eco-210 macroeconomics

A choice made by comparing all relevant alternatives systematically and incrementally is A. a sunk cost. B. an opportunity cost. C. a choice on the margin. D. a benefit. E. a choice made in the social interest.

a choice on the margin.

Which of the following increases the quantity supplied of yoga pants but does NOT increase the supply of yoga​ pants? A. an increase in the price of yoga pants B. a decrease in the number of suppliers of yoga pants C. new technology that lowers the cost of producing yoga pants D. a decrease in the price of yoga pants E. an increase in the price of the resources used to produce yoga pants

an increase in the price of yoga pants

As the circular flow model​ shows, the factors of production flow from A. firms to households through the goods market. B. households to firms through the factor market. C. firms to households through the factor market. D. the goods market through firms to the factor markets. E. households to firms through the goods market.

households to firms through the factor market.

When Fresh Express Salads decides to mechanically pick all of its​ lettuce, it directly answers the​ ________ question. A. how B. where C. when D. for whom E. what

how

As a factor of​ production, oil reserves are counted as A. financial capital. B. capital. C. labor. D. land. E. entrepreneurship.

land.

In the circular flow​ model, which of the following owns the factors of​ production? A. ​firms, households, and all levels of government B. only firms C. both firms and households D. only households E. only​ federal, state, and local governments

only households

The figure shows the production possibility frontier for an economy. The point or points that are attainable and production efficient are A. points B and C. B. points A and D. C. point E. D. points A​, ​B, C​, and D. E. points ​A, B​, and C.

points ​A, B​, and C.

The opportunity cost of a good increases as more of it is produced because A. the number of forgone alternatives also increases. B. people want the good less as more is produced. C. there is no such thing as a free lunch. D. resources are not equally productive in all activities. E. producing more of a good requires additional resources.

resources are not equally productive in all activities.

Moving along the production possibilities frontier itself illustrates A. the existence of tradeoffs. B. how tradeoffs need not occur if the economy is efficient. C. how free lunches can be exploited through trade. D. the existence of unemployment of some factors of production. E. the benefits of free lunches.

the existence of tradeoffs.

The​ "law of​ demand" indicates that if the University of Maine increases​ tuition, all other things remaining the same A. the quantity of classes demanded will decrease at the University of Maine. B. the quantity of classes demanded will increase at the University of Maine. C. both the demand for and the quantity of classes demanded will decrease at the University of Maine. D. the demand for classes will increase at the University of Maine. E. the demand for classes will decrease at the University of Maine.

the quantity of classes demanded will decrease at the University of Maine.

Correlation means A. a natural experiment has been conducted. B. ​"after this, therefore because of​ this." C. other things remaining the same. D. the tendency for the values of two variables to move in a predictable and related way. E. ​"on the​ margin."

the tendency for the values of two variables to move in a predictable and related way.

Opportunity cost is best defined as A. the sunk cost of any decision. B. the value of the highest−valued alternative that is forgone in making a choice. C. how much money and time it takes to consume something. D. the total of all other alternatives that are forgone in making a choice. E. how much money is paid for something.

the value of the highest−valued alternative that is forgone in making a choice.

On a production possibilities​ frontier, 500 pounds of apples and​ 1,200 pounds of bananas can be produced while at another point on the same​ frontier, 300 pounds of apples and​ 1,300 pounds of bananas can be produced. Between these​ points, what is the opportunity cost of producing a pound of​ apples? A. ​5/12 of a banana B. 100 pounds of bananas C. 2 pounds of bananas D. 0.5 a pound of bananas E. 2 pounds of apples

0.5 a pound of bananas

Deb and Pete have volunteered to help their favorite charity mail out fundraiser information. The figure shows their production possibilities frontiers for assembling packets and stuffing envelopes. If Deb and Pete specialize and​ trade, how many packets will be​ assembled? A. 40 B. 80 C. more than 80 and less than 160 D. 160 E. more than 40 and less than 80

160

Consumers eat salsa with taco chips. The price of salsa rises. How does the increase in the price of salsa affect the demand for taco​ chips? A. It decreases the demand for taco chips. B. It has no effect on the demand for taco chips. C. It increases the demand for taco chips. D. It will decrease the demand for taco chips only if taco chips are a normal good. E. It could​ increase, decrease, or have no effect on the demand for taco​ chips, but more information is needed to determine the impact.

A. It decreases the demand for taco chips.

The marginal benefit of an activity is i. the benefit from a one−unit increase in the activity ii. the benefit of a​ small, unimportant activity. iii. measured by what the person is willing to give up to get one additional unit of the activity. A. i and iii B. ii and iii C. ii only D. iii only E. i only

A. i and iii

The figure shows the market for pizza. The market is in equilibrium when the wages paid pizza workers increases. What point represents the most likely new price and​ quantity? A. A B. B C. C D. D E. E

B

An increase in the number of pineapple growers results in A. an increase in the quantity of pineapples supplied and no shift in the supply curve of pineapples. B. an increase in the supply of pineapples and a rightward shift in the supply curve of pineapples. C. no change in the supply of pineapples and a movement along the supply curve of pineapples. D. an increase in the supply of pineapples and a leftward shift in the supply curve of pineapples. E. None of the above answers is correct.

B. an increase in the supply of pineapples and a rightward shift in the supply curve of pineapples.

The production possibilities frontier illustrates the A. amount of each good that people want to buy. B. maximum combinations of goods and services that can be produced. This is the correct answer. C. resources the economy​ possess, but not its level of technology. D. limits to​ people's wants. E. goods and services that people want.

B. maximum combinations of goods and services that can be produced.

​Entrepreneurship, as a factor of​ production, refers to A. the human capital accumulated by workers. B. the human resource that organizes​ labor, land, and capital. C. the capital the firm uses. D. the value of the​ firm's stock. E. the technology used by firms.

B. the human resource that organizes​ labor, land, and capital.

The price of cotton clothing falls. As a​ result, A. the quantity demanded of cotton clothing decreases. B. the quantity demanded of cotton clothing increases. C. the demand for cotton clothing increases. D. the demand for cotton clothing decreases. E. both the demand for cotton clothing increases and the quantity demand of cotton clothing increases.

B. the quantity demanded of cotton clothing increases.

Ali decides to attend the one−hour review session for microeconomics instead of working at his job. His job pays him​ $10 per hour.​ Ali's opportunity cost of attending the review session is A. ​nothing, because the review session does not cost anything. B. the​ $10 he could have earned at his job. C. the one−hour review session. D. the value of the session minus the​ $10 he could have earned at his job. E. equal to the benefit he gets from the review session.

B. the​ $10 he could have earned at his job.

Consider the market for frozen yogurt. Assume the market starts at point A. An increase in income causes a movement to point A. D because the price of resources used to make frozen yogurt will increase. B. B because the price of resources used to make frozen yogurt will decrease. C. D if frozen yogurt is a normal good. D. B if frozen yogurt is a normal good. E. C because the price of resources used to make frozen yogurt will increase.

C. D if frozen yogurt is a normal good.

Which of the following would most likely cause a​ country's production possibilities set to shift outward at every point along the​ frontier? A. a decrease in unemployment B. a decrease in idle capital C. a general technological advance that affects all sectors of the economy D. a technological advance in only one sector of the economy E. none of the above

C. a general technological advance that affects all sectors of the economy

When all of the available factors of production are being efficiently​ employed, the A. PPF disappears. B. opportunity cost of changing production is infinite. C. economy is producing at a point on its PPF. D. economy is producing at a point beyond its PPF. E. economy is producing at a point within its PPF.

C. economy is producing at a point on its PPF.

What typically happens to benefits as the amount of an activity is​ increased? A. Marginal benefit remains constant. B. Total benefits remain constant. C. The marginal benefit changes only if the marginal cost changes. D. Marginal benefit decreases.

D. Marginal benefit decreases.

Of the​ following, the largest single component of U.S. federal government expenditures is spent on A. transfers to state and local governments. B. purchases of goods and services for purposes other than national defense. C. national defense. D. Medicare and Medicaid. E. interest paid on the national debt.

D. Medicare and Medicaid.

In the circular flow model with the government​ sector, transfers A. flow only through the goods market. B. to households flow in the same direction as do expenditures on goods and services. C. to firms flow in the same direction as do​ rent, wages,​ interest, and profits. D. flow in the opposite direction as do taxes. E. flow in the same direction as do taxes.

D. flow in the opposite direction as do taxes.

Jan is attending college and studying to be an investment broker. To improve her chances of employment following​ college, she has interned at a top brokerage firm during the last two summers.​ Jan's internship has increased her A. consumption services. B. entrepreneurship capital. C. natural labor. D. human capital. E. natural resources.

D. human capital.

In the circular flow​ model, which of the following is on the buying side in the goods​ market? i. firms ii. households iii.​ federal, state, and local governments A. i only. B. i and ii. C. ii only. D. ii and iii. E. iii only.

D. ii and iii.

Suppose improvements in technology cause the supply of natural gas to increase and at the same time the demand for natural gas increases. What are we sure​ of? A. Equilibrium price increases. B. Equilibrium price decreases. C. Equilibrium quantity decreases. D. Both equilibrium price and quantity increase. E. Equilibrium quantity increases.

Equilibrium quantity increases.

Which of the following is a normative​ statement? A. An increase in the supply of computers has caused computer prices to fall. B. Hurricanes strike mainly Florida and North Carolina. C. Recessions lead to increases in the unemployment rate. D. When the price of kiwi fruit​ increases, fewer people eat kiwi fruit. E. Flood victims should pay for their own rebuilding.

Flood victims should pay for their own rebuilding.

Which of the following is a positive​ statement? A. Everyone should have some knowledge of economics. B. Taxes on gasoline should be lower so that gasoline is more affordable to the poor. C. If we reduce welfare payments given to the​ poor, they will find jobs. D. The rich should pay more in taxes. E. social Security must be reformed.

If we reduce welfare payments given to the​ poor, they will find jobs.

If John can produce 10 chairs or 20 lamps during a week while Mary can produce 12 chairs or 22 lamps in the same​ time, who has the absolute advantage in producing each​ good? A. Mary in producing​ chairs, John in producing lamps B. John in producing​ chairs, Mary in producing lamps C. John in producing both goods D. Mary in producing both goods E. Both Mary and John in both goods

Mary in producing both goods

Suppose India and France start off on PPF0​, but at different production​ points, shown in the figure. Based on their current production​ points, relative to​ India, which is​ France's most likely future PPF​? A. PPF1 with India on PPF2. B. PPF1 with India on PPF0. C. PPF2 with India on PPF1. D. PPF2 with India on PPF0. E. None of the above because France and India will always end up on the same PPF.

PPF1 with India on PPF2.

Scott and Cindy both produce only pizza and tacos. In one​ hour, Scott can produce 20 pizzas or 40 tacos. In one​ hour, Cindy can produce 30 pizzas or 40 tacos. Based on these​ data, A. Cindy has a comparative advantage at producing tacos. B. Scott has a comparative advantage at producing tacos. C. Cindy and Scott have the same comparative advantage in producing tacos. D. neither Cindy nor Scott has a comparative advantage in producing tacos. E. Cindy and Scott have the same comparative advantage in producing pizzas.

Scott has a comparative advantage at producing tacos.

In a​ recession, consumers have less income to spend. As a​ result, if dining out is a normal​ good, then which of the following would happen to the demand curve for dining​ out? A. The demand curve would shift leftward. B. The effect on the demand curve is unknown. C. The demand curve would not shift but the price of dining out would rise. D. The demand curve would not shift but the price of dining out would fall. E. The demand curve would shift rightward.

The demand curve would shift leftward.

For​ consumers, taco chips and salsa are complements. If the price of salsa​ rises, what is the effect on the equilibrium price and quantity of taco​ chips? A. The equilibrium price of taco chips could​ rise, fall, or stay the same and the equilibrium quantity increases. B. There is no change in the equilibrium price of taco chips and the equilibrium quantity increases. C. The equilibrium price of taco chips falls and the equilibrium quantity decreases. D. The equilibrium price of taco chips rises and the equilibrium quantity increases. E. The equilibrium price of taco chips rises and the equilibrium quantity decreases.

The equilibrium price of taco chips falls and the equilibrium quantity decreases.

Pizza and tacos are​ substitutes, and the price of a pizza increases. Which of the following correctly indicates what​ happens? A. The quantity of tacos demanded increases and the quantity of pizza demanded decreases. B. The quantity of pizza demanded decreases and the demand for tacos increases. C. The demand for each decreases because both are normal goods. D. The demand for pizzas decreases and the demand for tacos increases. E. The demand for both goods decreases.

The quantity of pizza demanded decreases and the demand for tacos increases.

A decrease in the price of a complement in production leads to A. no change in the supply of the good in question. B. a decrease in the quantity supplied of the good in question. C. an increase in the supply of the good in question. D. a decrease in the supply of the good in question. E. an increase in the supply of the good in question and a decrease in the quantity supplied of the good in question.

a decrease in the supply of the good in question.

Which factor of production is paid​ "interest"? A. capital B. land C. labor D. entrepreneurship E. human capital

capital

In order to make a rational​ choice, people must A. be able to afford the choice decided upon. B. compare marginal costs and marginal benefits. C. only know what they want. D. decide quickly without wasting time. E. determine what is in the social interest.

compare marginal costs and marginal benefits.

The decisions of firms and households are A. coordinated by but not totally controlled by the government. B. made independently of one another. C. unexplainable by the circular flow model. D. controlled by but not totally coordinated by the government. E. coordinated by markets.

coordinated by markets.

The study of economics is best described as a study of A. coping with​ scarcity, and choices made as a result of scarcity in a society. B. how people earn a living. C. the factors that influence the stock and bond markets. D. the choices made in producing goods and services. E. capitalism.

coping with​ scarcity, and choices made as a result of scarcity in a society.

The primary focus of microeconomics is A. to examine the operation of the entire​ (aggregate) economy. B. our​ government's monetary policy. C. the levels of employment and inflation. D. to study how we managed to eliminate scarcity. E. to examine the behavior and operation of the individual units or sectors that make up the economy.

to examine the behavior and operation of the individual units or sectors that make up the economy.

The question​ "Should we produce LCD televisions or computer​ monitors?" is an example of a​ ________ question. A. why B. for whom C. how D. what E. where

what

Scott and Cindy both produce only pizza and tacos. In one​ hour, Scott can produce 20 pizzas or 40 tacos. In one​ hour, Cindy can produce 30 pizzas or 40 tacos.​ Scott's opportunity cost of producing 1 taco is A. 2 tacos. B. ​1/2 of a pizza. C. 1 pizza. D. 20 pizzas. E. 2 pizzas.

​1/2 of a pizza.

The figure shows the production possibilities frontier for a country. The opportunity cost of a gallon of milk between combination point A and B is A. ​1/3 of a gallon of ice cream for a gallon of milk. B. 1 gallon of ice cream for a gallon of milk. C. zero because at point A zero milk is being produced. D. 4 gallons of ice cream for a gallon of milk. E. 3 gallons of ice cream for a gallon of milk.

​1/3 of a gallon of ice cream for a gallon of milk.

In the circular flow​ model, rent,​ wages, interest, and profit paid flow from​ ________ through​ ________ to​ ________. A. ​firms; factor​ markets; households B. ​firms; goods​ markets; households C. ​households; factor​ markets; firms D. ​households; goods​ markets; firms as payment for goods E. ​firms; goods​ market; firms

​firms; factor​ markets; households

Suppose that the price of flour used to produce bagels increases. Hence the equilibrium price of a bagel​ ________ and the equilibrium quantity​ ________. A. does not​ change; does not change B. ​falls; decreases C. ​rises; decreases D. ​rises; increases E. ​falls; increases

​rises; decreases