been minimized

d)the total of both consumer and producer surplus has been maximized.

A increase in consumer surplus would do what to price?

decrease

A increase in price would do what to consumer surplus?

decrease

What was the approximate size of the U.S. economy in 2019, as measured by constant GDP? a)$200 million b)$18 billion c)$450 billion d)$1.8 trillion e)$18 trillion

e)$18 trillion

Which countries/economies experience business cycles? a)Only rich, advanced economies experience them. b)Only poorer, less advanced economies experience them. c)Only capitalistic, market-based economies experience them. d)Only socialist, state-run economies experience them. e)All countries/economies experience them.

e)All countries/economies experience them.

Along a typical downward sloping demand curve, what IS held constant? a)prices of related goods b)income c)tastes/preferences d)future price expectations e)All of the above are held constant.

e)All of the above are held constant.

Producer Surplus can be thought of as ______. a)the maximum price a buyer is will to pay for an item minus its cost to produce b)the price received by a seller for an item minus the price the seller was willing to receive c)the net benefit to producers from participating in the market d)lowest price a seller would be willing to accept to sell the item e)Both b and c are correct

e)Both b and c are correct

Consumer Surplus can be thought as of ____________. a)the maximum price a buyer is willing to pay for an item (good/service/resource). b)the price a buyer is willing to pay for an item minus its cost to produce c)the price a buyer is willing to pay for an item minus its market price d)the net benefit to consumers from participating in the market e)Both c and d are correct

e)Both c and d are correct

Which of the following would shift the demand curve? a)a change in the incomes of consumers b)a change in the tastes or preferences of consumers c)a change in the price of the good or service d)All of the above are demand shifters. e)Only a and b are correct.

e)Only a and b are correct.

Which of the following is a supply shifter? a)expected price (what sellers believe the price will do in the future) b)price of the good itself c)price of inputs d)All of the above are supply shifters. e)Only a and c are supply shifters.

e)Only a and c are supply shifters.

What economist is generally credited with devising the method for tracking a country's total production? a)Adam Smith b)Milton Friedman c)John Maynard Keynes d)Karl Marx e)Simon Kuznetse)Simon Kuznets

e)Simon Kuznets

Generally for a typical market, a decrease in demand will cause the equilibrium price (P*) to ____ and equilibrium quantity (Q*) to ______ a)rise;rise b)rise; no effect c)no effect; fall d)fall; rise e)fall, fall

e)fall, fall

The goal of producing as much goods and services from our finite pile of resources centers on the concept of efficiency , while the manner in which we divide up the goods/services we have made centers on the concept of equity .

efficiency/ equity

As price falls, quantity supplied...?

falls

As quantity demanded rises, price...

falls

As quantity supplied falls, price...?

falls

As price rises, quantity demanded...

falls (people wish to buy less of the good as it becomes more expensive)

A decrease in consumer surplus would do what to price?

increase

A decrease in price would do what to consumer surplus?

increase

Quantity Supplied (Qs)

the amount of a good or service that sellers are willing and able to supply at various prices.

When short-term interest rates exceed long term rates, the treasury spread turns...?

n

Real interest rate =r nominal interest rate =i

r=i-rate of inflation

Real GDP per capita equation

real GDP/population

If something that is not represented in the graph changes then it is classified as a

shift

consumer surplus

the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it

Market demand (graphically)

the horizontal summation of all individual demand curves.

Micro economics

the study of how households and firms make decisions and how they interact in markets