macro test 1
wages, interest, rent, and profit
4 categories of income
$2,500
A Texas oil company extracts petroleum and sells it to a refinery for $1,000. After processing, the refinery sells the gasoline to a wholesaler for $1,500, who then sells it to a gas station for $1,700. The gas station sells it to customers for $2,500. In these transactions, how much has been added to GDP?
$1,200
A midwestern farmer grows wheat and sells it to a miller for $500. After processing, the miller sells the flour to a baker for $800, who then sells it to a grocery store for $1,000. The grocery store sells it to customers for $1,200. In these transactions, how much has been added to GDP?
$85
Carl is considering attending a concert with a ticket price of $35. He estimates that the cost of driving to the concert and parking there will total an additional $20. In order to attend the concert, Carl will have to take time off from his part-time job. He estimates that he will lose 5 hours at work, at a wage of $6 per hour. Carl's opportunity cost of attending the concert equals
$1,450
Consumption spending $1,000 Wages and salaries $ 800 Rent $ 100 Government purchases $ 200 Profit $ 300 Exports $ 400 Interest $ 250 Private investment spending $ 400 Imports $ 550 GDP in this year was
the market value of all final goods and services produced in a economy during a period of time
GDP is
why wages for females are lower than for males in a particular labor market
a macroeconomist might study which of the following?
the unemployment rate
a measure that economists use in order to keep track of employment is
final good
a new home purchased by a family
final good
a new pick-up truck purchases by a consumer
a decrease in total production
a recession occurs when an economy experiences a period in which there is
we need to consider the entire economy at once with a model as simple as possible
aggregation is important in macroeconomics because
the scarcity of resources
all the problems studied in economics arise from
simplifies reality in order to focus on crucial elements
an economic model
an abstract representation of reality
an economic model can be described as
marginal benefit equals marginal cost
an optimal decision occurs when
intermediate good
coffee beans purchased by a coffee shop
increases; increases
during a business cycle expansion, total production _______ and total employment ________
three-dimensional objects, words, diagrams, and mathematical equations
economic models come in the form of
scarcity
economics is the study of choice under conditions of
they use all available information as they take actions intended to achieve their goals
economists assume that people are rational in the sense that
normative issues
economists disagree about whether increasing the minimum wage is a good idea, because they put different weight on the importance that the negative impacts have relative to the positive impacts. as such, the disagreements are usually over
the total quantity of goods and services produced in the u.s. each year
economists monitor economic growth by keeping track of
net export expenditure
ford produces 1,000 escapes in a factory in Missouri and ships them to a car dealer in shanghai, china
not included in GDP calculation
ford purchases door handles for the escape from an auto parts manufacturer in indiana
investment expenditure
ford purchases new machine tools to use in its Missouri escape factory
microeconomics
how does the price of corn change if the price of wheat increases?
macroeconomics
how will an increase in government spending impact the inflation rate?
macroeconomics
identify the best measurement of total output in the U.S. economy
$200
if GDP is $1,000, consumption is $750, interest payments are $200, rent payments are $400, and profits are $200, what must wages and salaries equal?
rises by an equal amount
if output rises, then income
we would be overestimating GDP
if we included the purchases of used goods in GDP,
the business cycle
in 2013, the U.S. auto industry experienced rising sales. the automobile industry was experiencing the effects of
real GDP rises faster than population
in only one of the following situations is a nation's standard of living certain to increase. which one?
goos and services purchased by each type of final user
in the expenditure approach to measuring GDP, we add the values of all
the accumulation of inventories by a firm
in the language of economics, which of the following would be defined as investment?
economics
is the study of the choices people make to attain their goals, given their scarce resources
average prices of goods and services in the economy
macroeconomics includes the study of what determines the level of
employment in the economy
macroeconomics includes the study of what determines the level of
what is happening in the economy as a whole
macroeconomics is the study of
economic growth, business cycles, and inflation
macroeconomics seeks to understand
total output, total employment, the general price level, and the general level of interest rates
macroeconomics studies the determination of
net exports
one major component of GDP that can be negative is
neither intermediate nor final good
one share of google stock
real GDP rises faster than the population
output per person rises when
business cycles
periodic fluctuations in real GDP are called
spending on plant and equipment, new housing construction, and changes in inventories
private investment during a year includes
the output of a good and service has risen faster than the population
rapid economic growth has increased the economic well-being of u.s. citizens because
severe and long-lasting phases of decreased output
recessions are identified by
every choice involves an opportunity cost
scarcity is central to the study of economics because it implies that
the value of the services of the real estate agent
suppose, in 2014, you purchased a house built in 2003. which of the following would be included in the gross domestic product for 2014?
scarce resources and unlimited wants
the basic problem addressed in economics is
total production experiences periods of increases and periods of decreases
the business cycle exists because
total expenditure; total income
the circular-flow diagram shows that _________ should equal _________
households
the circular-flow diagram shows that all sources of income are owned by
micro studies smaller parts of the economy such as markets and individuals; macro studies the economy as a whole
the difference between microeconomics and macroeconomics is
limited budgets
the economic behavior of government is constrained by
land, capital, labor, natural resources, and entrepreneurship
the four main categories of resources are
purchases of newly-produced plant and equipment
the largest component of private investment expenditure is
microeconomics
the most efficient market structure is perfect competition
the value of the next best alternative that must be sacrificed
the opportunity cost of an economic action is
expansion
the phase of the business cycle characterized by rising output is called
government expenditure
the state of Missouri builds a new highway to help improve access to the ford escape plant
they serve to redistribute money from one group of citizens to another
transfer payments are important for society because
transfer payments are simply transfers of income from one group to another and not a purchase of a new good or service
transfer payments are not included in GDP calculations because
unlimited wants exceed the limited resources available
what best describes scarcity?
real GDP is adjusted for changes in the price level; nominal GDP is not
what is the difference between nominal and real GDP?
the value of a firm's final product is the sale price; value added is the difference between the sale price and the price of intermediate goods
what is the difference between the value of a firm's final product and the value added by the firm to the final product?
households can use some of their income to purchase goods from foreigners as imports
when examining the circular-flow diagram,
we employ aggregation to reduce the number of markets we need to understand
when we study macroeconomics,
net exports= exports-imports
which of the following describes the relationship between net exports and imports?
real GDP increases faster than the population
which of the following indicates that the average standard of living is rising?
stable prices
which of the following is a major macroeconomic goal?
when per capita income falls, fewer meals are consumed at restaurants
which of the following is a positive statement?
flour purchased by a bakery for the production of bread
which of the following is the best example of an intermediate good?
a college professor purchases a new computer
which of the following would be included in a year's GDP?
movie ticket sales
which of the following would be included in the consumption component of GDP?
purchases of new trucks by federal express
which of the following would be included in the expenditures approach to calculating U.S. GDP?
total output in the nation
which of the following would be studied in macroeconomics?
not included in GDP calculation
you purchase a 2011 (preowned) ford escape hybrid from a friend
consumption expenditure
you purchase a new ford escape hybrid from a ford dealer
