MACRO STUDY SET 1 FINAL EXAM

Consider the data shown in the table. Assume that the economy produces only frozen fish. What is the real GDP for last year using this year as the base year?

$185,000

(Figure: The Market for Apple AirPods) Use Figure: The Market for Apple AirPods. The figure shows the market for Apple AirPods. Assume that Sd represents the domestic supply curve and than Dd represents the domestic demand curve. If the world price equals $120, and there is free trade, what is the gain in producer surplus? -$5 million -$2.5 million -$2.25 million -$750,000

$2.5 million

Below is U.S. economic data for 2018. What was total spending? $21.22 trillion $23.73 trillion $20.58 trillion $21.86 trillion

$20.58 trillion

(Figure: Market for Pants) The figure shows the domestic market for pants. According to the figure, if there is international trade in this market, and the world price of a pair is $30, the value of the domestic producer surplus is: $1,600,000 $800,000 $400,000 $200,000

$200,000

In 2010, Canada's GDP was approximately $1,357 billion, and its population was about 34.12 million. What was Canada's approximate GDP per person in 2010?

$39,770

Consider the data shown in the table. Assume that the economy produces only barrels of oil. What is the real GDP for this year using last year as the base year? $4,800,000 $4,980,000 $5,229,000 $5,104,500

$4,980,000

Refer to the table below that shows data for Panama. What was Panama's real GDP per person in the year 2002?

$5,435.17

Based on the following statistics, how much is consumption?

$6.49 trillion

The aggregate production function Y = f((L, H, K) shows that economic growth can occur if: (i) human capital increases (ii) labor productivity falls. (iii) the capital stock in the country depreciates (iv) the depreciation rate increases

(i) only

The aggregate production function Y = f(L, H, K) shows that economic growth can occur if: (i) more labor is employed (ii) human capital Is reduced (iii) the dependency ratio rises (iv) the capital stock stays constant

(i) only

Refer to the diagram of the circular flow of income. The key lessons from this diagram are that: (i) all flows of resources are matched by flows of money. (ii) the market value of total output must be equal to total spending (iii) total spending must equal total income. (iv) all inputs are provided by businesses.

(i), (ii), and (iii)

In order to be considered unemployed, a person must: (i) be part of the working-age population (ii) be actively looking for work. (iii) not have been self-employed. (iv) must be noninstitutionzalized

(i), (ii), and (iv)

Which of the following is (are) included in investment? (i) military spending (i) the purchase of an aircraft by a domestic airline (iii) the purchase of $45,000 worth of bonds (iv) the purchase of $32,000 worth of stock (v) social scrutiny payments (vi) the contstruction of a highway by the federal government

(ii) only

Based on the following statistics, how much are net exports?

-$0.575 trillion

Refer to the table below, which shows data for the united Arab emirates (UAE). What was the economic growth rate in UAE in 2010? -11.27% 2.26% -15.15% -5.91%

-5.91%

In 2017, the total population of Africa was estimated to be about 1,250,000,00 people. This number, in billions, is: 12.5 1,250 125. 1.25

1.25

You are the manager at pure sweat studio, a membership-based sauna club, assigning closing duties to your team members. In 12 minutes, saidquah can fold all of the clean towels needed for a sauna for the next days use. she can clean a sauna room in 9 minutes. Landon can fold the towels in 10 minutes or clean a room for 15 minutes. Sadiquas opportunity cost of folding towels is _______ sauna rooms. A) 1.33 B) 0.75 C) 0.67 D) 1.50

1.33

France must give up the production of 75 ties to produce 25 additional dress shirts. The opportunity cost of producing four dress shirts is ____ ties. -4 -12 -71 -79

12

Suppose a labor market is described by the demand equation, Qd = 60 - 2w, and the supply equation, Qs = -10 + w, where Qd is the quantity demanded of labor, Qs is the quantity supplied of labor, and w is the wage (in dollars). If the government institutes a minimum wage of $25, how ma y workers will be willing to work in this market?

15,000,000

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?

2.4%

The table shows statistics for three Canadian cities at several different points in time. What was the number of people (in thousands) in Montreal's labor force in January 2005? 171.4 2003.1 2,888.8 1,831.7

2003.1

Refer to the table below, which shows data for the United Arab Emirates (UAE). Based only on the data in this table, in which year(s) did the UAE experience an increase in the standard of living?

2011 and 2012

The table shows statistics for three Canadian cities at several different points in time. What was the number of unemployed people (in thousands) in Toronto in January 2019?

234.2

in may 2019, texas reported acivilan labor force of 14,012,711. the number of employed people was 13,516,387. what was the unemployment rate?

3.5%

The table shows statistics for three Canadian cities at several different points in time. What was the unemployment rate in Montreal in January 2019?

6.2%

Consider the following graphs, which are discussed in the textbook. focus on the graph that looks at the relationship between GDP per person and infant deaths per 1,000 live births. What can explain this relationship?

As real GDP per person rises, maternal and fetal health increases due to better health care, education, sanitation, and nutrition.

END OF GROWTH

CHAPTER 10

END OF GAINS FROM TRADE

CHAPTER 6 COMPLETE

END OF CHAPTER GDP

CHAPTER 9

You recently renovated a large historic building in the heart of your city to convert into a boutique hotel, of which you're now the owner and operator. After a few months, you've noticed that the quantity of the hotel bookings vary. Sometimes more rooms are booked on weekends, but sometimes certain events through the week result in a greater quantity of rooms booked. You now want to forecast when to expect the most bookings, but you don't know which events will bring the most people to the hotel. The MOST accurate forecast would likely result if you: A) create a internal market for employees to bid for their preferred work schedules. B) determine that you have a knowledge problem when predicting bookings. C) use your centralized power as the owner to predict the most popular dates. D) design an internal prediction market for employees to indicate their expectations.

D) design an internal prediction market for employees to indicate their expectations.

You purchase a new car for $38,000. After six moths, you sell the car for $31,500. How much does GDP rise because of these two transactions?

GDP rises by $38,000

Which statement describes a source of comparative advantage? In general, France has an absolute advantage over Italy in the production of goods and services. The United States' airplane design technology is equivalent to that of India. Hawaii has a more favorable climate for the cultivation of tropical fruit than England has. Canada has as many trees that can be used to produce lumber as the United States has.

Hawaii has a more favorable climate for the cultivation of tropical fruit than England has.

END OF CHAPTER 8

INEQUALITY

END OF CHAPTER 7

INTERNATIONAL TRADE

What is the difference between spending from a microeconomic standpoint versus spending from a macroeconomic standpoint?

In macroeconomics, spending refers to spending by you, or your family, or your company, whereas in macroeconomics, spending refers to the spending by all consumers, all businesses, and the government in the economy.

Which statement describes a poverty line based on absolute poverty?

Income is below $5 per day per person in the household.

You have four friends. Which of your friends can be described as "cynically employed" Keele, who lost her job after her company lost a lot of customers during an economic downturn Regan, who is in a nursing home Arthur, who quit his job to look for a better job Martha, who is a full-time stay-at-home parent

Keele, who lost her job after her company lost a lot of customers during an economic downturn

Which is the difference between microeconomics and macroeconomics?

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

During the midst of the coronavirus pandemic, your uncle was part of a group of employees that his company laid off. His family's household income declined dramatically, and they struggled to provide for his two children. Which would NOT have been a U.S. government program potentially available to him?

Social security

During the midst of the coronavirus pandemic, your uncle was part of a group of employees that his company laid off. His family's household income declined dramatically, and they struggled to provide for his two children. Which would NOT have been a U.S. government program potentially available to him? SNAP Social security Medicaid TANF

Social security

Which of the following countries enjoyed significant catch-up economic growth in the second half of the twentieth century? Argentina Spain South Korea United States

South Korea

Why does apple design the iPhone in California but assemble the iPhone in china?

The United States has a comparative advantage in iPhone design.

The government passes a new investment tax credit initiative. Which input in the production function changes, and what is the effect on economic growth in the country?

The capital stock increases, and the economic growth us positively affected.

Dale is a stay at homer parent whose typical day consists of getting the kids ready for school, doing the laundry, cooking three meals, and cleaning the house. How are Dale's home activities counted as GDP?

They are not counted.

On camping trips, Katie is much faster than her husband, Brett, at putting up a tent and starting a fire. Who should do each task if they want to maximize their time sitting around the campfire?

They should first each focus on that task in which they have a comparative advantage. When one finishes the assigned task, they can help the other.

The aggregate production function is represented as:

Y= f(L, H, K).

Which gift is most like an income transfer rather than an in-kind transfer?

a gift card branded through one of the main credit card companies

Which of the following would lead to a slowdown in economic growth? -the institution of a savings tax credit -an increase in capital accumulation coupled with technological advancement -a reduction in the birth rate coupled with an increase in the retirement rate of a population -an increase in in innovation in the economy

a reduction in the birth rate couple with an increase in the retirement rate of a population

Much of the rise in income inequality in recent years in the United States comes from:

a rising gap between the incomes of highly educated and less educated workers.

A decreasing returns to scale production function is one where increasing all inputs by a certain proportion leads to output rising by:

a smaller proportion.

Southeast Asian countries experience high temperatures and high humidity during the monsoon seasons. This makes working conditions difficult. Because air conditioners are expensive and consume a lot of electricity an alternative air cooler called an Eco-cooler was invented. This device does not use electricity, is made from readily available soda bottles and works by funneling air into a room. This scenario is an example of -a technological innovation that can increase labor productivity and thus increase economic growth -the development of human capital -a decrease in the labor force participation rate om Southeast Asian countries. -a rise in productivity causing an increase in technology.

a technological innovation that can increase labor productivity and thus increase economic growth

Cornell can type reports faster and more accurately than Alice, is Cornell has a(n) ____ In typing reports.

absolute advantage

Many government programs associated with the welfare state are believed to cause deadweight loss, since they:

affect he incentives. to work and to save.

Many government programs associated with the welfare state are believed to cause deadweight loss, since they: affect the amount of disposable income that households have to spend. affect incentives to work and to save. are supported by tax revenues. are based on the ability-to-pay-principle.

affect he incentives. to work and to save.

Henry Ford's $5 per day wage is an example of:

an efficiency wage

A minimum wage that is above the equilibrium wage is:

an example of a price floor

A trade cost is:

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

During the Great Recession, the United States Congress increased the length of time that unemployment benefits could be received from 52 weeks to 99 weeks. This change caused:

an increase in the costs for the government

Which of the following would lead to a slowdown in economic growth? reduced inefficiency in production an increase in human capital an increase in the dependency ratio an increase in capital accumulation in the economy

an increase in the dependency ratio

Permanent income is a person's: average income over the past 10 years. fixed income in retirements average income over their lifetime. estimate of future income based on education and skills.

average income over their lifetime.

Which benefit could a company gain from using internal markets?

better allocation of its resources and more accurate predictions

When trade is based on comparative advantage:

both trading partners

When trade is based on comparative advantage:

both trading partners end up better off than when there is no trade.

The moral of the story of the Solow growth model is that:

capital accumulation alone alone cannot lead to sustainable economic growth.

If a bakery buys a second oven, hires a second baker, buys double the number of ingredients doubles the size of the bakery. and then produces double the number of cakes, then the bakery is experience

constant returns to scale

Collectively, people in nations that engage in international trade are likely to:

consume more than they could consume in the absence of trade.

Focusing on differences in the amount people actually spend on goods and services as a measure of their material well-being rather than comparing their current incomes leads to a focus on____ in discussions of there level of economic inequality across households. Permanent income consumption wealth intergenerational mobility

consumption

Property rights refer to:

control over a tangible or intangible resource

Your family's business, a manufacturer of plastic containers, depends on imports of recycled plastic pellets from Asia. You supplier offers a substantial volume discounts, so the larger is your order of plastic pellets, the lower are your production costs. Your family benefits from:

economies of scale.

In a single year, Germany can raise 100 tons of wheat or produce 1,000 boxes of daises. In the same growing season, France can raise 50 tons of wheat or produce 750 boxes of daises. When the two countries begin trading wheat for daises, consumer surplus for wheat consumption will: -fall in Germany -rise in Germany -stays the same in Germany -either rise or fall in Germany

fall in Germany

Medicaid is funded by: employee contributions to an HMO. the federal government only. state governments only. federal and state governments.

federal and state governments

Which of the following is a scaled number?

government budget deficit as a percentage of GDP

Consider these four graphs of the labor market, showing four different minimum wage levels. Which graph(s) shows a wage level where there is no employment?

graph B

If a country's domestic price of a good its below the world price of the good, then with trade, the domestic quantity supplied of the good will be____the domestic quantity demanded. greater than less than equal to not comparable to

greater than

The higher the minimum wage, as compared to the equilibrium wage, the:

higher the structural unemployment rate.

Chantelle grows tomatoes and sells them at the farmer's market. Because the price of tomatoes rises, she is encouraged to grow and sell more. This is an example of price functioning as a(n):

incentive

You're performing a competitive analysis for Dove, a lending personal care brand in the United States. Your findings indicate a trend towards consumer preference for deodorants made with more naturally derived ingredients. Because of the high price competitors are receiving for natural deodorants, Dove follows your recommendation and enters the natural deodorant market by launching the Dove Care by Plants line. For Dove, the high price acted as an

incentive

Consider the labor market shown here. If an efficiency wage of $14 is instituted in this market, the number of workers willing to work will:

increase by 2,000

(Figure: Market for Engines) The graph shows the domestic market for engines. Suppose that the world price of an engine is $800. According to the figure, the domestic total surplus ____by_____ in the free-trade equilibrium relative to the no international trade equilibrium. -increases; $60,000 -increases; $30,000 -decreases; $60,000 -decreases; $30,000

increases; $30,000

Price is functioning as a message when it:

is a line of communication between buyers and sellers in a market.

The equilibrium unemployment rate is also known as the ______ unemployment rate

long-run

During the coronavirus pandemic, global supply chain issues caused the supply of new cars to shift left. Which role did price play in the new car market? Price was a(n):

message to potential buyers that the marginal cost of manufacturing new cars is rising.

Social Security is a)n)____that is_____. monetary transfer; means-tested monetary transfer; not means-tested in-kind benefit; means-tested in-kind benefit; not means-tested

monetary transfer; not means-tested

You pay a plumber to install a new dishwasher in your home. Which statement is FALSE? -you experience gains from trade because they received money. -The plumber experiences gains from trade because they earned income. -Markets orchestrated the gains from the trade in this transaction. -Only the plumber experiences gains from trade because they recieved money.

only the plumber experiences gains from trade because they recieved money

As long as people have different _____, everyone has a comparative advantage in something.

opportunity costs

Refer to the diagram of the circular flow of income. Based on the diagram, the arrow going FROM box 2 to box 1 must be: earning by businesses. inputs used by businesses. spending by households. output bought by households.

output bought by households

Which of the following encourages the development of new ideas and inventions? capital accumulation negative economic growth patents government control of resources

patents

A prediction market is where

payoffs are linked to whether a uncertain event occurs.

Myrda works as an audio technician on Broadway, and frequently experiences short-term unemployment.. When she is working, she saves a good portion of her income, upon which she relies when she is unemployed Myrda's approach is consistent with the:

permanent income hypothesis.

Which is NOT a rationale for the creation of the social safety net? providing universal health care alleviating income inequality alleviating economic insecurity reducing poverty and providing access to health care

providing universal health care.

A tariff or quota will _____ prices and _____ the consumption of the protected goods in the importing country. raise; increase raie; decrease lower; increase lower; decrease

raise; decrease

Suppose the United States places a tariff on imported Brazilian ice (a type of wood). As a result of the tariff, the domestic price of lumber will_____, consumer surplus, and producer surplus will______.

rise; fall; rise

Suppose the United States places a tariff on imported Brazilian ice (a type of wood). As a result of the tariff, the domestic price of lumber will_____, consumer surplus, and producer surplus will______. rise; fall; rise fall; fall; rise rise; rise; fall rise; fall; fall

rise; fall; rise

A constant returns to scale production function means that if all inputs are increased by 75%, this should lead to output:

rising by 75%

The tech startup where you worked went out of business. You were worried about depleting your wealth entirely but avoided that outcome thanks to: social insurance means testing the leaky bucket workers' compensation

social insurance

When a country's production mix becomes more specialized due to increased international trade based on comparative advantage:

some industries in the country will shrink and possibly disappear

Which income redistribution would increase total well-being the most?

someone in the 95th percentile to someone in the 10th percentile.

South Korea's comparative advantage in cellular technology can be attributed to: -climate -factor endowments -specialized skills -exchange rates.

specialized skills

Which of these is a source of comparative advantage? -small-scale production -scare inputs -specialized skills -high tariff rates

specialized skills

Consider the graph of the labor market shown here. If the govern,ent mandates a minimum wage of $25, there is a labor:

surplus of 6,000 workers.

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

task is assigned to the worker with the lowest opportunity cost for performing the task.

Actual poverty is less than the official poverty rate primarily because: tax credits and non cash benefits are not included when calculating incomes most people with incomes below the poverty line threshold have a substantial assets most people report incomes below the poverty threshold to evade taxes. government statistics are notoriously unreliable.

tax credits and non cash benefits are not included when calculating incomes.

Along the same aggregate production function, the level of ____ is the same.

technology

The job creation argument for protection against free trade is:

that restricting imports allows for greater domestic production.

Technological advancement is NOT represented by which of the following? the adoption of an existing technology by new firms the invention of robotic meal preparation the creation of new apps designed to enhance efficiency and reduce wastage in production lines the invention of the light bulb

the adoption of an existing technology by new firms

Your artisan candle stick manufacturing business is doing well domestically, so you decide to expand it to other countries. As you would like to make international sales, you hope:

the dollar will depreciate against other currencies.

If the fri0ctional rate of unemployment is 1.45%, the structural rate of unemployment is 2.3%, and the total unemployment rate is 6%, then we can conclude that:

the equilibrium rate of unemployment is 3.75%

(Figure: Market for TVs) The figure shows the global market for televisions. According to the figure, at a world price of $600:

the quantity supplied exceeds the quantity demanded, and there is a downward pressure on the world price.

The official poverty line depends on___and is adjusted every year to reflect changes in the cost of living. only the major wage earner's annual income the size and composition. of a family only the size of the family only the composition of the family

the size and composition of a family

Economists generally believe that a person should specialize in the production of a good or service if:

they can produce the product while forgoing fewer alternative products than any other person.

Which of the following is an example of transfer payments:

unemployment benefits

Social insurance programs do NOT:

use a means test to qualify people for benefits.

You hope to find a job, which enables you to earn a high income, but you recognize that others making less Amy have a higher living standard because they have more:

wealth

An underemployed person is one who is:

working but those skills are not fully utilized

If you and your group partners assign various tasks fora project in the most efficient way possible, then is likely that:

you got a task in which you have a comparative advantage

Which of the following is an example of a durable good?

your new car

Which of the following is an example of a durable good? a soft drink your haircut your new car fresh flowers from the florist

your new car