economics homework and quizzes
Suppose that an economy's output does not change from one year to the next, but the price level doubles. What happens to nominal GDP?
Nominal GDP doubles
which of the following will not by itself increase the average productivity of labor?
an increase in the size of the labor force
which of the following is the best example of an "economic investment"?
apple builds a new plant to manufacture iPads
From Jan. 1, 1980 to Jan. 1, 2010, particular country's real GDP doubled in value. If this is true, what was that country's average yearly rate of GDP growth over that time-span?
approximately 2.3%
software firms often experience sizeable growth due to the "spreading of development costs" as production increases. This phrase specifically refers to the fact that:
as the software's initial development cost is spread over a larger number of units, the cost-per-unit will decrease, eventually resulting in a lower price for consumers.
The production technique that is most efficient is the one that produces a given amount of output:
at the lowest cost per unit
Economics is a social science that studies how individuals, institutions, and society may:
best use resources to maximize satisfaction of economic wants
In a market system, which of the following will eliminate high-cost producers, and allow only the low-cost producers to survive?
competition
A person observes that consumer prices often fall when a nation experiences economic growth. The person then concludes that falling consumer prices leads to economic growth. This would be an example of:
confusing correlation and causation
which of the following is an example of a positive demand shock?
consumers suddenly increase their consumption spending due to an increase in real wages
The economizing problem for individuals is a consequence of the fact that:
economic wants are greater than economic means or incomes
If a family's income increases by 5% at the same time that inflation is 2%, then the
family's standard of living will likely increase
Real GDP is preferred to nominal GDP as a measure of economic performance because:
nominal GDP uses current prices and thus may over- or understate true changes in output.
supply shocks
occur when sellers face unexpected changes in the availability and/or prices of key inputs.
Strong property rights are important for modern economic growth because:
people are more likely to invest if they don't fear that others can take their returns on investment without compensation.
Which of the following would not be emphasized in capitalist (market) economy?
preventing owners of capital from making high-risk investments with their resources
All else constant, in which instance will total revenue increase?
price rises and E subscript d equals -.41
Suppose that an economy's output does not change from one year to the next, but the price level doubles. what happens to real GDP?
real GDP doesn't change
For a nation's real GDP per capita to rise during a year:
real GDP must increase more rapidly than population.
Modern economic growth refers to countries that have experienced an increase in:
real GDP per capita
Above all else, stable and efficient financial institutions contribute to growth by encouraging the flow of:
savings and financial capital
a local Petco store typically produces and sells at its optimal level of 30 dog collars per week. petco also maintains a standing inventory of 20 dog collars. if prices are sticky and there is a positive demand shock this week resulting in demand for 40 dog collars, we would expect Petco to:
sell the additional dog collars out of its inventory and rebuild the inventory later when a negative demand shock occurs
in recent decades, the largest contributing factor to increases in american labor productivity is...
technological advancement
If the price elasticity of demand for a product is equal to -.5, then:
the demand for the product is inelastic
Suppose total output (real GDP) is $4000 and labor productivity is $8. We can conclude that:
the number of worker-hours must be 500.
which of the following statements accurately describes a situation where the rate of economic growth understates the growth of economic "well-being"?
the quality of most goods and services has improved over time.
"human capital" refers to...
the skills and knowledge that enable a worker to be productive
The term "consumer sovereignty" specifically means that:
what is produced is ultimately determined by what consumers buy
shocks to the economy occur
when expectations are unmet.
Economic systems differ from one another based on who own resources and:
who makes planning decisions regarding how to utilize the economy's resources
Economic growth rates in "follower" countries:
will never bring real GDP per capita up to the same levels as in leader countries, even if follower growth rates are greater than those in leader countries.
Lauren makes $150 a day as a bank clerk. She takes two days off work without pay, to fly to another city to attend the concert of her favorite band. The cost of transportation and lodging for the trip is $250. The cost of the concert ticket is $50. The opportunity cost of Lauren's decision to attend the concert is:
$600
Suppose that as the price of Y falls from $2.00 to $1.90 the quantity of Y demanded increases from 110 to 118. Then the price elasticity of demand is:
-1.37
The price elasticity of demand for widgets is 0.80. If this is true, then, all else equal, a 16% increase in sales implies a:
20% reduction in price
Assume that a consumer has $20 income to spend, she can buy only 2 goods, apples or bananas. the price of an apple is $1 and the price of a banana is $.50 i. if the consumer spent all of her money on either apples or bananas, how many apples or how many bananas would she be able to buy? ii. What is the slope of the budget line imdor apples and bananas if the quantity of apples was graphed on the horizontal axis and the quantity of bananas was graphed on the vertical axis? iii. Suppose that although she likes both kinds of fruit, the consumer likes apples more than bananas. Also suppose that the consumer believes that she would derive the most "utility" (satisfaction) from her $20 if she purchases a bundle consisting of 12 apples and 18 bananas. Given all of this information, which of the following is (most likely) true? iv. For this consumer, the opportunity cost of buying two bananas is:
I. 20 apples or 40 bananas ii. -2.0 iii. her desired bundle is unattainable, which means that she will probably reduce the size of her bundle by 2 bananas iv. 1 apple
The table below shows this weekly demand for hamburger in a market where there are just three buyers. price buyer 1(qd) buyer 2(qd) buyer 3(qd) 6 7 4 6 5 9 7 8 4 15 10. 12 3 21 15. 16 i. At a price of $5, the weekly market quantity demanded for hamburger is: ii. If the price of hamburger falls from $5 to $3, then the weekly market quantity demanded for hamburger will: iii. Suppose that in a different market, there are 200 hamburger buyers, each of whom has a demand schedule that's identical to Buyer #2 in the table above. The total quantity of hamburger demanded at $4 by the 200 buyers in this hypothetical market would be:
I. 24 ii. increase from 24 to 52 iii. 2000 ounces
Answer the following questions about demand and supply theory, as explained in chapter three: i. Steve went to his favorite hamburger restaurant with $3, expecting to buy a $2 hamburger and a $1 soda. when he arrived he discovered that hamburgers were on sale for $1, so Steve bought two hamburgers and a soda. Steve's response to the decrease in the price of hamburgers is best explained by: ii. Suppose that goods A and B are complements to each other. If the price of good A falls, then we would expect an: iii. A rightward shift of the supply curve for oil in the United States is most likely to result from: iv. An increase in the price of milk, used in the production of ice cream, will: v. Because of unseasonably cold weather, the supply of oranges has substantially decreased. This statement indicates the:
I. the income effect ii. increase in the quantity of A demanded and an increase in the demand for B iii. A decrease in wages paid to oil workers iv. decrease supply of ice cream, shifting the supply curve of ice cream to the left v. Amount of oranges that will be available at various prices has declined.
Which of the following best describes the "invisible hand" concept?
Self-interest in a market system will tend to promote the general public good as well.
Which of the following is a positive economic statement?
Stock prices rose by more than 5% for the fourth month in a row
Mia wants to buy a book. The economic perspective suggests that Mia will buy the book if:
The marginal benefit of the book is greater than its marginal cost
Which of the following generalizations is not correct?
The price elasticity of demand is greater for "necessities" than it is for "luxuries"
Which of the following exemplifies a microeconomic question?
Will a new type of electronic reader or tablet increase the number of buyers?
The elasticity of supply for a product will be 2.0 if:
a 1% decrease in price causes a 2% decrease in quantity supplied
Other things equal, which of the following would tend to decrease the rate of economic growth, as measured by changes in real GDP?
a decrease in the size of the labor force
Economists would classify all of the following as "land", except:
a hydroelectric dam
which of the following is not a supply factor?
aggregate expenditures of households, businesses, and government
"network effects" are:
increases in the value of a product to each user as the total number of users of said product rises
Total revenue falls as the price of Good X is reduced. Therefore, the demand for Good X is:
inelastic
Anything that is generally acceptable in trading for goods and services is known as a:
medium of exchange
