econ tests
Choose the statement that is incorrect.
The Lucas wedge equals real GDP minus potential GDP.
An economy that uses new technology ____
does not eliminate scarcity
Real GDP ______.
does not include a measure of leisure time or environmental equality
Imports of goods and services are items that _____ in the United States _____ the rest of the world.
households, firms, and gov; buy from
Resource use is efficient when _______.
it is not possible to make someone better off w/o making somone else worse off
Increasing opportunity cost occurs along a production possibilities frontier because
resources are not equally productive in all activities.
An increase in the demand for golf clubs brings a ______ in the price of golf clubs and ______ in the quantity of golf clubs supplied
rise; an increase
People make rational choices by comparing _______.
benefits and costs
When firms in an economy start producing more computers and fewer televisions, they are answering the ________ question.
"what"
The table gives data about an economy in 2012. The value of GDP in 2012 is ______.
$1536 billion
Which of the following is an example of a final good or service?
Dan bought a Toyota
Choose the correct statement.
entreprenuears bear the risk
Use the data in the table to calculate aggregate expenditure and imports of goods and services. Aggregate expenditure is $ nothing. Imports of goods and services is $ nothing.
$107 $38
The money price of a pound of bananas is $0.20 and the money price of a jar of pasta sauce is $0.40. The opportunity cost of a jar of pasta sauce is _______. The relative price of a jar of pasta sauce is an opportunity cost because ______.
$2 pounds of bananas the relative price tells us how many pounds of bananss we must give up
The table gives the demand and supply schedules for smoothies. What is the equilibrium price of a smoothie? The equilibrium price is $ nothing a smoothie.
$3
Given the demand and supply curves in the graph, draw a point at the equilibrium price and equilibrium quantity. The equilibrium price is ______.
$3 per can of dog food
In 2013, real GDP per person was ______ per year lower than it would have been with no growth slowdown in the 1970s.
$31000
During a year, a firm's net investment is $3,200 and depreciation is $800. The firm's gross investment is ______.
$4000
Aggregate income in an economy in 2014 is $460 billion. Saving is $30 billion and imports are $35 billion. Aggregate expenditure in the economy in 2014 is ______.
$460 billion
The table gives the demand and supply schedules for movie downloads. Suppose that demand increases by 100 downloads a day and supply decreases by 50 downloads a day. What is the new equilibrium price of a movie download and what is the new equilibrium quantity of movie downloads? The new equilibrium price is $ nothing per download. The new equilibrium quantity is nothing downloads per day.
$6 700
A south sea island produces only coconuts. In 2011, the price of a coconut is $2.50 and the quantity produced is 200. In 2013, the price of a coconut is $3.50 and the quantity produced is 250. 2011 is the reference base year. Real GDP in 2013 in terms of base-year prices is ______.
$625
In 2010, U.S. exports were $1,840 billion and imports were $2,357 billion. What was the value of net exports? The value of net exports in 2010 was ___ billion dollars.
-517
William Gregg owned a mill in South Carolina. In December 1862, he placed a notice in the Edgehill Advertiser announcing his willingness to exchange cloth for food and other items. Here is an extract: 1 yard of cloth for 1 pound of bacon 2 yards of cloth for 1 pound of butter 4 yards of cloth for 1 pound of wool 8 yards of cloth for 1 bushel of salt Calculate the relative price of 1 pound of butter1 pound of butter in terms of pounds of woolpounds of wool. If the price of baconbacon is $0.200.20 a pound, what do you predict is the money price of a pound of woolpound of wool? >>> Answer to 2 decimal places. The relative price of 1 pound of butter1 pound of butter is nothing pounds of woolpounds of wool. If the price of baconbacon is $0.200.20 a pound, you would predict that the price of a pound of woolpound of wool is $ nothing. If the money price of bacon was 20cents¢ a pound and the money price of salt was $2.00 a bushel, people _____ buy bacon and trade it for cloth because ______.
.5 .8 would; they could buy 8 yards of cloth for only $1.60
The money price of a jar of pasta sauce is $2.50, and the relative price of a jar of pasta sauce in terms of bananas is 5.00 pounds of bananas per jar of pasta sauce. The money price of a pound of bananas is _______.
.50
In April 2014, the money price of a carton of milk was $2.01 and the money price of a gallon of gasoline was $3.63. The relative price of a gallon of gasoline in terms of milk was _______.
1.81 cartons of milk
Elizabeth owns a take-out counter. In an hour she can produce 40 sandwiches or 40 wraps. Ben also owns a take-out counter. In an hour he can produce 20 sandwiches or 10 wraps. Elizabeth's opportunity cost of 1 sandwich is ______. Ben's opportunity cost of 1 sandwich is ______. has a comparative advantage in sandwiches and has an absolute advantage in both goods.
1 wrap;.5 wrap Ben Eliz
Choose the correct statement or statements. 1. An economic model is a description of some aspect of the economic world that includes only those featuresAn economic model is a description of some aspect of the economic world that includes only those features that are needed for the purpose at hand.that are needed for the purpose at hand. 2. An economic model is more complex than the economic world it describes.An economic model is more complex than the economic world it describes. nothing 3. Ignoring details in an economic model makes the model inadequate for prediction.Ignoring details in an economic model makes the model inadequate for prediction. nothing 4. An economic model is tested by comparing its predictions with theAn economic model is tested by comparing its predictions with the facts.
1/4 are correct
The table gives some of the items in the U.S. National Income and Product Accounts in 2010. What is the value of U.S. GDP (income approach) in 2010? The value of U.S. GDP (income approach) in 2010 is $____ trillion.
14.4
Jim normally spends five nights studying for his economics test and his current grade in the course is 80 percent. He decides to spend six nights studying for his next economics test and his grade after that test rises to 9595 percent. The marginal benefit to JimJim of studying one more night for his economics test is _________
15 pts
Betty and Ann live on a desert island. With a day's labor, Ann can produce 8 fish or 4 coconuts; Betty can produce 6 fish or 2 coconuts. Ann's opportunity cost of producing 1 coconut is ________ and she should specialize in the production of ________.
2 fish; coconuts
In 2006, U.S. GDP using the income approach is $12.9 trillion and net domestic income at factor cost is $10.4 trillion. What is the value of indirect taxes less subsidies plus depreciation in 2006? The value of indirect taxes less subsidies plus depreciation in 2006 is $ ______ trillion.
2.5
The table gives the demand and supply schedules for smoothiessmoothies. What is the equilibrium price of a smoothiesmoothie and the equilibrium quantity of smoothiessmoothies per day? The equilibrium quantity of smoothiessmoothies is _ a day. The equilibrium price is $ _ a smoothiesmoothie.
25 $4
The figure shows Freda's PPF. Freda currently produces 15 bags of popcorn and no candies. If Freda decides to produce 1 bag of candies, her opportunity cost of the bag of candies is _______ of popcorn.
3 bags
Vicky currently produces corn and beef at point A in the graph. Use the graph to complete the following sentence. Vicky's marginal cost of producing an additional unit of corn is _______.
3 units of beef
Which of the following statements are normative and which are positive? 1. Dogs make better pets than cats.Dogs make better pets than cats. 2. We ought to drive our cars less and take public transportation more.We ought to drive our cars less and take public transportation more. 3. On average comma Americans have a greater body mass index than citizens from any other country in the world.On average, Americans have a greater body mass index than citizens from any other country in the world. 4. The United States imports more than it exports.
3/4 r positive. 1/2 NORMATIVE
The graph shows the marginal cost curve of hot tubs. What is the marginal cost of producing the 44 millionth hot tub? The marginal cost of producing the 44 millionth hot tub is _ swimming pools. The marginal cost curve is upward sloping because _______.
4 resources are not all equally productive in all activities
The graph shows the marginal cost of producing cookies and the marginal benefit from cookies in Oakdale. Oakdale achieves allocative efficiency if _______.
4 batches of cookies an hour are produced
The above table shows the demand schedule and supply schedule for chocolate chip cookies. What is the equilibrium quantity and equilibrium price for chocolate chip cookies?
4 pounds; $5 per o=pound
RowanRowan has been spending fourfour nights studying for herher engineeringengineering tests and herher current grade in the course is 5555 percent. SheShe decides to take a part-time job and study only threethree nights for herher next test. As a result, after herher next test, herher grade falls to 5050 percent. The marginal cost to RowanRowan of working one night a week is _______
5 pts
Esther owns an ice cream parlor. In an hour she can produce 18 milkshakes or 108 ice cream sundaes. Betsy also owns an ice cream parlor. In an hour she can produce 15 milkshakes or 75 ice cream sundaes. Calculate Esther's and Betsy's opportunity cost of a milkshake. Esther's opportunity cost of 1 milkshake is __ ice cream sundaes. Betsy's opportunity cost of 1 milkshake is __ ice cream sundaes. ______ has a comparative advantage in milkshakes and ______ has an absolute advantage in both goods
6 5 betsy;esther
The table gives the demand and supply schedules for hamburgers. What is the equilibrium quantity of hamburgers per day? The equilibrium quantity of hamburgers is nothing a day.
650
Valued at the market exchange rate, GDP per person in the United States in 2013 is ______ times that in China. Valued at purchasing power parity prices, real GDP per person in the United States in 2013 is ______ times that of China.
7.9;5.4
An economy produces only robots, pens, and pizza. The table gives the quantities produced and prices in 2012 and 2013. The reference base year is 2012. What is nominal GDP in 2012 and in 2013?
70 69
You plan to go to school this summer. If you do, you won't be able to take your usual summer job that pays $7 comma 0007,000 for the summer. The cost of tuition is $2 comma 0002,000 and textbooks cost $200200. You live with your family, which covers your living expenses of $1 comma 2001,200. What is your opportunity cost of going to school this summer?
9200
Jeb makes the following four statements about peanuts. Which statement best describes his quantity demanded in the peanut market?
At a price of $1 per pack, I plan to buy 2 packs of peanuts per week.
Choose the statement that is incorrect.
Canada has the world's highest HDI value.
Claire and Doug are farmers who produce beef and corn. Use the question facts to answer the following question. To maximize their total output of beef and corn _______. In a year, Claire can produce 10 tons of beef or 40 bushels of corn. In a year, Doug can produce 30 tons of beef or 60 bushels of corn.
Doug specializes in beef and Claire specializes in corn
Explain how the following headlines concern self-interest and the social interest: 1. Harrod'sHarrod's, a London department storea London department store, is opening branches in airportsis opening branches in airports, and Taco BellTaco Bell is expanding throughout Canadais expanding throughout Canada. 2. All automobilesAll automobiles must be fitted with seat beltsbe fitted with seat belts.
Harods and Taco Bell make decisions in their self-interest. Seat belts are in the social interest, but people decide whether to wear them in their self-interest.
Olivia and Helen produce shirts and ties. The figure shows Olivia's production possibilities frontier, PPFO, and Helen's production possibilities frontier, PPFH. Olivia and Helen can achieve gains from trade if _______.
Helen sells shirts to Olivia in exchange for some of the ties that Olivia produces
Since 1969, economic growth in ______ has been greater than in ______ because ______.
Hong Kong; the United States; the ratio of production of consumption goods to production of capital goods is greaterthe ratio of production of consumption goods to production of capital goods is greater in the United States than in Hong Kong
Which of the following is an example of money price?
Joe paid $15 to buy a pizza box from Mcd
The figure shows the production possibilities frontier for Mario's, a pizza and pasta producer. Draw a point at which the firm achieves production efficiency. Label it Efficient. Draw a point that is attainable but inefficient. Label it Inefficient. When production is efficient, ______.
MArios can produce more pasta only by producing less pizza
Choose the correct equation.
Net investment + depreciation = gross investment
Choose the correct statements. 1. The marginal benefit from a good or service is the benefit received from consuming one more unit of it. 2. We calculate marginal benefit from the slope of the PPF 3. Marginal benefit of a good is the opportunity cost of producing one more unit of it.of it. 4. We measure the marginal benefit from a good or service by the most that people are willing to pay for an additional unit of it.
Statements 1 and 4 are correct.
Which of the following is included in the measure of U.S. GDP?
a 2014 Cadillac CTS produced and sold as a new car in the United States in 2014
People are willing to give up 12 tacos per pizza if only 1 pizza is available; 7 tacos per pizza if 3 pizzas are available; and 3 tacos per pizza if 5 pizzas are available. Draw three points on the marginal benefit curve for pizza. Draw the marginal benefit curve for pizza through the points. Label the curve. Choose the correct statement.
The marginal benefit curve illustrates the principle of decreasing marginal benefit
Consider the following statements about factors that influence the standard of living, and choose the statement that is incorrect.
The omission of household production from GDP means that GDP overestimates total production.
The following statements are about economic coordination. Choose the statement that is false.
The world oil market is not truly a market because it is not centralized in one place
______ is an example of U.S. consumption expenditure.
Your purchase of a flight on American Airlines
Which of the following decreases the supply of popcorn?
a decrease in # of pop producers
______ good is an item that is bought by its final user during a specified time period. ______ good is an item that is produced by one firm, bought by another firm, and used as a component of a final good or service.
a final;intermediate
When Apple ComputersApple Computers decides to produce iPodsiPods by using more labourlabour and less capitalcapital, it is answering ______ question. When GapGap decides to produce athletic wearathletic wear rather than business suitsbusiness suits, it is answering ______ question.
a how;a what a for whom
If, as Betsy's income increases, her demand for filet mignon increases, then for Betsy, filet mignon is _______.
a normal good
All of the following are examples of investment except ___
a person's annual medical checkup
Choose the statement that is incorrect.
a rational choice will turn out to have been the best choice after the event
An incentive is _______.
a reward that encourages an action or a penalty that discourages an action
The graph illustrates the market for tea. The market equilibrium is at point A. After one or more changes, the market equilibrium moves to point B. You predict that the market for tea was most likely influenced by _______.
a rise in household income and a rise in # of plantations
Resource use is efficient when _______.
a situation cannot be improved upon
Economics is all of the following except _______.
a subject that tells countries what goods they must trade
When you choose to spend more on yoga classes and less on piano lessons, your choice illustrates _______.
a tradeoff
The table provides information about the production possibilities of a firm that produces bed linens. Draw points that show the three possibilities defined by the table. Label them A, B, and C. Draw the firm's PPF by connecting the points. Label it. Along this PPF, the quantities of ______.
all goods other than pillows and quilts remain constant
Two countries, Alpha and Beta, have identical production possibilities frontiers. If Alpha produces at point A and Beta produces at point B, then _______.
alpha consumes more than beta today but it will grow slower
In the market for bread, the supply of bread will increase if any of the following occur except ______.
an increase in the price of a loaf of bread
Read the news clip, then answer the following question. If OPEC is correct, the price change could have occurred as a result of demand changing because of ______ in the expected price of oil and supply changing because of ______ in the expected price of oil.
an increase;an increase
Draw a demand curve for football tickets labeled D, and a supply curve of football tickets labeled S. Use any prices and quantities you wish but make your demand and supply curves obey the laws of demand and supply. Draw a point to indicate the equilibrium price and equilibrium quantity. The equilibrium quantity _______.
and equil price are determines at the intersection of supply and demand curve
a firm is _____
any economic unit that hires factors of prod and organizes those factors to produce and sell goods/services
Social institutions such as firms, markets, property rights, and money _______.
are necessary to make decentralized coordination work
Suppose that the United States and Cuba decide to open up trade. If each country specializes in the good in which it has a comparative advantage, ______ will gain from that trade because ______.
both countries
The figure shows the production possibilities frontiers for two countries, Remus and Romulus in 1980. Production possibilities per person are smaller in Remus than in Romulus. Put a point on each curve and label the the curves. Between 1980 and 2015, economic growth occurred in both countries, so that production possibilities per person in Remus are now greater than production possibilities in Romulus. Draw the new PPFs for Remus and Romulus that illustrate their production possibilities in 2015. Label both curves. Since 1980, _______.
both countries have experienced econ growth, and growth in Remus has been more rapid than that in Romulus
The graph shows the market for bottled waterbottled water. Draw a point at the market equilibrium. Label it 1. Draw a demand curve that shows what happens if the price of a gym membershipgym membership falls. Label the curve D1. Draw a supply curve that shows the effect of a technological advance that cuts the cost of producing bottled waterbottled water. Label it S1. Draw a point at the new market equilibrium. Label it 2. If demand and supply change in the same direction, we _____ the direction of change of the equilibrium quantity and we _____ the direction of change of the equilibrium price.
can predict;cannot predict
Which of the following go together?
captial;hammer
Which of the following are included in the income approach to calculating GDP?
compensation of employees;proprietors' income;rental income
If as the price of wheat bran increases, the quantity of bread that firms plan to sell increases, then wheat bran and bread are _______.
complements
If, as the price of pasta increases, the quantity of pasta sauce that people buy decreases, then pasta and pasta sauce are _______.
complements
Bottled water and health club memberships are _______. French fries and baked potatoes are _______.
complements substitutes or sub in production
To make comparisons of real GDP between two countries we must ______.
convert the real GDP of one country into the same currency units as the real GDP of the other country, and use the same prices to value the goods and services in the countries being compared
Read the news clip, then answer the following question. The news clip illustrates a change in the supply of flights when it reports that American Airlines is _______
cutting # of flights w no mentiont of change in airfare
Hot dogs and burgers are substitutes. If the price of a hot dog decreases, the demand for burgers will _______
decrease, and the demand curve for burgers will shift leftward
A decrease in the price of vegetable oil, a substitute in production of margarine, will ______ the equilibrium price of margarine and ______ the equilibrium quantity of margarine
decrease;increase
As we move along a bowed−out production possibility frontier, producing more tacos and less pizza, the opportunity cost of a pizza ________.
decreases
When supply decreases and demand does not change, the equilibrium quantity ________ and the equilibrium price ________.
decreases;rises
When the quantity of capital in an economy increases, _______.
economic growth ocurrs but it is not free
Ed and Betsy grow apples and peaches. Ed has a comparative advantage in producing apples if _______. If Ed also has an absolute advantage in growing apples and peaches, he will _______.
ed's opp cost of producing peaches is grater than betsy's opp cost of prod peaches be more productive than betsy
Producers of printers expect the population to increase and the number of firms producing and selling printers to increase. You predict that the price of a printer will ______ and the quantity of printers bought will ______.
either ride, fall or remain the same; increase
For the past year, Venus has played tennis three times a month. She now decides to play tennis four times a month. You infer that for Venus, _______.
either the marginal benefit from a game has inc or cost has dec
Utopia produces only rock concerts and ball games. The table shows the marginal benefit and marginal cost schedules for ball games. If Utopia produces 62 ball games, the marginal benefit from ball games ______ the marginal cost of ball games. To achieve allocative efficiency, Utopia must ______ the quantity of ball games produced
exceeds;increase
A typical business cycle can be described by the sequence ______.
expansion;peak;recession;trough
Net exports increase when ______.
exports decrease but imports decrease by more than exports decrease
The goods and services that we sell to people in other countries are ______. The goods and services that we buy from people in other countries are ______. The value of exports of goods and services minus the value of imports of goods and services is ______.
exports; imports; called net exports
Property rights are legally established titles to the ownership, use and disposal of _____ and goods and services that are enforceable in the courts.
factors of production
Real flows are the flow of _______.
factors of production from households to firms and the flow of goods and services from firms to households
The price of a DVD rental is $1.50 and the price of a downloaded movie is $1.00. If the price of a DVD rental increases by $0.50, the relative price a downloaded movie
falls
U.S. gross domestic product is the market value of all the ______ produced ______ in a given time period.
final goods and services;within the US
Two countries, A and B, have identical production possibilities. The graph shows the PPF of these economies. The production possibilities of country B are growing faster than those of country A. Draw a point on the PPF at which: 1) country A might be producing. Label it A 2) country B might be producing. Label it B. Draw Country A's PPF after one year. Label it PPFA. Draw Country B's PPF after one year. Label it PPFB. The graph illustrates that the opportunity cost of economic growth is ______.
forgone current consumption
If the price of going to the movie theatergoing to the movie theater falls by a large amount, you have an incentive to _______.
go to see more movies
Choose the statement that is incorrect.
gov can make better decisions by using the tools of econ but businesses require tools of admin, not econ
Draw a supply curve for sweaters and label it. Use any prices and quantities you wish but make your supply curve obey the law of supply. The law of supply states that other things remaining the same, the higher the price of a good, the _______; and the lower the price of a good, the _______.
greater is the quantity supplied; smaller is the quantity supplied
The opportunity cost of producing a tub of ice cream is ______ at point A than at point B. The opportunity cost of producing a pound of butter is ______ at point B than at point A.
greater;greater
Potential GDP per person ______.
grows at a steady pace but not at a constant pace
According to the figure, the opportunity cost of producing another computer is
higher at B
Jack is producing at point J on PPFJ and Stephen is producing at point S on PPFS. Jack's opportunity cost of producing a ton of apples is ______ than Stephen's, so Stephen ______ gain from specialization and trade with Jack. Jack _ an absolute advantage in the production of apples and grapes
higher than;can has
_______ choose the quantities of labor, land, capital, and entrepreneurship to sell or rent. _______ choose the quantities of factors of production to hire.
household;firms
The market for frozen burritos is a competitive market _______.
if many ppl buy and many firms sell, so no single buyer or seller can influence
The graph shows the most recent U.S. business cycle. During 2012, the U.S. economy was ______.
in an expansion
Choose the statement about incentives that is incorrect.
incentives create scarcity
A good economic model
includes only those features of the world that are needed for the purpose at hand.
Entrepreneurship ______.
includes ppl who come up w new ideas
Da Vinci Code fans helped to raise Eurostar's sales because they ______ between London and Paris. CNN commented on the "fierce competition from budget airlines." This competition decreases the ______ Eurostar travel because Eurostar and budget airlines are ______ Da Vinci Code fans in Paris increased the ______ travel in Paris and increased the ______ restaurant meals and hotel rooms. A.
increased demand for travel demand for; substitutes demand for;demand for
The figure shows the demand curve for amusement park tickets. If the price of an amusement park ticket falls from $60 to $20, while all other influences on buying plans are unchanged, the quantity of amusement park tickets demanded __ . If the price of an amusement park ticket falls from $60 to $20, while all other influences on buying plans are unchanged, the quantity of amusement park tickets demanded changes from _____ to _____.
increases 12mil;24mil true
The figure shows the supply curve of MP3 players. If the price of a MP3 player rises from $20 to $60, while all other influences on selling plans are unchanged, the quantity of MP3 players supplied _______ .
increases from 6 mil to 18 mil
Draw a supply curve of cellphones. Label it. Use any prices and quantities you wish but make your supply curve obey the law of supply. Draw an arrow to indicate what happens to the quantity of cellphones supplied when the price of a cellphone rises. A rise in the price of a cellphone ______ the quantity supplied and ______ supply
increases; does not change
Read the news clip, then answer the following questions. The price of oil rises if the demand for oil ______ and the supply of oil ______. A shortage in the market for oil implies that ______.
increases;dec price of oil is being prevented from influencing buying and selling plans
Production points inside the PPF are
inefficient and attainable
Gravel purchased by a firm that produces cement is an example of ______ good. The $20 bill in your pocket is an example of ______ good.
intermediate; neither a final nor interm a final;intermediate
Which of the following are included in the expenditure approach to calculating GDP?
investment;consumption expenditure;net exports of goods and services
The firm that printed your textbook bought the paper from XYZ Paper Mills. This purchase of paper ______ part of GDP because the paper is ______ good. The value of the paper is counted in GDP as ______.
is not; AN intermediate part of the value of the textbook
Human capital _______.
is the knowledge and skill that people obtain from education, on the job training, and work exp
The income earned by the people who sell the services of the factor of production _______ is called _______.
labor;wages
The table shows the marginal benefit from pizza and the marginal cost of pizza in terms of soda forgone. If ______ pizzas are produced, the quantity of soda that people are willing to give up to get an additional pizza is greater than the quantity of soda that they must give up to get that additional pizza.
less than 40
Sophia wants to study economics tonight and also to visit her friend William.Sophia wants to study economics tonight and also to visit her friend William. SheShe thinks hard about how to allocate the evening between studyingstudying and visiting Williamvisiting William and decides to spend the first hourhour studyingstudying and then spend 5 hours5 hours visiting Williamvisiting William. SophiaSophia's decision is an example of _______
making a choice at the margin
You think hard about how to allocate the next hour between problem setsproblem sets and emailemail and decide to studystudy for the first 3535 minutes and then spend 2525 minutes dealing with your emailsdealing with your emails. Your decision is an example of _______.
making a choice at the margin
An economy produces yoga mats. If less than the efficient quantity of yoga mats is produced _______.
marginal benefit exceeds marginal cost
Suppose that when you study 4 hours for an exam comma your mark is 80 percent.you study 4 hours for an exam, your mark is 80 percent. If you study for an extra hour comma your mark is 85 percent.you study for an extra hour, your mark is 85 percent. Choose the correct statement.
marginal benefit from studying one more hour is 5%
Suppose a concert pianist practises the piano for 6 hours every day comma but to prepare for an upcoming concert commaa concert pianist practises the piano for 6 hours every day, but to prepare for an upcoming concert, she decides to practise for an extra hourshe decides to practise for an extra hour. The _____ of one more hourhour of practising nbsppractising is _____.
marginal cost;an hour of reading, if that is her best alt use of time
The quantity demanded of a good or service is ______.
measured as an amount per unit of time
The figure shows the supply curve of tacos. Draw an arrow to show what happens to firms' plans if the price of a taco falls but all other influences on selling plans remain the same. If the price of a taco falls, a ______ the supply curve occurs. If any factor that influences selling plans other than the price changes, then a ______ the supply curve occurs.
movement down along; shift of
The figure shows the demand curve for sundaes. Suppose that the price of a sundaea sundae risesrises but all other influences on buyers'buyers' plans remain the same. Show the effect in the graph. Draw either an arrow on the demand curve showing the direction of change or a new demand curve. If the price of a sundaea sundae risesrises, a ______ the demand curve occurs. If any factor that influences buying plans other than the price changes, then a ______ the demand curve occurs.
movement up along; shift of
Choose the correct statement.
nominal GDp is just a more precise name for GDP
Two countries, Orange Rose and Blue Violet, produce only two goods: tea pots and coffee pots. The table gives their production possibilities. _______ has a comparative advantage in tea pots and _______ has a comparative advantage in coffee pots.
orange rose;blue violet
Draw a demand curve for lattes and label the curve. Use any prices and quantities you wish, but make your demand curve obey the law of demand. The law of demand states that ______, the ______ the price of a good, the smaller is the quantity demanded.
other things remaining the same;higher
Every day, we make many choices. We can't avoid having to make choices because ________.
our wants exceed the resources available to satisfy them
Mario's, a pizza and pasta producer, experiences increasing opportunity cost. Draw a production possibilities frontier for Mario's that illustrates this fact. Label it PPF. Draw a point that is attainable. Label it Attainable. Draw a point that is not attainable. Label it Unattainable. Unattainable points are ______.
outside the PPF
If the price of a bottle of vitamins is $8, 2 million bottles of vitamins a year are bought. Draw a point at this combination of price and quantity. If the price of a bottle of vitaminsbottle of vitamins falls to $22, 1010 million bottles of vitaminsbottles of vitamins are bought. Draw a point at this combination of price and quantity. Draw a demand curve for bottles of vitaminsbottles of vitamins that is consistent with this information. Label the curve.
pic
The graph below shows an economy's PPF. In the right graph, draw three points to show the marginal cost of producing a hot tub when the number increases from 0 to 1, from 2 to 3, and from 4 to 5 hot tubs per month. Draw a marginal cost curve that is consistent with the PPF. Label it.
pic
The graph shows the market for computerscomputers. Draw a point at the equilibrium price and equilibrium quantity of computerscomputers. Label it 1. Draw a new demand curve that shows what happens in the market for computerscomputers if the price of a printerprinter rises. Label it D1. Draw a new supply curve that shows fewer firms in the computercomputer market. Label it S1. Draw a point at the new equilibrium price and equilibrium quantity of computerscomputers. Label it 2.
pic
The graph shows the market for gum. A fire destroys some factories that produce gum and the quantity of gum supplied decreases by 40 million packs a week at each price. Draw a curve to show the effect of this event. Label it 1. Draw a point to show the new equilibrium price and equilibrium quantity. Label it E1. At the same time the fire occurs, there is an increase in the teenage population, which increases the quantity of gum demanded by 40 million packs a week at each price. Draw a curve to show the effect of this event Label it 2. Draw a point to show the new equilibrium price and equilibrium quantity. Label it E2.
pic
The graph shows the supply curve of lamps. Draw a new supply curve that shows what happens in the market for lampslamps if the expected future pricethe expected future price of a lamp risesof a lamp rises but all other influences on selling plans remain the same. Label the curve. Use any prices and quantities you wish, but make your supply curve obey the law of supply.
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Aggregate expenditure in the United States is equal to consumption expenditure plus investment ______.
plus government expenditure plus net exports
Are either or both of these newspaper headlines positive or normative? 1. Our planet is warmingOur planet is warming because we burn too much coal.because we burn too much coal. nothing 2. The minimum wageThe minimum wage should not be increased.should not be increased. nothing Statement 1 is a ______ statement because it ______ be tested. Statement 2 is a ______ statement because it ______ be tested.
positve;can normative;cannot
Choose the statement that is incorrect.
potential GDP per person grows at a constant rate
The figure shows the production possibilities frontier for Suzie's Smoothies, a health-drink producer. Draw a point at which Suzie's Smoothies achieves production efficiency. We achieve production efficiency if we _______.
produce goods and services at the lowest possible cost
Mario's produces pizza and pasta and faces increasing opportunity costs. Draw a production possibilities frontier for Mario's. Label the curve. The production possibilities frontier is the boundary between those combinations of goods and services that can be _____ and those that ______.
produced;cannot be produced
For 50 years, Cuba has had a centrally planned economy in which government makes the big decisions on how resources will be allocated. We would expect Cuba's production possibilities (per person) to be smaller than those of the United States because Cuba _______. _______ is the social institution that helps the U.S. economy achieve allocative efficiency that Cuba might lack.
produces a greater proportion of consumption goods than capital goods, so its PPF does not shift outward as quickly as the PPF in the United States Property rights
Harry produces 9 balloon rides and 3 boat rides an hour. Harry could produce more balloon rides without producing fewer boat rides. Harry is ______ his production possibilities frontier.
producing inside
Choose the correct statement.
quality of labor depends on human capital
If the price of a printer falls, with all other influences on buying plans remaining the same, in the market for printers _______.
quantity of printers demanded increases
The graph shows the market for football tickets. Draw a horizontal line at a price at which there is a surplussurplus of football ticketsfootball tickets. Label it Price. Draw an arrow that shows the amount of the surplussurplus. A surplussurplus occurs at a given price when ______. The price _____ to reach equilibrium.
quantity supplied is greater than quantity demanded;falls
A supply curve shows the relationship between the ______ and _____ when all other influences on selling plans remain the same.
quantity supplied of a good; its price
A relative price is _______.
ratio of one money price to another
A decrease in the supply of golf clubs brings a ______ of golf clubs at the original price and a ______ in their price
shortage;rise
An increase in the demand for ramen noodles brings a ______ of ramen noodles at the original price and the market price will ______
shortage;rise
3.4 quiz me Now a rise in the price of sodaa rise in the price of soda increasesincreases the quantity demanded by 1818 milkshakesmilkshakes a week at each price. At the original equilibrium price, a ____ occurs. To return to equilibrium, the price of a milkshakemilkshake _____. As the market returns to equilibrium, the quantity demanded ______, and the quantity supplied ______.
shortage;rises dec;inc $8
A demand curve that illustrates the law of demand ______.
shows that the quantity demanded decreases as the price rises
In the figure, point E could be obtained if
society's resources increased
Which of the following items is an example of a tradeoff?
spend more $ on txtbooks and less on movies
Choose the correct statements about competitive markets. 1. A competitive market has many sellers.A competitive market has many sellers. 2. A competitive market has many buyers.A competitive market has many buyers. 3. All competitive markets are physical places where buyers and sellers meet.All competitive markets are physical places where buyers and sellers meet. 4. In a competitive market comma prices are eventually driven down to zero.In a competitive market, prices are eventually driven down to zero.
statements 1 and 2
Diet coke and regular coke are _______. Low-fat milk and cream are ______
substitutes for consumers and substitutes in production for producers complements in production for a dairy
Leather purses and leather shoes are _______. SUVs and pickup trucks are _______.
substitutes in production susbtitutes or substitutes in production
A decrease in the demand for golf clubs together with an increase in the supply of golf clubs brings a ______ of golf clubs at the original price and a ______ in their price.
surplus;fall
The quantity of iPads that people plan to buy this month depends on all of the following EXCEPT the
technology used to produce an Ipad
When you make a choice in your self-interest, _______.
that choice may also be the best choice for society
Choose the definition that gives the best overview of economics. Economics is the social science that studies the choices _______.
that we make as we cope w scarcity
The quantity supplied of a good or service is ______.
the amt producers plan to sell during a given time period
The expected price of an MP3 player next year falls. As a result, _______.
the demand for MP3 players today decreases
By remaining in school, you are paying an opportunity cost that includes _______.
the free time you could have
We observed a fall in the price of bottled water and an increase in the quantity of bottled water that producers sell. The most likely explanation is that ______.
the law of supply applies to bottled water but some other influence on selling plans has increased the supply of bottled water
When GDP per person in China in 2013 is valued at ______, GDP per person in the United States is _______ times that in China.
the market exchange rate; 7.9
Beth has three bowls of soup for lunch. The marginal benefit that Beth receives from the third bowl of soup is _______
the max amount that she is willing to pay for the 3rd bowl of soup
which of the following topics is studied in macro?
the national econ and global econ
Goods and services are ______.
the obj that ppl value and produce to satisfy human wants
Microsoft's marginal cost of the 100th copy of Microsoft Windows 8 is _______
the opp cost of producing the 100th copy of windows 8
If the price of a calculator is $6, 16 million calculators a year are supplied. Draw a point at this combination of price and quantity. If the price of a calculator falls to $1, 4 million calculators are supplied. Draw a point at this combination of price and quantity. Draw a supply curve for calculators that is consistent with this information. Label the curve. Along the supply curve, _______
the price changes but all other influences on producers' planned sales remain the same
The graph shows the marginal benefit curve for cans of sodacans of soda. What is the maximum amount that people are willing to pay for the 44 millionth can of sodacan of soda per day? The maximum amount that people are willing to pay for the 44 millionth can of sodacan of soda per day is nothing candiescandies. The marginal benefit curve illustrates _______.
the principle of dec marginal benefit
Firms are institutions that organise _____ of goods and services
the production
Choose the option that is an example of government expenditure.
the purchase of telephone service for HOR
The equilibrium price is the price at which _____ and the equilibrium quantity is the _____.
the quantity demanded equals the quantity supplied; the quantity bought and sold at the equilibrium price
The quantity of DVD players that firms plan to sell this month depends on all of the following except _______ because ______
the quantity of DVD playersDVD players that consumers plan to buy this month; a change in the quantity of DVD playersDVD players that consumers plan to buy this month changes the quantity supplied
The flows in the market economy that go from firms to households are _______. The flows in the market economy that go from households to firms are _______.
the real flows of goods and services and the income flows of wages, rent, interest, and profit; the real flows of labor, land, capital, and entrepreneurship and the flow of expenditure on goods and services
Demand is _____, when all other influences on buying plans remain the same.
the relationship between the quantity demanded of a good and the price of the good
The graph illustrates the market for digital cameras. Suppose the current price of a digital camera is $90 and 11 million digital cameras a year are bought. What do you predict will happen to the price of a digital camera?
the surplus of digital cameras forces the price down
Choose the correct statement.
to get from factor cost to market price, we add indirect taxes and subtract subsidies
Choose the correct statement.
to isolate the increase in production from the rise in prices, we distinguish between real GDP and nominal GDp
Stephen graduates from college and his income increases by $20 comma $20,000 a year. Nothing else changes. Stephen decreases the quantity of T-shirts and chocolate chip cookies that he buys and increases the quantity of gourmet ice cream that he buys. For Stephen, _______
tshirts and choc cookies are inferior goods
The amount paid by General Motors to its production line workersamount paid by General Motors to its production line workers is called _______.
wages
What is the fundamental fact of life from which all economic problems arise?
wants cannot be satisfied w all the available resources
Allocative efficiency occurs when
we cannot produce more of any good without giving up some other good that we value more highly.
Every day, we make many choices. We can't avoid having to make choices because ________.
we dont have enough time to do all the things wed like to do
Mitsubishi Heavy Industries makes the wings of the new Boeing 787 Dreamliner in Japan. Toyota assembles cars for the U.S. market in Kentucky. Choose the correct statement.
when the wings are sent to the US, their value appears as Japanese exports in their GDP
Which of the following questions is NOT a microeconomic question?
why does the gov spend more than it collects in taxes
Luxury car makers forecast a decrease in households' incomes and a decrease in the ease in which credit can be obtained. You predict that the demand for luxury cars today _______.
will decrease
A golf club membership is a normal good. If the price of a golf club membership rises, you predict that the demand for golf club memberships _______
will remain unchanged
When you make economic choices that result in what comma how comma and for whom goods and services are producedthat result in what, how, and for whom goods and services are produced, _______.
you are making choices that are in your self-interest and the people who produce and deliver the goods and servicesand the people who produce and deliver the goods and services that you decide to buy are also making choices in their self dash interest
Choose the correct statement.
you make choices that are in your self-interest
