macro exam 3

marginal costs of adjusting prices.

Menu costs are the:

substitution bias.

Suppose that a CPI basket includes avocadoes, pineapples and oranges. Avocadoes become very expensive, and consumers substitute away from avocadoes and buy hummus instead. If the CPI basket does not change to reflect the move away from avocados, the result is:

Microeconomics is the study of individual decisions in specific markets, whereas macroeconomics is the study of the economy as a whole.

What is the difference between microeconomics and macroeconomics?

an import.

When a U.S. consumer buys Canadian maple syrup at the grocery store, this purchase is:

finished and ready for the final user.

A "final" good or service is one that is:

subsidizing secondary school education.

A government can promote the development of human capital by:

a method through which inputs can be turned into outputs, given the available resources

A production function is:

working but whose skills are not fully utilized.

An underemployed person is one who is:

investment.

Enforceable property rights encourage economic growth by encouraging:

due to the time it takes for employers to search for workers and for workers to search for jobs.

Frictional unemployment is unemployment:

market value of all final goods and services produced within a country in a given year.

GDP is defined as the:

worker skills and knowledge.

Human capital refers to:

on average, prices went down across the economy

If you see that the consumer price index this year is lower than the consumer price index last year, this means that:

current dollar value of that good or service.

The "market value" of a good or service refers to the:

price that businesses pay over time for the inputs used in the production process

The Producer Price Index is an index that tracks the:

human capital.

The U.S. Department of Education sponsors the i3 program (Investing in Innovation), which provides grants to educational institutions and schools that have a proven track record of high student achievement. This is an example of a government program designed to build:

Y = f(L, H, K).

The aggregate production function is represented as:

percentage of the working age population that is either employed or unemployed.

The labor force participation rate is the:

when one input is held constant, while other inputs are increased, eventually output will increase by smaller and smaller amounts.

The law of diminishing returns states that:

age 16 or older who are not in the military or institutionalized.

The working age population includes people who are:

average price that consumers pay over time for a representative basket of goods and services.

the consumer price index is an index that tracks the: