Economics midterm
Which of the following is not one of the basic questions faced by countires when deciding how to allocate their scare resources?
When should it be produced?
The law of demand states that
as the prices decreases, the quantity demand increases
The cost of fertilizer, a key input in wheat production (which is then used to make bread and other wheat products), rises. What happens to the supply of wheat?
Supply decreases
If good A and B are substitutes, a decrease in the price of good B will have what effect on the demand curve for Good A
decrease the demand for good A
A new phone system purchased by a software manufacturer is considered to be
investment spending
Suppose that the U.S. economy produces 100 units of dog collars and 50 units of cat collars. If consumers became much more interested in buying cat collars, what opportunity cost would most likely result?
many fewer dog collars would be produced
The economic system in which the primary incentive is private gains and losses from voluntary exchange.
market economy
Economics is best defined as the study of how people, businesses, governments, and societies
make choices to cope with scarcity
In broad terms the diffrence between microeconomics and macroeconomis is
microeconomics studies decisions of individual people and firms and macroeconomics studies the entire national economy.
Factors of production include all of the following EXCEPT ________.
money
Which statement best explains why countries must make trade-offs?
national production is limited to the availability of scarce resources
Which factor has the least influence on the likelihood of a shift in the demand curve?
price
County X is socialist. Which person or group most likely controls energy resources in country X?
A government agency
Suppose a consumer buys a frozen dinner from the grocery store for $10. The frozen dinner manufacturer sold the frozen dinner to the store for $5. The frozen dinner company purchased the ingredients from a feed processing company for $2 and bought the box to put the dinner in for $1. How much has the GDP increased?
$10
During the summer you have made the decision to attend summer school, which precludes you from working at your usual summer job in which you normally earn $6,000 for the summer. Your tuition cost is $3,000, books and supplies cost $300, and room and board cost $1,000. The opportunity cost of attending summer school is
$10,300
Which of the following would be counted as consumption by the final user?
A new car purchased by an H&R employee for personal use.
The economic concept of trade off is most closely assosciated with which basic question?
What to produce
Why does technological change mostly afect supply?
Better production methods make it possible to produce more goods from thr same inputs.
Carlos started an internet marketing company. Which of the following gives the best example of how Carlos uses the scarce resource land?
Carlos rents office space for his company
Which of the following is a positive statement?
Entrepenuership is a scarce resource.
Countries strive for zero percent unemployment rates.
False
Which of the following is an improvement in human capital?
Frank's Furniture trains employees on a new computer sales system.
Micah makes $50 a week at his part-time job, as uses his earnings to buy movie downloads for $2 each. Suppose that the price of moie downloads increases to $4 each. According to the income effect, how does this change affect Micah?
He feels as though his income has declined becasue other costs have gone up.
A country that has experienced inflation would find its nominal GDP ____________ than its real GDP.
Higher
Why is government intervention most likely to be helpful in a market economy?
Incentives sometimes encourage producers to act in ways that are not beneficial to consumers.
What factor makes an economy efficient?
It is maximizing the full potential of its resources
A new sushi restaurant opens in a small town that has no other sushi restraunt. It is very successful and soon opens a second location. How does this most likely affect the market supply curve for sushi?
It shifts to the right because the quantity of sushi supplied at all prices has risen.
Jessica opens a bicycle store. Which of the following gives the best example of how Jessica uses the scarce resource of human capital.
Jessica hired an employee to do bicycle repairs
Which category is the statement, "The current rate of unemployment is 4.3%", correctly placed under?
Macroeconomics
Which of the following would be counted in the calculation of GDP?
Olivia bought a new iphone
Which of the following statements about services is correct
People rely on services for education, personal care, and entertainment.
The study of the world and why it works the way it does is?
Positive economics
In the context of the circular flow diagram, households:
Purchase goods and services from business
Which statement best explains the underlying cause of the law of increasing opportunity cost?
Some resources are better suited for one type of production than another
The law of supply states that, when the price of a good rises, the quantity supplied will
Stay the same
Which of the following is an examples of frictional unemployment?
Steve left his job to look for a better one.
James, who is 60 years old has been working in a hat making factory for 35 years, is unemployed because the hat making factory in his town closed and moved to Taiwan. James is experiencing"
Structural unemployment
Because of drought conditions in other parts of the world, farmers expect corn prices in the U.S. to rise in the future. What happens to supply?
Supply decreases
Suppose congress passes a new gas tax that gas suppliers must pay to fund road repair and construction. What happens to the supply of gas
Supply decreases
Through technological progress, a firm recently developed a genetically modified (GM) corn seed that allows farmers to get better corn yields in drought areas. Suppose that, due to consumer concerns over this technology, GM seeds are banned. Following the ban, what happens to supply?
Supply decreases
Suppose the government provides a subsidy for ethanol production, an energy source made from corn, what happens to the supply of ethanol?
Supply increases
A person must first be considered as part of the labor force before they can be considered unemployed.
True
Workers who would like to work more hours or prefer a job that better matches there skills are called
Underemployed
Which of the following questions would be explored in the study of macroeconomics?
What causes inflation?
Which question would a macroeconomict most likely seek to answer?
What effect does government borrowing have on the economy?
Sonia's school cafeteria has three meal options that each cost $2.50: a salad bar, a sandwhich with an apple and a hot entree. Sonia considers both the salad bar and the hot entree one day, and eventually chooses the hot entree. What is the opporutnity cost of her decision?
a salad from the salad bar
Whenever the the scarcity of money or time forces you to make a choice, you face
a trade-off
If the government decides to impose a price floor below the equilibrium price, the price floor will:
be ineffective
Black markets may develop if price ceilings are established
below equilibrium
Economists point out that scarcity confronts
both the poor and the rich
If the government decides to impose a price ceiling below the equilibrium price, the price ceiling will
cause a shortage of the good
Economics can be defined as the social science that explains the
choices that we make as we cope with scarcity
Carlos lost his job at the local auto parts store due to the economis slowdown in his state. Carlos is experiencing:
cyclical unemployment
What is the primary incentive for business owners in a markey economy?
earning profits
Government inteference with the circular flow matrix is intended to improve each of the following goals EXCEPT:
economic freedom
Which of the following is an economic goal that command economies do well at acheving?
economic security
Which of the following is an economic goal that traditional economies do well at achieving?
equity
Resources are exchanged for money in the:
factor market
Goods and services sold to their intended users are called:
final goods
Which of the following should NOT be considered when making an eocnomic decision?
forgone opportnity
Physical items produced in an economy are
goods
___________________ has to be removed in order to acuratly calculate GDP.
imports
All of the following would contribute to economic growth EXCEPT
increased number of natural disasters
Scarcity requires that people must
make choices
When the government chooses to use resources to build a dam, these sources are no longer available to build a highway. This choice illustrates the concept of
opportunity cost
If intermediate goods and final goods were both counted as GDP, the final number for GDP would be:
overstated
Entrepreneurs do all of the following EXCEPT
own all the other resources.
Which of the following groups curenlty has the lowest unemployment rates?
people with a bachelor's degree or higher
If there are many firms selling identical goods, if firms are free to enter and exit the market, and if consumers have full information about the price and availability of goods, there is
perfect competition
Anything long-lasting that is created by humans for use in production describes the scarce resource of
physical capital
________________ is the amount of output the average worker can produce in a given year.
productivity
Incentives help individuals make economic decisions by:
providing a reason to accept the opportunity cost of a choice
At a price above equilibrium
quantity supplied exceeds quantity demanded
Prices mostly determine production levels becasue:
rational buyers and sellers only make mutually beneficial voluntary exchanges
Which of the following correctly shows the relationship of scarcity, resources and wants?
resource scarcity > limited ability to produce goods and sevices > limited ability to satisfy wants limited ability to satisfy wants > resource scarcity > limited ability to produce goods and services resource scarcity >limited ability to satisfy wants > limited ability tp produce goods and services limited ability to produce goods ans services >limited ability to satisfy wants >resource scarcity
Which of these goods would be most affected by expectations of changing prices?
rolls of paper towels
Two movies that you want to see are releasing this weekend but you only have enough money today to see one. This statement best represents the economic concept of
scarce resources
Rebecca works as a lifeguard for her community pool during summers. In the fall Rebecca would experience what type of unemployment?
seasonal
Which of the following is NOT an example of a resource.
services
What main economic problem does rationing seek attempt to correct?
shortages
A country's ____________ is a measure of the wealth of goods and services available to help people in the country live comfortably?
standard of living
________ is a measure of the wealth of goods and services available to help people in the country live comfortably.
standard of living
The type of unemployment that results from a mismatch between job seekers and the types of jobs available is
structural
Suppose a new federal budget raises health care spending by $15 million. What is the opportunity cost of that change?
the alternative use of the $15 million on other goods or service
What would happen on a demand curve for Christmas trees in December?
the curve would shift right
A country's economy has declined by 5% in the past year. How has that country's production possibilities frontier changed?
the frontier has moved inward
Which of the following explains why a rise in the price of music downloads would cause you to purchase fewer music downloads.
the income effect
When there is a great demand for something that is in short supply, we expect
the price to rise
The amount of a good that consumers are willing and able to purchase at a particular price is
the quantity demanded
Exces supply is created when
the quantity supplied is larger than the quantity demanded
Which of the following is a macroeconomic topic?
the reasons for the rise in average prices
The tendency for consumers to switch away from a good whose price has risen, and toward other goods that have become relatively less expensive, is known as
the substitution effect
Which of the following explains why a rise in the price of gasoline would make using a car more expensive and would cause a switch to public transportation?
the substitution effect
The percentage of the labor force without a paid job is
the unemployment rate
Discouraged and underemployed workers cause:
the unemployment rate to understate the unemployment problem
The marginal benefit is the ____________ of thing the next step to do somethin one more time.
total benefit
An economy in which the incentives are primarly based on a system of social approval for performing well and dissapproval and possible banishment for rebelling or performing poorly is a:
traditional economy
Which of the following is an example of human capital?
trainers
On Saturday morning, you rank your choices for activities in the following order: go to the library, work out at the gym, have breakfast with friends, and sleep late. Suppose you decide to go to the library. Your opportunity cost is
working out at the gym