Macro Final F23

marginal costs of adjusting prices. [exam 3]

Menu costs are the:

above the supply curve and below the price. [exam 2]

On a market graph, producer surplus is the area that is:

earnings by businesses. [exam 3]

Refer to the diagram of the circular flow of income. Based on the diagram, the arrow going FROM box 2 to box 3 must be:

lead to price and quantity to move in the same direction. [exam 1]

Shifts in demand

comparative advantage. [exam 2]

Specialization will increase output when it is based on:

are incurred in the past and cannot be reversed. [exam 1]

Sunk costs are costs that

It is government-provided financial funding to households to compensate for bad outcomes such as unemployment, illness, disability, or outliving their savings. [exam 2]

What is social insurance?

Microeconomics is the study of individual decisions in specific markets, whereas macroeconomics is the study of the economy as a whole. [exam 3]

What is the difference between microeconomics and macroeconomics?

fall in the quantity demanded of vanilla lattes. [exam 1]

You go to Starbucks and see that the price of your favorite tall vanilla latte has gone up by 25 cents. All sizes of the vanilla lattes are now more expensive. As a result of this price increase, you would expect to see a

GDP does not change. [exam 3]

You just bought two used textbooks for $25 each. How much does GDP change because of your purchase?

0.63 [exam 4]

Total consumption is $1,400 when income is $1,600, and total consumption increases to $1,900 when income is at $2,400. What is the marginal propensity to consume?

borrow funds [exam 4]

What can the federal government do to finance a deficit?

The equilibrium price rises, and the change in the equilibrium quantity is ambiguous. [exam 1]

What happens to the equilibrium price and quantity when demand increases and simultaneously supply decreases, and the relative size of the shifts is not known?

Those with less income tend to pay a higher share of their income in taxes. [exam 4]

What is a regressive tax?

the minimum amount of reserves that each bank must hold [exam 4]

What is a reserve requirement?

to ensure maximum employment while maintaining stable prices [exam 4]

What is the Federal Reserve's mandate?

160 units [exam 1]

What is the equilibrium quantity in this market?

0.58 [exam 4]

What is the marginal propensity to consume if a $100 million increase in total income leads to a $58 million increase in consumption?

an import. [exam 3]

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

task is assigned to the worker with the lowest opportunity cost for performing the task. [exam 2]

When a manager uses comparative advantage to assign tasks in a workplace, then each

Rational Rule. [exam 1]

When faced with a quantity decision, the economic surplus is always maximized by following the

a shortage [exam 1]

When quantity demanded exceeds quantity supplied, _____ exists.

Figure C [exam 4]

Which of the following graphs shows the correct effect on the consumption function when consumers become pessimistic about the state of the economy?

Social Security [exam 2]

Which of the following is a social insurance program in the United States?

specialized skills [exam 2]

Which of the following is a source of comparative advantage?

lead to anticompetitive practices, such as dumping. [exam 2]

Which of the following is an argument for limiting international trade? An increase in international trade may:

Discount stores [exam 1]

Which of the following items is an inferior good?

Laura, who has been seeking employment for two months [exam 3]

Which of the following people can be classified as "unemployed"?

The opportunity cost principle. [exam 1]

Which principle tells you that the true cost of something is the next best alternative you have to give up to get it?

$350 [exam 2]

(Figure: Demand Curve 3) Use the graph of a demand curve for jars of laundry detergent to answer the question. What is the total consumer surplus if 50 jars are sold at a price of $6?

a decrease in quantity supplied. [exam 1]

(Figure: Graph) In the graph, the movement from point E to point F represents

an increase in demand. [exam 1]

(Figure: Graph) Refer to the graph to answer the question. In the graph, the movement from point M to point Q represents

an increase in quantity demanded. [exam 1]

(Figure: Graph) Refer to the graph to answer the question. The movement from point M to point N represents:

$12.50 [exam 2]

(Figure: Market 4) Use the watermelon market graph to answer the question. (Assume demand intercept at $7) What is the value of the total surplus at the quantity of melons with economic efficiency?

Graph A [exam 1]

(Figure: Market for Drones) If companies frequently start using drones to deliver products, which graph shows the effect this will have on the market for drones.

It is the amount of an item that a seller is willing to sell at a particular price. [exam 1]

What is quantity supplied?

working but whose skills are not fully utilized. [exam 3]

An underemployed person is one who is:

51 gallons [exam 1]

As part of a market research project, you survey six random people to see how much gas per week they would buy at various prices. The data you collect is in the accompanying table. What is the total demand for gasoline at $2.50 per gallon in your survey?

$40 [exam 1]

At what price does this market experience a shortage of 100 units?

$275,625 [exam 3]

Consider the data shown in the table. Assume that the economy produces only textbooks. What is the real GDP for this year?

$1,337 [exam 3]

Consider the following basket of goods: 50 hamburgers, 10 textbooks, eight T-shirts, and 100 bottles of water. Suppose that in 2015, each hamburger was $3.50, each textbook was $89.99, each T-shirt was $14, and each bottle of water was $1.50. In 2016, each hamburger was $3.60, each textbook was $95, each T-shirt was $13, and each bottle of water was $1.65. What was the approximate value of the basket in 2015?

shortage of 4,000 workers. [exam 3]

Consider the graph of the labor market shown here. At the wage rate of $13, the market has a:

is when buying an additional item yields a smaller marginal benefit than the previous item. [exam 1]

Diminishing marginal benefit:

substitutes-in-production. [exam 1]

Due to a decline in demand and popularity, Ford Motor Company is planning to phase out traditional sedans such as 'Fusion' and 'Taurus' to focus on SUVs and trucks. Ford's sedans and trucks/SUVs are

investment. [exam 3]

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. [exam 3]

Frictional unemployment is unemployment:

market value of all final goods and services produced within a country in a given year. [exam 3]

GDP is defined as the:

worker skills and knowledge. [exam 3]

Human capital refers to:

substitution bias. [exam 3]

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:

Ireland; Singapore [exam 2]

Suppose that one hour of labor in Singapore can produce 20 computers or 40 cellphones. Further, suppose that one hour of labor in Ireland can produce 10 computers or 15 cellphones. _____ has a comparative advantage in the production of computers. _____ has a comparative advantage in the production of cellphones.

Graph B [exam 3]

Technological advancement can be shown by which of these production functions?

current dollar value of that good or service. [exam 3]

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

overall prices are now 25% higher than they used to be. [exam 3]

The CPI changes from 100 to 125. This means that:

setting that brings together potential buyers and sellers. [exam 1]

A market is a

price per share divided by earnings per share. [exam 4]

A stock's price to earnings ratio is calculated as:

tax on imported products. [exam 2]

A tariff is a:

an extra cost incurred as a result of buying or selling a good abroad rather than domestically. [exam 2]

A trade cost is:

the economic surplus at the efficient quantity minus the economic surplus at the actual quantity. [exam 2]

A market's deadweight loss is calculated as:

a method through which inputs can be turned into outputs, given the available resources. [exam 3]

A production function is:

Graph C [exam 1]

(Figure: Market for Cars) Use the figure to answer the question. In 2011, Japan suffered a major earthquake and tsunami. Honda parts that were sourced from Japan could no longer be produced, which caused Honda to cut its production of cars. Which graph shows the effect of this shortfall?

Graph A [exam 1]

(Figure: Market for Coffee) A coffee shop opens next to an existing coffee shop. Which of the following graphs shows the effect of this new coffee shop on the market supply curve for coffee in this area?

Graph D [exam 1]

(Figure: Market for Apple Computers) Dell and Apple are competitors in the computer market. Which graph illustrates the effect of a rise in the price of Dell computers on the demand for Apple computers?

$250,000. [exam 2]

(Figure: Market for Engines) According to the figure, if there is international trade in this market, and the world price of an engine is $800, the value of the consumer surplus is:

Graph A shows what happens in the market for Minute Maid, and Graph B shows what happens in the market for Tropicana. [exam 1]

(Figure: Market for Juice) Use the figure to answer the question. You are studying the demand for Minute Maid and Tropicana orange juice. Minute Maid improves the taste of its juice and people start preferring Minute Maid over Tropicana. Which graph depicts the impact of these changes on both Minute Maid and Tropicana?

Graph A [exam 1]

(Figure: Market for Luxury Vehicles) Which graph shows what will happen in the market for luxury vehicles if a recession is imminent?

70,000; 40,000 [exam 2]

(Figure: Market for TVs 2) According to the figure, if there is international trade in this market, and the world price of televisions is $500, the quantity demanded is _____, and the quantity supplied is _____ at the world price.

$600. [exam 2]

(Figure: Market for TVs 2) According to the figure, if there is no international trade, the equilibrium price in this market is:

40,000; 30,000 [exam 2]

(Figure: Market for TVs 2) Suppose that the world price of TVs is $400, and the government imposes a $100 tariff. According to the figure, domestic consumers purchase _____ units from domestic producers and _____ units from foreign producers after the tariff.

Graph D [exam 1]

(Figure: Market for Train Rides) Use the figure below to answer the question. A major technological advancement occurs in transportation technology, which leads to faster and more efficient train systems. Which graph depicts the effect on the supply of train rides?

3 cones [exam 1]

(Figure: Mia's Demand Curve for Ice Cream) The accompanying graph shows Mia's demand curve for ice cream, how many cones would Mia be willing to buy at $5 per cone?

$135 [exam 2]

(Figure: Supply Curve) Use the graph of a supply curve for jugs of laundry detergent to answer the question. (Assume supply intercept at $5) If 18 jugs are sold at a price of $20, what is the total producer surplus?

1.5 ironed dress shirts; 1.67 ironed dress shirts [exam 2]

(Table: Bruno and Sasha's opportunity cost) The table provides data on the number of minutes it takes for Bruno and Sasha to each change a tire and iron a dress shirt. Use the data to answer the question. When changing a car's tire, Bruno's opportunity cost is _____, and Sasha's opportunity cost is _____.

weeding three flower beds; weeding two flower beds [exam 2]

(Table: Comparative Advantage for Mia and Juanita) The table provides data on how long it takes Maia and Juanita to mow the lawn and weed the flower beds. Maia's opportunity cost for mowing the lawn is _____, and Juanita's opportunity cost for mowing the lawn is _____.

Jason because he has a lower opportunity cost than Marla. [exam 2]

(Table: Cooking time) The table provides data on how long it takes Marla and Jason to cook lasagna and cook chicken curry. Which statement explains who has a comparative advantage in cooking chicken curry?

finished and ready for the final user. [exam 3]

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

many people want to withdraw their savings from a bank at the same time, and the bank does not have enough cash on hand. [exam 4]

A bank run occurs when:

subsidizing secondary school education. [exam 3]

A government can promote the development of human capital by:

quantity supplied equals the quantity demanded. [exam 1]

An equilibrium price is a price where the

a specific product. [exam 4]

An excise tax is a tax on:

sold to a foreign buyer. [exam 2]

An export is a good or service:

purchased from a foreign seller. [exam 2]

An import is a good or service:

a guarantee that you will get your money back, even if the bank collapses. [exam 4]

Deposit insurance is:

is appropriated by Congress annually. [exam 4]

Discretionary spending is spending that:

excess consumption over and above income. [exam 4]

Dissaving is:

timely, targeted, and temporary. [exam 4]

Fiscal policy works best when it is:

provides information about the future course of monetary policy in order to influence expectations about future interest rates. [exam 4]

Forward guidance occurs when the Federal Reserve:

social insurance system. [exam 2]

Government-provided financial funding to households to compensate for bad outcomes such as unemployment, illness, disability, or outliving your savings is known as a:

normal goods. [exam 1]

Holding all else constant, if people eat out more at expensive restaurants when they earn more, then expensive restaurant meals are

Monetary policy adjusts interest rates, whereas fiscal policy adjusts government spending and taxes. [exam 4]

How is monetary policy different from fiscal policy?

raise; down [exam 4]

If the output gap is positive, then relative to the neutral interest rate, the Federal Reserve will _____ the real interest rate to drive _____ consumption and investment.

quantity supplied of jet fuel increases. [exam 1]

If the price of jet fuel rises, the

lower; induce [exam 4]

If the problem in the economy is very high cyclical unemployment, we expect the Federal Open Market Committee (FOMC) to _____ interest rates to _____ spending today.

on average, prices went down across the economy. [exam 3]

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

2.4% [exam 3]

In May 2019, there were approximately 68,980,000 people in Japan's labor force. About 1,650,000 people were unemployed. What was the unemployment rate?

above the price and below the demand curve. [exam 2]

In a market graph, consumer surplus is the area:

social security, unemployment, and labor. [exam 4]

In the United States, the largest components of federal government spending are:

the economic status of children is independent of the economic status of their parents. [exam 2]

Intergenerational mobility is the extent to which:

supports programs that do not get determined annually but instead are set in law. [exam 4]

Mandatory spending is spending that:

an inefficient outcome. [exam 2]

Market failure occurs when market forces lead to:

facts; relationships [exam 2]

Positive analysis is based on identifying _____ and _____.

set the minimum amount of reserves a bank must hold. [exam 4]

Reserve requirements:

1.79% [exam 4]

The table contains information about Walmart's stock. What is the annual rate of return a shareholder should expect to receive in dividends from Walmart?

65.7% [exam 3]

The table shows Canada's labor force characteristics. What was Canada's labor force participation rate in March 2019?

4.22% [exam 3]

The table shows consumer price index data for the United States. Based on this information, what is the rate of inflation in 1991?

17,100 euros. [exam 4]

The table shows the salary of a worker in Germany. The level of saving in 2016 is:

stock market, the bond market, and the banks. [exam 4]

The three major pillars of the financial sector are the:

age 16 or older who are not in the military or institutionalized. [exam 3]

The working age population includes people who are:

focus on the task in which they have a comparative advantage. [exam 2]

To maximize production, people should

special deductions, credits, or exemptions that lower your tax obligations. [exam 4]

Tax expenditures are:

the Fed governors and the Fed district bank presidents. [exam 4]

The Federal Open Market Committee (FOMC) is made up of:

price that businesses pay over time for the inputs used in the production process. [exam 3]

The Producer Price Index is an index that tracks the:

human capital. [exam 3]

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:

marginal principle [exam 1]

The __________ suggests, decisions about quantities are best made incrementally.

Y = f(L, H, K). [exam 3]

The aggregate production function is represented as:

fairness. [exam 2]

The concept of equity focuses on:

average price that consumers pay over time for a representative basket of goods and services. [exam 3]

The consumer price index is an index that tracks the:

benefits are greater than the costs. [exam 1]

The cost-benefit principle states that a decision should be pursued only if the

nominal interest rate that banks pay on overnight interbank loans. [exam 4]

The federal funds rate is the:

percentage of the working age population that is either employed or unemployed. [exam 3]

The labor force participation rate is the:

the inverse relationship between price and quantity demanded. [exam 1]

The law of demand refers to

when one input is held constant, while other inputs are increased, eventually output will increase by smaller and smaller amounts. [exam 3]

The law of diminishing returns states that:

the positive relationship between price and quantity supplied. [exam 1]

The law of supply refers to

the change in consumption divided by the change in income. [exam 4]

The marginal propensity to consume is:

Two [exam 1]

The price of coffee at a local coffee shop is $3. Cheryl is willing to pay $6 for her first cup of coffee each day. The marginal benefit to her of each additional cup of coffee falls by $2. How many cups of coffee should Cheryl purchase?

interdependence [exam 1]

The principle that your best choice depends on your other choices, the choices others make, developments in other markets, and expectations about the future is known as the _____ principle.

$3,982 [exam 4]

The standard deduction for a single person is $12,200. Based on this table, if your total income is $47,000, what is the amount of tax you will pay on your taxable income?

$9,015 [exam 4]

The standard deduction for a single person is $12,200. Based on this table, if your total income is $72,000, what is the amount of tax you will pay on your taxable income?

$22,800. [exam 4]

The standard deduction is $12,200 for a single person. Suppose you file as a single person, and your current income is $35,000. This means that your taxable income is:

$200.33 billion. [exam 4]

The table contains information about Pfizer's stock. How much is Pfizer, as a company, worth?