macroeconomics quiz 2

According to the graph, what is the reduction in U.S. lumber consumption as a result of the tariff?

100,000

Using information in the previous table, what is country A's opportunity cost of producing 1 unit of clothing?

2 units of food

According to the graph, what quantity of domestic lumber will be supplied after a tariff of $0.50 per board foot is imposed?

900,000 board feet

Which of the following is not true?

Economic agents that evaluate more data are more successful at optimizing.

If a country has a comparative advantage in the production of a good, then that country:

Has a lower opportunity cost in the production of that good

marginal analysis

a cost-benefit calculation that focuses on marginal levels of feasible alternatives.

A tariff is

a tax on imported goods

The ability of an individual, firm, or country to produce more of a good or service than competitors using the same amount of resources is known as:

absolute advantage

According to the theory of comparative advantage, specialization and free trade will benefit:

all trading partners who specialize in goods where they have comparative advantage

Ms. Boulware is the best lawyer and the best secretary in town. She has:

an absolute advantage in both jobs

What do economists call the study of situations in which people act in ways that do not appear to be economically rational?

behavioral economics

An optimizer maximizes total net benefit when:

choosing more of one good and less of another no longer increases net benefit.

Steve is a US citizen who is currently working in the United Kingdom. In the official international trade accounts, he is considered a________________.

citizen of the US and domestic resident of a foreign country

When we evaluate outcomes both before and after a change in some variable it is known as:

comparative statics

Countries gain from specializing in producing goods in which they have a(n) __________ advantage and trading for goods in which other countries have a(n) __________ advantage.

comparative,comparative

Comparative statics is:

comparing outcomes before and after a change in some variable.

In the graphs shown, which country has a comparative advantage in the production of shirts?

country b

The part of the balance of payments that records a country's exports and imports of goods and services is __________.

current account

If the sum of net exports, net income received from abroad, and net transfer payments from abroad yields a negative number, we say that a country's

current account is in deficit

Investment A has a cost of $500, and a benefit of $1000; Investment B has cost of $200, and a benefit of $400. If a change is made from Investment A to Investment B, then the net benefit:

decreases by $300.

When you optimize in __________ you evaluate the change in utility that would result from selecting one option over another option.

differnces

The balance of trade is

equal to the difference between exports of goods and imports of goods

One of the first steps in deciding whether to complete your education is to:

evaluate the marginal cost and marginal benefit of that decision.

Goods and services produced domestically but sold to other countries are called

exports

When a firm buys or builds facilities in a foreign country it is known as:

foreign direct investment

One topic of behavioral economics is:

identifying particular situations in which agents fail to optimize.

A product produced in a foreign country and purchased by residents of the home country is called:

import

The goal of an optimizer is to select the option that:

is to make them as well off as possible

When you select the option that generates the highest total benefit you are optimizing in:

levels

The two methods of optimizing presented in the chapter are optimization in __________ and __________.

levels, differnces

Decision analysis that involves comparing marginal costs and marginal benefits to determine the best course of action is known as:

marginal analysis

A cost-benefit calculation that focuses on the difference between a feasible alternative and the next feasible alternative is called __________.

marginal anaylsis

An example of before and after comparisons is:

measuring spending of a family after an increase in income.

If the marginal mortgage cost of moving from house A to house B is $-600 and marginal commuting cost of moving is $400, then:

moving will save $600 in rent and $400 in commuting.

Which step is not present in optimization of levels:

multiply the costs and the benefits to eliminate overlapping costs and benefits.

Total benefit falls when marginal benefit is __________ and benefit is maximized when marginal benefit is __________.

negative; zero

The advice an economist gives people how to better optimize is tantamount to:

normative analysis

Nearly all economies of the world are:

open economies

What is the name given to the highest-valued alternative that must be given up to engage in any activity?

opportunity cost

The best feasible choice is called

optimum

The best feasible choice that a person can make is known as the __________ choice.

optimum

When nations specialize in their comparative advantage and engage in trade:

overall standards of living inceases

Prices in the marketplace:

provide incentives to allocate resources.

Multinational corporations expanding into foreign markets often

provide thousands of jobs for foreign nations

capital accounts

records minor transactions such as migrants transfers

current acounts

represents short-term flows of funds into and out of a country

Optimizing is

selecting the feasible option that maximizes benefit, given available information.

A country imported goods and services worth $24 billion and exported goods and services worth $32 billion during a particular year. The country's trade______equals__________.

surplus, 8 billion

In the balance of payments, the difference between the value of the goods a country exports and the value of goods a country imports is called the:

trade balance

The complexity of optimizing centers around:

trade-offs

You and your neighbor pick apples and cherries. If you can pick apples at a lower opportunity cost than your neighbor can, which of the following is true?

you have a comparative advantage in picking apples