Macroeconomics Chapter 1

increased consumer spending causes the rate of inflation to rise

Macroeconomics

optimism about future Carr sales leads General Motors to hire more auto workers

Microeconomics

robotic technology reduces the demand for auto workers

Microeconomics

on Black Friday, there are huge sales for electronics at many retail stores.david must decide between buying a camera at one store or a flat screen tv at another store, and buying one means losing out on the ability to purchase the other.

Opportunity cost

which statement describes the equity-efficiency trade-off?

actions intended to make economic outcomes fairer may cause efficiency to decrease

which demonstrates a scenario with no opportunity cost?

all of these scenarios have an opportunity cost

suppose the school sells all of its vaccines at the market price of $20. What has it managed to maximize?

efficiency

during the summer, a bumper crop of oranges in Florida causes a surplus in the supply of oranges nationwide. As a result. prices fall to compensate for the surplus and consumers enjoy the fruits of the farmers labor

equilibrium

Suppose now that the school wishes to make sure no students with diabetes or asthma go without the drug because they cannot afford it. Because it does not know the budget of each student, the Health Center decides to offer vaccines free to students who can provide a doctor's note stating they have a pre‑existing condition. The school its now seeking a greater degree of

fairness

the local river has so much pollution that three-eyed fish are forming. The government responds by regulating the amount of chemicals that can be dumped into the river

government intervention

what does the term ceteris paribus mean in this context

holding all else equal (unchanged)

which scenario would least likely change an individuals behavior?

in an effort to make people eat healthier, the city of bakersville tells its residents to eat wheat bread instead of white bread

why, if at all, is the ceteris paribus condition important in economic analysis

it allows the analysis of how a single change affects an economic environment

Megan has a 1 hr gap in her course load for the fall semester. There are two courses available for her to take at that time: reading piano sheet music and beginning rock climbing. She does not have any experience with piano or rock climbing. In the end, she decides to enroll in the rock climbing course, despite her fear of heights. Identify which activity exhibits a potential trade-off with enrolling in rock climbing.

learning to read piano sheet music

as a result of a severe recession, the total output, or gross domestic product, of a nation falls by 4 percent

macroeconomics

increased consumer spending causes the national unemployment rate to fall

macroeconomics

an educational software company wants to expand the number of economics questions that if offers and is considering hiring another economist. the company compares how much adding another worker will improve the product to the additional cost

marginal decisions

the owner of a snow cone trailer realizes that the demand for snow cones is low during the winter, and closes the shop until the temperature warms back up near summertime

market efficiency

A tax on tires increases the price of tires paid by car owners

microeconomics

social welfare spending in Sweden occupies too large a portion of the national budget

normative economics

the richest 1% of Americans should pay more taxes than the rest of the 99%

normative economics

eliminating political conflict

not a primary macroeconomic policy goal

to calculate how much urban residents are willing to pay to protect biodiversity

not a primary macroeconomic policy goal

to sett the optimal price for a pound of peaches

not a primary macroeconomic policy goal

a decrease in the supply of coconut will increase the price of German chocolate cake, a good which requires coconut shavings as a key ingredient

positive economics

as minimum wages increases, the prices of all goods and services also tend to increase

positive economics

low inflation

primary macroeconomic policy goal

low unemployment

primary macroeconomic policy goal

rising living standards

primary macroeconomic policy goal

ava finds that there is not enough time after work to have dinner, exercise, and watch tv, and she must make choices about how to use her limited time

resource scarcity

people have limited resources

scarcity

at high-end restaurant, the restaurant owner has one chef at a meat station, one chef at a vegetable station, and one chef who has an artistic eye, plate the food she is given. The result is increased service speed, and the kitchen is able to serve more customers in an evening.

specialization

who will receive the vaccines of the university health center sells them for $20 market price?

the students who will pay $20 for them

everything you do requires giving up something

tradeoffs