macro econ exam 1

competitive market for Good Z. the equilibrium price and quantity in this market are, respectively:

$10; 30 units

determine which of the following statements are normative statements

- everyone in the country should be covered by national health insurance -the minimum wage is an important tool in fighting poverty and should be increased

determine which of the following statements are positive statements:

- the federal government spends half of its budget on national defense -the rate of unemployment is 4%

francis has a linear ppf. if she uses all her resources she can produce 400 bushels of tomatoes and 800 bushels of green beans. francis is not producing efficiently if she produces _____ bushels of tomatoes and ______ bushels of green beans

200; 200

if resources are scarce, it means that they:

are insufficient to provide enough goods and services to satisfy all human material wants and needs

supply of lemonade. if the price of lemonade is $1 per cup, the total quantity of lemonade supplied will be ____ cups per day

90

an economy is said to have a comparative advantage in the production of a good if it can produce that good:

at a lower opportunity cost than another economy

equilibrium occurs at the price of ____ and equilibrium quantity is equal to ____

P2; Q3

if the demand for tires goes down when the price of gas goes up, then tires and gas are:

complements

because of trade, a country may:

consume outside its production possibilities frontier

for an economist, the cost of something is:

what you gave up to get it

new fast food restaurant, ramona camped out for 48 hours to be one of the first 100 customers, she successfully obtained the prize; the cost to ramona of obtaining the "free meal a week for a year" prize was:

whatever else she could have done with the 48 hours

competitive market for Good Z. a surplus of the good will occur at the price of:

$15

which of the following is an assumption of the supply and demand model?

-many buyers -all products sold in the market are identical -many sellers

determine whether each of the following is true

-resource scarcity is a major economic concern for all countries -very talented individuals, who can do most things better than most people, can benefit from specializing in doing one thing

which of the following events will shift the supply curve for TV's to the left?

-the price of tv's is expected to rise next month -the minimum wage increases by $2

If Farmer Sam MacDonald can produce 200 pounds of cabbages and no potatoes or no cabbages and 100 pounds of potatoes and if he faces a linear production possibility frontier for his farm, the opportunity cost of producing an additional pound of potatoes is ________ pound(s) of cabbage.

2

an economy is efficient if it is:

not possible to produce more of one good without producing less of another good

which factor is most likely to shift the supply of milk to the right?

a decrease in the price of feed given to dairy cows

which statement is correct?

an economic situation is in equilibrium when no individual would be better off taking a different action

according to economic models of trade, when the US and mexico trade:

both mexico and the US will be better off

the law of demand implies that:

consumers will buy more at a lower price

suppose a fall front destroys 1/3 of the nations grapefruit crop. which panel best how this will affect the market for vitamin b tablets, a substitute in consumption for grapefruit?

demand increases (panel b)

in the circular-flow diagram, the product market is where:

households buy goods and services

which decision would marginal analysis be most relevant?

how many hours should I study for my exam?

if the value of homes in university city increases and, as a result, the people of university city spend more, incomes in university city will:

increase

an economic model:

is a simplified version of reality used to understand the real world economic conditions

Mark and Julie are going to sell brownies and cookies for their third annual fundraiser bake sale. In one day, Mark can make 40 brownies or 20 cookies, and Julie can make 15 brownies or 15 cookies. Based on this information, _____ has the comparative advantage in making brownies and _____ has the comparative advantage in making cookies.

mark; julie

bill and mickey make bongos and frisbees. who has the comparative advantage in producing frisbees?

mickey

in terms of the ppf, the inefficient use of available resources is shown by:

production at a point inside the ppf

if the price of a commodity increases, you can usually expect the:

quantity supplied to increase

the demand for meals at a local chipotle will shift to the left if:

salad works offers a 10% discount coupon in the local newpaper

Abe starts exercising regularly, and after a few months he can do twice as much of everything. In a single day Abe can now make 10 hamburgers or 8 milkshakes rather than the 5 hamburgers and 4 milkshakes he made in the past. We now know that Abe's production possibility frontier has _____, but his opportunity costs of making milkshakes _____.

shifted right; not changed

suppose half of the people in San Diego pack up and move to colorado springs. which panel best describes how this will affect the supply of houses in San Diego?

supply increases (panel c)

suppose oil becomes more expensive. which panel best describes how this will affect the market for gasoline, which is made from oil?

supply will decrease (panel d)

mr freezee: based on marginal analysis, mr freezee decides:

that he should not purchase the truck since the costs outweigh the benefits

the US and germany can produce both wheat and aluminum. the table shows the maximum annual output combinations of wheat and aluminum can be produced. based on the table:

the US has a comparative advantage in wheat and an absolute advantage in wheat

the US and germany can produce both wheat and aluminum. the maximum annual output combinations of wheat and aluminum that can be produced. which choice represents a possible trade based on specialization and comparative advantage?

the US would trade 1 ton of wheat to germany for 1.5 tons of aluminum

consider the market for ipads. what happens if a fantastic new alternative tablet is developed by samsung and at the same time, a boat carrying a large shipment of ipads is attacked by pirates and sunk?

the change in price is indeterminate and quantity decreases

the basis of the circular-flow diagram is that:

the flow of money into each market or sector is equal to the flow of money coming out of the market of sector