Macroeconomic (170) Chapter 1,3,4,19
At the current market price in the market for smartphones, the quantity of buyers is larger than the quantity of sellers. Given this situation, we can expect the market price of smartphones to: a) Increase b) Decrease c) remain unchanged
a) Increase
Consider the demand for socks. What would cause a movement from one point on the demand curve to a point further down the curve? Increased demand for a kind of shoe typically worn without socks. Decreased demand for a kind of shoe typically worn without socks. A big sale on socks. An increase in the price of socks.
A big sale on socks.
Which of the following would cause the demand curve for ice cream to shift to the right? A rise in the price of popsicles, a substitute for ice cream. A reduction in the price of ice cream. An unexpected cold and rainy summer season. A reduction in the cost of producing ice cream.
A rise in the price of popsicles, a substitute for ice cream.
Which of the following words best describes what economics is about? Growth Happiness Money Choices
Choices
Which of the following is a decision that follows the net marginal benefit principle? Choosing among different roller coasters based on their distance from the theme park entrance. Deciding whether to spend one more hour studying for an exam. Deciding to order a dessert at a non-buffet restaurant more often than you have dessert at a buffet. Choosing to give up eating meat due to concerns regarding the treatment of animals.
Deciding whether to spend one more hour studying for an exam.
Which of the following would be most closely related to microeconomics? How rising wages affect the choice of working instead of going to school. The extent to which people leaving the labor force affects unemployment. How rising prices cause standards of living to fall. The effect of improving consumer confidence on economic growth.
How rising wages affect the choice of working instead of going to school.
Miranda and Jason are in the tutoring business. Miranda is willing to tutor as long as she gets $20, while Jason will not tutor unless he gets $35. If the most that someone would pay for tutoring is $30, how much producer surplus is earned? Miranda = $20; Jason = $0 Miranda = $20; Jason = -$5 Miranda = $10; Jason = $0 Miranda = $10; Jason = -$5
Miranda = $10; Jason = $0
For each example, determine how the market for the good in bolded text will respond to the described change. Due to increases in hay prices, an input for raising cattle, the price of a gallon of 2% milk increases from $2.98 to $3.25. A company offers a coupon for $6 off the price of laser tag. A sharp increase in the price of wood causes increases in prices for dressers and desks. At a week‑long special at the grocery store, pork shoulder is on sale at $1.99/lb, down from $3.99/lb. A website offers a buy‑one‑get‑one‑free special for digital music albums.
Quantity demanded decreases Quantity demanded increases Quantity demanded decreases Quantity demanded increases Quantity demanded increases
In 2008, Betserai was a 10-year-old quintrillionaire living in Bulawayo, Zimbabwe. He was literally rolling in money. In fact, Betserai has so much money that he decided to make kites out of billion dollar bills instead of putting the money into the bank to earn interest. None Betserai's friends bothered to save their money, either. Rupert was Betserai's American pen pal and heard of Betserai's story and was extremely confused. He was taught that Zimbabwe was one of the poorer countries in the world, or at the least substantially poorer than the United States. Which statement best explains this phenomenon? A country's wealth is based on the amount of money in circulation. Zimbabwe was in the midst of an incredible economic boom, substantially increasing the wealth of all its citizens. Rapid rises in price levels made the Zimbabwean dollar near worthless in terms of purchasing power. All of these statements could explain what happened in Zimbabwe in 2008.
Rapid rises in price levels made the Zimbabwean dollar near worthless in terms of purchasing power.
Classify each scenario according to whether the change in quantity is caused by a shift in the supply curve or movement along the supply curve. Shift of the supply curve Movement along the supply curve After discovering that flash steaming tuna ..... at all major grocers. Amplitude decides to join the smartphone market. Americans sell their ... rising prices A national consumer products .... lower soap prices. Rising wages .... moving to Toronto.
Shift of the supply curve: After discovering that flash steaming tuna ..... at all major grocers. Amplitude decides to join the smartphone market. Movement along the supply curve: Americans sell their ... rising prices A national consumer products .... lower soap prices. Rising wages .... moving to Toronto.
Below is a table of mortality rates, expressed as the number of children per thousand live births that die yearly, for children in various countries, along with the country's GDP per capita, an economic measure of the relative standard of living in 2005. Country Mortality rate per 1000 live births annually Average annual GDP per capita ($) Sierra Leone 283 600 Nigeria 198 1,000 Zambia 182 900 Ghana 95 2,300 China 37 5,600 Brazil 35 8,100 United States 8 40,100 Korea 5 19,200 Singapore 3 27,800 Based on this information, what conclusion can be made? Sierra Leone has the highest child survival rate. Healthcare is the only thing that improves as economic growth occurs. Economic growth affects only the richest countries. The wealthiest countries have the lowest mortality rates.
The wealthiest countries have the lowest mortality rates.
The day-to-day living conditions of modern Americans are very different from what they were in the 20th century. While doing research for an economics project, Charlie discovers that more households today, as compared to households 100 years ago, have electricity, air conditioning, and a car. Which of the following explains why modern Americans enjoy a higher standard of living than Americans 100 years ago? Market failures are nonexistent. There has been economic growth in our society. The invisible hand has guided all nations around the world to this prosperity. Americans have prospered and earned more money due to a complete lack of recessions. In which field do researchers focus on investigating the phenomena described? Business Political Science Sociology Economics
There has been economic growth in our society. Economics
Which is an issue that makes central banking difficult for the Federal Reserve Bank (the Fed)? The Fed does not control the money supply, so it is hapless in the face of Congress, who does control the money supply. So even when the Fed has many ideas for the betterment of the economy, Congress sometimes makes bad economic decisions. There is a lag between when policies are enacted and when the effects of those policies can be seen. Because inflation is unacceptable due to the increased price levels throughout the economy, the Fed can only lower the money supply, not raise it. All of these make central banking difficult. Central banking is a relatively easy task, so none of these make it difficult.
There is a lag between when policies are enacted and when the effects of those policies can be seen.
If the price of basketballs goes up from $7.99 to $14.99, what can be expected from suppliers of basketballs as a result? The quantity supplied will not change. There will be a decrease in quantity supplied. There will be an increase in supply. There will be an increase in quantity supplied.
There will be an increase in quantity supplied
Question 18 of 19 My Attempt The country of Sabora currently bans all international trade. Sabora makes high-quality spears and is currently producing as many spears as the local population wishes to buy at $50 each. Other countries currently produce and sell spears at $125 each. The newly elected president of Sabora decides to allow international trade for the first time in Sabora's existence. They will begin trade next year. Saboran spear-makers will happily engage in trade. Assume there is free trade, and that Sabora will sell all the spears they make. Note that not all statements will be used. What will happen to the quantity and price of Sabora's spears next year? When international trade is allowed, there will be a larger population and market that desires Sabora's spears. As a result, Sabora's spear income will increase.
There will be movement along Sabora's supply curve. A greater quantity of Sabora's spears are supplied at a higher price Will increases
Please label the statements as true or false regarding economic booms and busts. With enough careful planning, fiscal and monetary policy can prevent recessions. Had the U.S. government used fiscal and monetary policy more effectively, many economists believe that the Great Depression would not have been as severe. At the time of the Great Depression, fiscal and monetary policy were not well understood. Booms and busts are natural responses to ever‐changing economic conditions.
With enough careful planning, fiscal and monetary policy can prevent recessions. (False) Had the U.S. government used fiscal and monetary policy more effectively, many economists believe that the Great Depression would not have been as severe. (True) At the time of the Great Depression, fiscal and monetary policy were not well understood. (True) Booms and busts are natural responses to ever‐changing economic conditions.(True)
Question 8 of 19 My Attempt Andrew, a college student, loves drinking coffee late at night to study for exams. Having no income, he is used to buying cheap, bad-tasting coffee, such as Beanlightened, that he needs to grind and brew himself. The coffee tastes putrid but, with enough cream and sugar, Andrew is able to tolerate it. Occasionally, he does go out to Starbucks when he has spare money. After graduation, Andrew gets a job working at a database firm as a programmer. His income is now a healthy $75,000 a year, and he decides he has had enough bad-tasting coffee. He ends up buying coffee daily from Starbucks, even though it costs significantly more than Beanlightened. Andrew's demand for Starbucks coffee changed as a result of a change in technology. a change in income. a change in the number of consumers. a change in expectations. a change in a related good or service. Beanlightened coffee is for Andrew a(n) In economic terms, Starbucks coffee is for Andrew a(n)
a change in income. Normal good/ Inferior good
When four roommates agree to specialize in the chores they are most efficient at, this can lead to: a situation in which less time is spent on chores by every roommate. some roommates doing many more chores than others. one roommate who is most efficient doing all of the chores. no chores getting done at all.
a situation in which less time is spent on chores by every roommate.
Suppose the market for t-shirts has three sellers: Martin, whose willingness to sell is $6, Adam, whose willingness to sell is $10, and Clara, whose willingness to sell is $12. If t-shirts sell for $11 each, then producer surplus in this market is: a) $6 b) $14 c) $0 d) $8
a) $6
Assuming everything else stays the same, an increase in the price of laptop computers will __________ of laptop computers. a) decrease the quantity demanded b) increase the demand c) increase the quantity demanded d) decrease the demand
a) decrease the quantity demanded
What is inflation? a decrease in the overall price level an increase in the amount of money in circulation an increase in the overall price level an increase in the overall level of economic activity Which of the examples provides the best evidence that inflation has occurred? A person whose salary has decreased is able to purchase more goods and services. A person whose salary has decreased is able to purchase fewer goods and services. A person whose salary has remained the same is able to purchase more goods and services. A person whose salary has increased is able to purchase fewer goods and services. A person whose salary has increased is able to purchase more goods and services.
an increase in the overall price level A person whose salary has increased is able to purchase fewer goods and services.
The supply curve is upward-sloping because higher prices ________. are needed to cover higher marginal costs are needed to reflect higher marginal utility encourage customers to switch to substitute goods make customers willing to pay more for a good
are needed to cover higher marginal costs
Currently, the market for pizza pies in your neighborhood is at equilibrium. If a large number of people move into the area, we would expect the market price of pizza to: a) decrease b) increase c) remain unchanged
b) increase
Which of the following situations represents an economic problem? a) A student trying to decide how to spend his weekly allowance. b) A country choosing to sacrifice some privacy in order to gain more security. c) Neither situation is an example of an economic problem. d) Both situations are examples of an economic problem.
d) Both situations are examples of an economic problem.
If cream cheese and bagels are complements, then an increase in the price of cream cheese will __________ the demand for bagels. a) increase b) not change c) increase or decrease d) decrease
d) decrease
Assume the market for DVD movies is initially at equilibrium. A decrease in the price of streamed movies, a substitute for DVD movies, will __________ the equilibrium price and ___________ the equilibrium quantity of DVD movies. a) increase; increase b) increase; decrease c) decrease; increase d) decrease; decrease
d) decrease; decrease
Suppose you and your roommate have the following agreement when it comes to cleaning your apartment: each person washes her or his own dishes after each meal. The principle of trade you just learned tells you that it would be more efficient if: a) both of you wash your own dishes after each meal. b) neither of you wash the dishes after eating. c) each of you wash half of all the dirty dishes. d) one of you wash all the dishes while the other does a different chore.
d) one of you wash all the dishes while the other does a different chore.
Tyrone has three options on how to spend his Saturday afternoon: to go out with friends, watch a movie, or wash his car. Tyrone's opportunity cost of washing his car would be: a) the value of going out with friends. b) the value of watching a movie. c) the value of going out with friends AND watching a movie. d) the value of going out with friends OR watching a movie.
d) the value of going out with friends OR watching a movie.
College students often buy cheap pizza because it is more affordable. Suppose after graduating, college students find high-paying jobs. The demand for cheap pizza will likely: decrease because demand for cheap pizza is negatively related to income. decrease because demand for cheap pizza is positively related to income. increase because demand for cheap pizza is negatively related to income. increase because demand for cheap pizza is positively related to income.
decrease because demand for cheap pizza is negatively related to income.
Which of the following are macroeconomists most interested in encouraging in order to increase the standard of living? inflations/trade-offs/ideas.
ideas
The demand curve determines equilibrium price in a market. is a graphical representation of the relationship between price and quantity demanded. depicts the relationship between production costs and output. is a graphical representation of the relationship between price and quantity supplied.
is a graphical representation of the relationship between price and quantity demanded.
You see a large group of stranded passengers standing next to a disabled bus, and you have only three seats in your car. You have to decide which three passengers to rescue because of: macroeconomics. efficiency. scarcity. trade.
scarcity
The demand schedule for chicken feet, a dim sum delicacy served at some Chinese restaurants, is shown in the table. Although some people find the texture strange, others have developed a taste for it. Price of chicken feet (per pound)/Quantity of chicken feet demanded (millions of pounds) in 2008/ Quantity of chicken feet demanded (millions of pounds) in 2018 $ 3.00 3.0 9.2 $ 2.50 3.2 9.9 $ 1.25 3.6 10.3 $ 1.00 4.1 12.2 $ 0.50 5.7 15.0 How many more chicken feet were demanded in 2018 , at a price of $1.25 a pound, than in 2008 ? million pounds Based on the demand schedule, you conclude there was movement along the demand curve to the left. there was movement along the demand curve to the right. the demand curve shifted to the left. the demand curve shifted to the right.
6.7 the demand curve shifted to the right.
Carolina is trying to sell her car, and the lowest amount she is willing to accept is $2,000. Abdul is interested in buying the car, and although he is willing to pay $2,500, he negotiates a price of $2,100. How much consumer surplus does Abdul attain, and what is the total surplus? Consumer surplus = $100; Total surplus = $2,100 Consumer surplus = $400; Total surplus = $500 Consumer surplus = $100; Total surplus = $500 Consumer surplus = $400; Total surplus = $2,100
Consumer surplus = $400; Total surplus = $500
Which of the items is most likely to be a complement to coffee? tea baked beans creamer decaf coffee Assume that a monsoon destroys the coffee crop in Vietnam, one of the world's largest coffee producers. What will likely occur? The price of sugar and creamer will increase. There will be no change in the market for coffee. People will consume more coffee. Consumers will try to find alternatives to coffee due to increases in the price of coffee.
Creamer Consumers will try to find alternatives to coffee due to increases in the price of coffee
Sam's willingness to pay for a pizza is $15. If the price of pizza is $10, Sam's consumer surplus after buying the pizza is: a) $15 b) $0 c) $5 d) $20
c) $5
A shortage in the market for economics textbooks will ___________ the price of textbooks. a) decrease b) initially not change but then decrease c) increase d) not change
c) increase
Lisa is choosing between three alternatives: a) working at her job that pays 60 dollars; b) writing a term paper which she values at 40 dollars; or c) going out with a friend, which she values at 80 dollars. The opportunity cost of writing the term paper is: 140 dollars. 20 dollars. 80 dollars. 0 dollars.
80 dollars.
My Attempt Grapes are used as an input in the production of wine, and wine and red meat are complements. A decrease in the price of grapes will _________ the total surplus in the market for red meat. not change decrease increase
increase
Consumer surplus is equal to the difference between the minimum price a seller is willing to accept and the market price. the minimum price a buyer is willing to pay and the market price. the maximum price a buyer is willing to pay and the market price. the maximum price a seller is willing to accept and the market price. Consumer surplus is shown graphically as the area above the supply curve and below the market price. under the demand curve and above the market price. under the demand curve and below the market price. above the supply curve and above the market price.
the maximum price a buyer is willing to pay and the market price. under the demand curve and above the market price.
Question 19 of 19 My Attempt Determine how each scenario will impact either supply or demand in the given market. The price of goose feathers, an input for pillows, increases sharply. In the market for pillows, the supply curve changes. Researchers develop a higher-yielding, insect-repellant strain of rice. In the market for rice, the supply curve changes. During the Great Recession, the average income for an American worker fell sharply. During that time, families began preparing more of their own meals. In the market for meals from restaurants, the demand curve changes. Spam unveils a new flavor, barbeque, which has students intrigued. The students transition from buying ham to Spam. In the market for Spam, the demand curve changes. iDecide, a consulting firm, joins the market for accounting. In the market for accounting services, the supply curve changes.
the supply curve changes. the supply curve changes. the demand curve changes. the demand curve changes the supply curve changes..
The price of gasoline is $2.50 per gallon at the closest gas station but is only $2.30 per gallon at a gas station two miles away. By driving to the farther gas station, the opportunity cost is: non-existent because gas is cheaper at the farther station. the cost of filling one's tank at the original price of $2.50 per gallon. the value of one's time and expenses to go to the farther gas station. $0.20 per gallon, the difference in price between the two gas stations.
the value of one's time and expenses to go to the farther gas station.
Many economists think that effective institutions are essential for economic growth. In this context, what are institutions? government agencies like the Food and Drug Administration (FDA) or the Environmental Protection Agency (EPA) mechanisms that allow for the use of fiscal and monetary policy the laws, social norms, and conventions of a culture prisons, jails, and psychiatric hospitals that are used to keep certain people isolated from the rest of the population long-standing companies that consumers can depend on for reliable service and products
the laws, social norms, and conventions of a culture
Your friend tells you the following: "The law of demand does not work ALL the time. For example, think about the demand for luxury cars (e.g., BMWs, Porshe, etc.). Demand for such cars increases when the price of the car increases." Your friend is: correct; luxury cars give people a higher status. correct; luxury cars are superior goods. wrong; aggregate demand is not the same as regular demand. wrong; demand is not the same as quantity demanded.
wrong; demand is not the same as quantity demanded.
Suppose you search for a used bicycle online, and are willing to pay at most $100. However, you successfully find one for sale priced at $80. What is the value of consumer surplus? $180 $80 $20 $100
$20
If Avery is willing to pay $10 for a pizza, Pia is willing to pay $13, and Sylvio is willing to pay $15, how much consumer surplus is achieved when the price of pizza is $12? $6 $2 $10 $4
$4
Which of the following is most likely to shift the supply curve for pet grooming services leftward? A decrease in the number of owners taking their pets to be groomed. An increase in the cost of pet grooming supplies. An increase in the number of pet groomers seeking employment. A rise in the price of pet grooming services.
An increase in the cost of pet grooming supplies.
What is the main problem addressed with scarcity? Making sure that critical resources such as oil and forests are not depleted. Ensuring that an adequate standard of living is achieved. Determining how to address unlimited wants with limited resources. Trying to satisfy the basic needs of everyone to eliminate poverty.
Determining how to address unlimited wants with limited resources.
Which of the following factors would most likely cause a shift in the demand curve for candles? An increase in the price of wax used to make candles. A decrease in the number of factories making candles. Falling incomes, due to a weakening economy. Improved technology that makes candles less costly to produce.
Falling incomes, due to a weakening economy.
If more states legalize recreational marijuana, what is the likely effect on the supply of marijuana? It would decrease as the risk of prosecution rises. It would not change. It would increase because prices will rise. It would increase as the risk of prosecution falls.
It would increase as the risk of prosecution falls.
If the price of copper rises, which of the following may occur? Thefts of copper wire decline. The government increases the copper content of pennies. The profits of copper producers increase. The quantity of copper supplied falls.
The profits of copper producers increase.
If the government offers a tax deduction to companies producing solar panels, what will happen in the market for solar panels? The supply curve will shift to the left, decreasing supply. The supply curve will shift to the right, decreasing supply. The supply curve will shift to the left, increasing supply. The supply curve will shift to the right, increasing supply.
The supply curve will shift to the right, increasing supply.
Suppose the hot dog market is made up of three buyers: Ana, who is willing to pay $10 for a hot dog, William, who is willing to pay $8, and Mara, who is willing to pay $6. If hot dogs sell for $7, then consumer surplus in this market would be: a) $3 b) $0 c) $5 d) $4
d) $4