ECON 202 Test 1 Study Guide

In a small economy, the money supply is $400,000, and the velocity of money is 3. The current average price level in the economy is 1. What is the level of real GDP in this economy? a) $1.2 million b) $1.6 million c) $400,000 d) $133,333

a) $1.2 million

https://docs.google.com/document/d/16AkpjoYcZUKoOFwg3nfNB4TuJiloxqPBKBBLRQyPjwI/edit Refer to the figure. If the price of bananas in the diagram is $6 a pound, what is the total producer surplus? a) $80,000 b) $120,000 c) $160,000 d) $240,000

a) $80,000

https://docs.google.com/document/d/16AkpjoYcZUKoOFwg3nfNB4TuJiloxqPBKBBLRQyPjwI/edit (Figure: Bananas) Refer to the figure. If the price of bananas is $2 a pound, how many pounds of bananas will suppliers supply? a) 0 b) 1 c) 10 d) 10,000

a) 0

The value of a car produced and sold in 2005 and sold again in 2011 is included in: a) 2005's GDP only. b) 2011's GDP only. c) both 2005's GDP and 2011's GDP. d) neither 2005's nor 2011's GDP.

a) 2005's GDP only.

https://docs.google.com/document/d/16AkpjoYcZUKoOFwg3nfNB4TuJiloxqPBKBBLRQyPjwI/edit (Figure: Labor Supply and Demand) Refer to the figure. How much will the quantity of labor employed decline as a result of the labor union's action to increase its wage demands to $11 an hour? a) 700 b) 1,100 c) 1,800 d) 2,700

a) 700

Which of the following choices correctly illustrates how changes in opportunity costs affect supply? a) A farmer produces corn and wheat. The price of wheat rises, so he shifts his resources toward wheat and the supply of wheat rises. b) A fisherman fishes for lobsters and oysters. The price of lobsters rises, so he decides to spend more of his time fishing for oysters because he can make the same amount of money with fewer lobsters. c) A textbook for economics becomes cheaper, so more students opt to buy that particular textbook. d) Milk and cereal are complementary goods, so when the price of cereal falls, the quantity supplied of milk rises.

a) A farmer produces corn and wheat. The price of wheat rises, so he shifts his resources toward wheat and the supply of wheat rises.

Which of the following is TRUE about demand curves? a) Demand curves are negatively sloped. b) Demand curves are U-shaped. c) Demand curves are positively sloped. d) Demand curves are vertical.

a) Demand curves are negatively sloped.

Suppose that Congress decided to exempt seniors from paying income tax on labor income. What would happen to the labor force participation rate for seniors? a) It would increase. b) It would decrease. c) It would remain the same. d) It is impossible to tell.

a) It would increase.

If you accept a job in Mexico after college, your income will be part of GDP in: a) Mexico only. b) the United States only. c) both Mexico and the United States. d) neither Mexico nor the United States.

a) Mexico only.

Most people do not buy the safest car they can find. Why not? a) Other factors matter besides safety, such as comfort, cost, and fuel economy. b) People do not take the time to understand the safety features of cars. c) Consumers are unaware of the risks of different cars. d) The statement is false. People do buy the safest car they can find.

a) Other factors matter besides safety, such as comfort, cost, and fuel economy.

Zoey receives a big raise at work and decides to buy additional porcelain figurines. Which of the following statements is TRUE? a) Zoey considers porcelain figurines to be a normal good. b) Zoey considers porcelain figurines to be an inferior good. c) Zoey's demand for porcelain figurines decreased. d) Zoey's willingness to pay for porcelain figures has decreased.

a) Zoey considers porcelain figurines to be a normal good.

A computer chip that you purchase to repair your home computer is an example of: a) a final good. b) an intermediate good. c) a service. d) an inferior good.

a) a final good.

The labor force participation rate of a country tends to be higher if the government: a) allows retirees to work and receive government pension without penalty. b) allows retirees to work only if they give up government pensions. c) allows retirees to work only when they pay higher income taxes than younger workers. d) does not allow retirees to work at all.

a) allows retirees to work and receive government pension without penalty.

For a normal good, higher income results in: a) an increase in demand. b) a decrease in demand. c) a movement up along the demand curve. d) a movement down along the demand curve.

a) an increase in demand.

In the past 100 years, there has been a decline in the use of unpaid child labor on family farms. Therefore: a) changes in GDP overstate the true increase in production over the past 100 years. b) changes in GDP understate the true increase in production over the past 100 years. c) there has been no change in GDP over the past 100 years. d) there has been no change in production over the past 100 years.

a) changes in GDP overstate the true increase in production over the past 100 years.

Economists believe people make decisions by: a) comparing marginal costs with marginal benefits. b) thinking about costs but not benefits. c) thinking about benefits but not costs. d) comparing total costs with total benefits.

a) comparing marginal costs with marginal benefits.

The largest spending component of GDP in the United States is: a) consumption. b) investment. c) government spending. d) net exports.

a) consumption.

Frictional unemployment is caused by: a) creative destruction. b) recessions. c) the transformation of the United States into a service economy. d) the changing seasons of the year.

a) creative destruction.

Which type of unemployment increased the most during the 2007-2009 recession? a) cyclical unemployment b) frictional unemployment c) structural unemployment d) search unemployment

a) cyclical unemployment

If the wage demands of workers are high relative to the prices of products,: a) cyclical unemployment will be higher. b) cyclical unemployment will be lower. c) frictional unemployment will be lower. d) structural unemployment will be higher.

a) cyclical unemployment will be higher.

The natural unemployment rate consists of: a) frictional and structural unemployment. b) frictional and cyclical unemployment. c) structural and cyclical unemployment. d) frictional, cyclical, and structural unemployment.

a) frictional and structural unemployment.

Several years ago, the rising popularity of Barnes & Noble and Borders shifted workers from independent bookshops to larger chains. What type of unemployment was associated with this reallocation of the work force? a) frictional unemployment b) technological substitution c) creative destruction d) structural unemployment

a) frictional unemployment

Someone who recently moved to Florida because of its warmer climate will need to spend some time looking for a new job. This is an example of: a) frictional unemployment. b) structural unemployment. c) cyclical unemployment. d) underemployment.

a) frictional unemployment.

Entrepreneurial activity is encouraged by: a) good institutions. b) opportunity costs. c) economic growth. d) trade-offs.

a) good institutions.

The most important concepts in economics, according to the textbook, are supply, demand, and the: a) idea of equilibrium. b) opportunity to barter. c) quantity of sales. d) the level of prices.

a) idea of equilibrium.

The supply curve: a) illustrates the quantity supplied at different prices. b) shows the relationship between the number of units purchased and the number of units produced. c) gives the maximum price that sellers may charge for a good and the quantity supplied. d) shows a negative relationship between price and output.

a) illustrates the quantity supplied at different prices.

If the price of gas is expected to rise sharply in the future, all else the same, the demand for gas today will: a) increase b) decrease c) remain the same d) change in an indeterminate direction

a) increase

If a national government improves its unemployment benefits, its unemployment rate will most likely: a) increase. b) decrease. c) remain the same. d) follow the global trend, regardless of national policy.

a) increase.

If the price of shotguns ______, the demand for shotgun shells will _______. a) increases; decrease b) increases; increase c) decreases; decrease d) decreases; stay the same

a) increases; decrease

If employers can fire an employee for any reason, other things being equal: a) it will be easier for job seekers to find employment. b) it will be more difficult for job seekers to find employment. c) the long-term unemployment rate will be higher. d) labor markets will be less flexible and dynamic.

a) it will be easier for job seekers to find employment.

If people expect an inflation rate of 3% and later it turns out to be 5%, then the real rate of return will be: a) less than the equilibrium rate. b) greater than the equilibrium rate. c) 3%. d) 5%.

a) less than the equilibrium rate.

An increase in unemployment benefits tends to: a) lower the incentive to search for a job and raise structural unemployment. b) lower the incentive to search for a job and lower structural unemployment. c) raise the incentive to search for a job and raise structural unemployment. d) raise the incentive to search for a job and lower structural unemployment.

a) lower the incentive to search for a job and raise structural unemployment.

Recall Chapter 1's opening story about the British sea captains and the convicted felons. Instead of paying the sea captains for each prisoner placed on board the ships in Great Britain, an economist suggested: a) paying for each prisoner who walked off the ship in Australia. b) paying for food and water to reduce costs of caring for prisoners during the transit. c) doing nothing, since the suggested change would not matter. d) that new regulations be passed to require prisoner safety and health

a) paying for each prisoner who walked off the ship in Australia.

The idea that markets work efficiently: a) refers to the fact that self-interest can be aligned with social interest. b) means that trade-offs can be reduced by channeling greed toward good ends. c) suggests that there is never any need for government regulation, taxes, or subsidies. d) has been known for many centuries.

a) refers to the fact that self-interest can be aligned with social interest.

When the unemployment rate rises, college enrollment tends to: a) rise. b) remain the same. c) fall. d) defy prediction.

a) rise.

Legal and cultural issues contribute significantly to what category of unemployment? a) structural b) cyclical c) short-term d) frictional

a) structural

https://docs.google.com/document/d/16AkpjoYcZUKoOFwg3nfNB4TuJiloxqPBKBBLRQyPjwI/edit (Figure: Supply Shifts) In the figure, the initial supply curve is S1. Producers engage in market speculation with the belief that the price of the good will increase in the near future. This would be represented in the figure by shifting the: a) supply curve to S2, resulting in a lower quantity supplied at each price. b) supply curve to S2, resulting in a higher quantity supplied at each price. c) supply curve to S3, resulting in a lower quantity supplied at each price. d) supply curve to S3, resulting in a higher quantity supplied at each price.

a) supply curve to S2, resulting in a lower quantity supplied at each price.

Which of the following elements reduces structural unemployment? a) the enhancement of worker retraining programs b) the extension of unemployment benefits c) the growth of labor unions d) the existence of employment protection laws

a) the enhancement of worker retraining programs

Refer to the figure. Which event could cause the change in the figure? a) the expectation of an outbreak of war in the world's best oil-producing regions b) the expectation of an increase in the future supply of oil c) the expectation that next week's oil prices will be substantially lower d) the expectation of a technology breakthrough in solar energy

a) the expectation of an outbreak of war in the world's best oil-producing regions

The better Martha Stewart is at running her business: a) the higher her opportunity cost of ironing her own shirts. b) the lower her opportunity cost of ironing her own shirts. c) the more it makes sense for her to iron her own shirts, because she will have more time. d) the more it makes sense for her to spend her time away from her business.

a) the higher her opportunity cost of ironing her own shirts.

Adults who do not have a job but who are looking for work are: a) unemployed. b) not part of the labor force. c) unwilling to accept employment. d) discouraged workers.

a) unemployed.

An increase in demand shifts the demand curve: a) up and to the right. b) down and to the right. c) up and to the left. d) down and to the left.

a) up and to the right.

Tim buys a house from Betty in 2011 for $200,000. Betty receives $185,000 and $15,000 goes to Mary, the real-estate agent. Betty originally purchased the house in 2007 for $240,000. What value is added to GDP in 2011 for this transaction? a) -$40,000 b) $15,000 c) $185,000 d) $200,000

b) $15,000

https://docs.google.com/document/d/16AkpjoYcZUKoOFwg3nfNB4TuJiloxqPBKBBLRQyPjwI/edit (Table: Three-Good Economy I) Suppose an economy produces only the three final goods shown in the table. The table gives information on the quantities produced and the prices of goods sold in 2008 and 2009. If prices in 2008 are used to calculate real GDP, what is the real GDP in 2008? a) $20,134 b) $21,134 c) $25,260 d) $26,260

b) $21,134

Air travel from Chicago to Los Angeles costs $800 and takes four hours. A bus ticket between the cities costs $100 and takes 104 hours. Other things constant, the minimum value of one's time that would induce a rational individual to fly rather than drive would be: a) $1 per hour. b) $7 per hour. c) $12 per hour. d) $120 per hour.

b) $7 per hour.

https://docs.google.com/document/d/16AkpjoYcZUKoOFwg3nfNB4TuJiloxqPBKBBLRQyPjwI/edit (Table: Components of GDP) Use the data in this table to calculate the contribution of rent and interest income to GDP. a) $6,032 billion b) $8,916 billion c) $10,806 billion d) $14,380 billion

b) $8,916 billion

https://docs.google.com/document/d/16AkpjoYcZUKoOFwg3nfNB4TuJiloxqPBKBBLRQyPjwI/edit (Table: iPhones) This table shows data for a country producing only iPhones. Its nominal GDP in 2010 is: a) $9,000. b) $9,900. c) $10,000. d) $10,800.

b) $9,900.

https://docs.google.com/document/d/16AkpjoYcZUKoOFwg3nfNB4TuJiloxqPBKBBLRQyPjwI/edit (Table: Three-Good Economy I) Suppose an economy produces only the three final goods shown in the table. The table gives information on the quantities produced and the prices of goods sold in 2008 and 2009. If prices in 2008 are used to calculate real GDP, what is the growth rate of real GDP in 2009? a) 4% b) 19.5% c) 24.3% d) 48.6%

b) 19.5%

Jordan loaned Taylor $1,200 on March 15, 2009. Taylor returned $1,260 on March 14, 2010. Inflation was 2% over the 1-year period. What is the real interest rate that Taylor paid? a) 2% b) 3% c) 5% d) 7%

b) 3%

Since World War II, the long-term average rate of real GDP growth in the United States has been about: a) 1.35%. b) 3.25%. c) 6.5%. d) 13.5%.

b) 3.25%.

A country has 50 million people, 30 million of whom are adults. Of the adults, 5 million are not interested in working, another 5 million are interested in working but have given up looking for work, and 5 million are still looking for work. Of those who do have jobs, 5 million are working part time but would like to work full time, and the remaining 10 million are working full time. What is this country's labor force participation rate? a) 50% b) 66.7% c) 75% d) 83.3%

b) 66.7%

Which of the following is a case of structural unemployment? a) Aaron is leaving his job to take a higher-paying position. b) Amanda has been searching over a year for a position working as a travel agent. c) Ashley took an early retirement package. d) Alfred is searching for a position in which his expertise in criminal forensics can be used.

b) Amanda has been searching over a year for a position working as a travel agent.

Which of the following activities is NOT considered an investment for calculating GDP? a) A farmer buys a new tractor. b) An investor purchases 100 shares of IBM stock. c) A family builds a new house. d) A college builds a new lab.

b) An investor purchases 100 shares of IBM stock.

Which of the following is TRUE of frictional unemployment? a) It arises as a result of too much market competition. b) It has a short duration. c) It is a result of the minimum wage law. d) It rises in a recession.

b) It has a short duration.

How might changes in marginal tax rates on married couples affect labor force participation rates? a) Higher marginal tax rates on married couples encourage lower labor force participation rates by the primary income earner. b) Lower marginal tax rates on married couples encourage higher labor force participation rates by the secondary income earner. c) Higher marginal tax rates on married couples encourage higher labor force participation rates by the secondary income earner. d) Lower marginal tax rates on married couples encourage lower labor force participation rates by the secondary income earner.

b) Lower marginal tax rates on married couples encourage higher labor force participation rates by the secondary income earner.

Which of the following identities represents the quantity theory of money? a) MP = Yv b) Mv = PYR c) P = M d) Mv = YR

b) Mv = PYR

Which of the following would NOT be included in this year's GDP for the United States? a) A U.S. business spends $100 million to build a new factory in South Carolina. b) The U.S. government distributes $10 million in social security payments. c) A foreign country purchases $2 billion worth of U.S. exports. d) U.S. consumers spend $40 million on domestically produced medical services.

b) The U.S. government distributes $10 million in social security payments.

https://docs.google.com/document/d/16AkpjoYcZUKoOFwg3nfNB4TuJiloxqPBKBBLRQyPjwI/edit (Table: Small-Town GDP) Which of the four towns in this table has the highest standard of living? a) Town A b) Town B c) Town C d) Town D

b) Town B

For an inferior good, higher income results in: a) an increase in demand. b) a decrease in demand. c) a movement up along the demand curve. d) a movement down along the demand curve.

b) a decrease in demand.

A decrease in demand refers to: a) a rightward shift of the demand curve. b) a leftward shift of the demand curve. c) an upward movement along the demand curve. d) a downward movement along the demand curve.

b) a leftward shift of the demand curve.

Adam Smith's metaphor of the "invisible hand" refers to the notion that: a) greed is always good when externally motivated. b) behavior based on self-interest can lead to an overall benefit to society. c) market incentive can lead to negative side effects. d) markets always align self-interest with social interest.

b) behavior based on self-interest can lead to an overall benefit to society.

In the 1800s, the federal government paid railroad companies for each mile of track built. This payment scheme created incentives for railroad companies to lay track: a) between points A and B using the most direct route. b) between points A and B using the most indirect route. c) as slowly as possible. d) using the best materials possible.

b) between points A and B using the most indirect route.

When two people voluntarily trade with each other: a) one person will be better off and the other person will be worse off. b) both of them will be better off. c) both of them will be worse off. d) whether they will be better off or worse off depends on how they negotiate with each other.

b) both of them will be better off.

Most investment spending is carried out by: a) consumers. b) businesses. c) government. d) foreigners.

b) businesses.

If the equilibrium wage is $9 in the market for hotel workers and $8 in the market for restaurant workers and both markets have similar elasticities of labor supply and demand, then a minimum wage of $10 in both markets will: a) cause more unemployment among hotel workers than restaurant workers. b) cause more unemployment among restaurant workers than restaurant workers. c) cause the same amount of unemployment in both markets. d) have no effect in either market.

b) cause more unemployment among restaurant workers than restaurant workers.

Final goods are goods: a) used to produce other goods. b) consumed or held in personal inventories. c) used up in the production process. d) that cannot be exported.

b) consumed or held in personal inventories.

Both unions and minimum wages: a) increase the quantity of labor demanded and reduce unemployment. b) decrease the quantity of labor demanded and increase unemployment. c) increase the quantity of labor supplied and reduce unemployment. d) decrease the quantity of labor supplied and increase unemployment.

b) decrease the quantity of labor demanded and increase unemployment.

An increase in production costs at any given quantity _______ supply. a) increases b) decreases c) does not change d) changes in an indeterminate direction

b) decreases

An increase in the future expected price of a storable good ________ supply. a) increases b) decreases c) does not change d) changes in an indeterminate direction

b) decreases

Increases in the minimum wage will most likely lead to: a) higher living standards for low-income workers. b) higher unemployment. c) lower wages in complement industries. d) increases in worker education programs.

b) higher unemployment.

As the population of elderly in the United States increases, which service will likely see the biggest increase in demand? a) skateboard repair b) home medical care c) career training d) child day care

b) home medical care

If a country's nominal GDP increases by 5% between two years while its GDP deflator increases by 4%, the country's real GDP: a) increases by 9%. b) increases by 1%. c) decreases by 1%. d) decreases by 9%.

b) increases by 1%.

When workers lose their jobs and become officially unemployed, the unemployment rate: a) remains constant. b) increases. c) decreases. d) becomes difficult to predict.

b) increases.

The percentage increase in a price index from one year to the next is the: a) real GDP growth rate. b) inflation rate. c) GDP inflator. d) nominal GDP growth rate.

b) inflation rate.

Quantity demanded: a) shows how much buyers are willing and able to buy at different prices. b) is the amount that buyers are willing and able to buy at a particular price. c) shows how much sellers are willing and able to sell at different prices. d) is the amount that sellers are willing and able to sell at a particular price.

b) is the amount that buyers are willing and able to buy at a particular price.

Structural unemployment is a bigger problem in Europe than in the United States because of: a) technological differences. b) labor market regulations. c) oil prices. d) drug use.

b) labor market regulations.

The most likely influence of the Internet on the rate of frictional unemployment has been to: a) raise it. b) lower it. c) have no effect on it. d) have an unpredictable effect on it.

b) lower it.

Money illusion is: a) the average number of times a dollar is spent on final goods and services in a year. b) mistaking changes in nominal prices for changes in real prices. c) a decrease in the average level of prices. d) an increase in the average level of prices.

b) mistaking changes in nominal prices for changes in real prices.

A policymaker wants to reduce inflation. In order to make an intelligent decision about how to do so, the policymaker: a) should use a simple rule: once inflation is gone, it will always be gone. b) needs to know the causes of inflation, for example, the government's printing off too much money. c) should find out if people are really better off as a result of the inflation. d) should realize that inflation can be reduced without any costs.

b) needs to know the causes of inflation, for example, the government's printing off too much money.

A tractor built in 2001 and still in operation today is: a) part of today's national wealth and GDP. b) part of today's national wealth but not part of today's GDP. c) part of today's GDP but not part of today's national wealth. d) not part of today's national wealth nor today's GDP.

b) part of today's national wealth but not part of today's GDP.

Which of the following is an example of an active labor market policy? a) minimum wage laws b) paying unemployed workers who find a job c) extending unemployment benefits d) worker unions

b) paying unemployed workers who find a job

Minimum wage laws and unions tend to: a) lower wages and raise unemployment. b) raise wages and raise unemployment. c) lower wages and lower unemployment. d) raise wages and lower unemployment.

b) raise wages and raise unemployment.

To compare levels of production from different years, the appropriate measure to use is: a) nominal GDP. b) real GNP. c) GDP-GNP. d) the GDP deflator.

b) real GNP.

https://docs.google.com/document/d/16AkpjoYcZUKoOFwg3nfNB4TuJiloxqPBKBBLRQyPjwI/edit In the diagram, the current demand curve for chicken legs is represented by D1. If the price of chicken thighs, a substitute for chicken legs, decreases, the demand curve for chicken legs will: a) shift to D2. b) shift to D3. c) remain at D1. d) shift to D2 and then back to D1.

b) shift to D3.

Adam Smith sought to explain the concept of aligning self-interest with the promotion of society's overall interest by: a) using an analysis of wealth as productivity. b) suggesting markets are led by an invisible hand. c) arguing that markets were ineffective institutions. d) suggesting that government increase regulations.

b) suggesting markets are led by an invisible hand.

Which of the following would be the most likely to cause inflation? a) massive increases in government spending b) sustained increases in the money supply c) increases in interest rates d) a decline in the purchasing power of the dollar

b) sustained increases in the money supply

What is one cause of inflation? a) the persistent rise in prices in the economy b) the inability of production to keep up with spending in the economy c) increased spending by people and the government. d) economic growth without money growth

b) the inability of production to keep up with spending in the economy

A demand curve indicates that: a) the quantity demanded of a good is higher when its price is higher. b) the quantity demanded of a good is higher when its price is lower. c) the demand for a good is higher when its price is lower. d) the demand for a good is higher when its price is higher.

b) the quantity demanded of a good is higher when its price is lower.

Suppose that you study hard, master the principles of economics, and earn a good grade in your economics class. This is an example of a good institution because: a) your school is selective; not everyone can get in. b) your self-interest in getting good grades aligns with the social interest of having people who understand economics. c) everybody gets good grades. d) sometimes the invisible hand is absent, not just invisible.

b) your self-interest in getting good grades aligns with the social interest of having people who understand economics.

What effect did reducing U.S. inflation from 13.5% in 1980 to 3% in 1983 have? a) Wealth was shifted from lenders to borrowers. b) The unemployment rate fell to 4%. c) The country experienced a recession. d) Per capita income increased by 18 % in 3 years.

c) The country experienced a recession.

The presence of discouraged workers causes the measured unemployment rate to be: a) correctly stated. b) overstated. c) understated. d) either overstated, understated, or correctly stated.

c) understated.

https://docs.google.com/document/d/16AkpjoYcZUKoOFwg3nfNB4TuJiloxqPBKBBLRQyPjwI/edit (Table: Three-Good Economy I) Suppose an economy produces only the three final goods shown in the table. The table gives information on the quantities produced and the prices of goods sold in 2008 and 2009. If prices in 2008 are used to calculate real GDP, what is the real GDP in 2009? a) $20,134 b) $21,134 c) $25,260 d) $31,400

c) $25,260

https://docs.google.com/document/d/16AkpjoYcZUKoOFwg3nfNB4TuJiloxqPBKBBLRQyPjwI/edit (Table: Anticipating Inflation) Using the inflation data in the table above, assume that all loan contracts have fixed nominal interest rates of 10% and mature after 1 year. Which year did borrowers gain relative to lenders? a) 2000 b) 2001 c) 2002 d) 2003

c) 2002

What is the labor force participation rate for a nation with an adult population of 20 million, 12 million employed workers, and 3 million unemployed workers? a) 50% b) 60% c) 75% d) 90%

c) 75%

What does the law of demand state? a) As incomes increase, people consume more of all goods. b) The demand for a good increases with the number of consumers in the market. c) As the price of a good increases, consumers purchase less of that good. d) The supply of a good increases in proportion to the demand for it.

c) As the price of a good increases, consumers purchase less of that good.

https://docs.google.com/document/d/16AkpjoYcZUKoOFwg3nfNB4TuJiloxqPBKBBLRQyPjwI/edit (Figure: Good X) From the figure, which statement is TRUE? a) At a price of $12 per unit, consumers are willing and able to purchase between 11 and 26 units of Good X. b) 36 units of Good X can be purchased by spending a total of $4. c) At a price of $6 per unit, consumers are willing and able to purchase 26 units of Good X. d) At a price of $4 per unit, consumers are willing and able to purchase 11 units of Good X.

c) At a price of $6 per unit, consumers are willing and able to purchase 26 units of Good X.

_____ reduce the quantity of labor demanded. a) Minimum wages only b) Union wages only c) Both minimum wages and union wages d) Neither minimum wages nor union wages

c) Both minimum wages and union wages

GDP is calculated by the: a) Council of Economic Advisors. b) Federal Reserve Board. c) Bureau of Economic Analysis. d) U.S. Treasury.

c) Bureau of Economic Analysis.

Which of the following would be included in U.S. GDP? a) The purchase of stocks and bonds by a retiree living in Florida. b) Wages earned by an American working on an oil rig in Mexico. c) Cars produced in a Honda (a Japanese Company) plant in Marysville, Ohio. d) Cars produced in a GM plant located in Canada.

c) Cars produced in a Honda (a Japanese Company) plant in Marysville, Ohio.

Suppose that consumers begin to believe that the price of housing will be lower next period. What will happen in the market for housing as a result of these expectations? a) Nothing will happen now. Consumers will wait for the price to actually decrease before changing their behavior. b) Demand for housing will increase now as people adjust to the expectation. c) Demand for housing will begin to fall now as people postpone their purchase until prices are lower. d) Investors will buy up all the housing inventory believing they are getting a "deal."

c) Demand for housing will begin to fall now as people postpone their purchase until prices are lower.

Two major policies used by the government to affect economic conditions are: a) acceleration and recalibration policy. b) recalculation and normalization policy. c) Fiscal and monetary policy. d) passive and active policy.

c) Fiscal and monetary policy.

Which of the following is a case of cyclical unemployment? a) Glenn quit his job to move to another state. b) Grace is an accountant temporarily unemployed since tax season has ended. c) Garrett lost his job after the company closed during last year's recession. d) Gwyneth is still seeking a job that will use her skills in statistics.

c) Garrett lost his job after the company closed during last year's recession.

Which of the following would NOT be included in this year's GDP? a) Tom and Amy pay $75 for a meal in a restaurant. b) Sarah pays her accountant $200 to do her taxes. c) Jim mows his neighbor's lawn as a favor. d) Megan buys a new Coach purse.

c) Jim mows his neighbor's lawn as a favor.

Which of the following is a concern among economists regarding the aging of the U.S. population? a) Since older people typically consume less, the aging of the population will lead to lower consumption and thus lower GDP. b) Since older people typically consume different goods (more health care and prescription drugs, less pizza and beer), an aging population will lead to increased structural unemployment in certain areas of the economy (such as the pizza and beer industries). c) Since older people are less likely to work, an aging population will lead to a decreased labor force participation rate in the United States and lower tax revenues. d) Since older people are more likely to favor increasing Medicare and prescription drug benefits, an aging population will alter political support for such programs.

c) Since older people are less likely to work, an aging population will lead to a decreased labor force participation rate in the United States and lower tax revenues.

If North Korea and South Korea were both equally poor in 1950, why has South Korea developed so much faster since then? a) The two countries have different language, cultural, and historical backgrounds. b) North Korea has an economic system that develops incentives. c) South Korea has maintained a more market-based economic system. d) South Korea began with a higher per capita GDP.

c) South Korea has maintained a more market-based economic system.

Which of the following government outlays is a transfer payment that would NOT be included in GDP? a) The Veteran's Administration pays a doctor to care for a wounded veteran. b) The National Security Agency builds a new building for its headquarters. c) The Social Security program sends a monthly payment to a senior citizen. d) The Defense Department buys a new aircraft carrier.

c) The Social Security program sends a monthly payment to a senior citizen.

Why is it less costly to attend college during a recession? a) Tuition is much lower during a recession. b) The opportunity cost is higher during a recession because there are more labor market opportunities. c) The opportunity cost is lower during a recession because there are fewer labor market opportunities. d) Colleges give out better grades during recessions, so the opportunity cost is lower.

c) The opportunity cost is lower during a recession because there are fewer labor market opportunities.

A firm produces volleyballs and soccer balls. What happens to the supply of soccer balls if the market price of volleyballs increases? a) The opportunity cost of producing soccer balls rises, so the supply curve of soccer balls increases. b) The opportunity cost of producing soccer balls falls, so the supply curve of soccer balls decreases. c) The opportunity cost of producing soccer balls rises, so the supply curve of soccer balls decreases. d) The opportunity cost of producing soccer balls falls, so the supply curve of soccer balls increases.

c) The opportunity cost of producing soccer balls rises, so the supply curve of soccer balls decreases.

Which of the following statements is TRUE? a) When the price of oil is high, consumers will use oil for both valuable and less valuable uses. b) When the price of oil is low, consumers will use oil only for its most valuable uses. c) When the price of oil rises, consumers tend to use oil for uses in which there are few substitutes for it. d) When the price of oil falls, consumers start to conserve oil and only use it when there are no other options.

c) When the price of oil rises, consumers tend to use oil for uses in which there are few substitutes for it.

Which of these services most likely would NOT be counted in GDP? a) You hire a real estate agent to sell a house you have owned for 10 years. b) You pay commission to the salesperson on the purchase of a used car. c) You pay your neighbor's teenage son to cut your grass while you are away on vacation. d) You hire a painting company to paint your 10-year old house.

c) You pay your neighbor's teenage son to cut your grass while you are away on vacation.

https://docs.google.com/document/d/16AkpjoYcZUKoOFwg3nfNB4TuJiloxqPBKBBLRQyPjwI/edit Which event would shift the demand curve for piano lessons from D1 to D2, as shown in the diagram? a) an increase in the price of piano lessons b) a decrease in the price of piano lessons c) a decrease in the price of pianos d) an increase in the price of pianos

c) a decrease in the price of pianos

https://docs.google.com/document/d/16AkpjoYcZUKoOFwg3nfNB4TuJiloxqPBKBBLRQyPjwI/edit This graph illustrates the work of psychologists Harvey Whitehouse and Quentin Atkinson, as published in the April 23-29, 2011 issue of The Economist. The "unpleasantness" of religious rituals (0 is low, 5 is high) is along the x-axis. How often the religion requires the ritual to be performed is along the y-axis. What economic concept does this diagram represent? a) opportunity cost b) consumer surplus c) a demand curve d) an inferior good

c) a demand curve

What are the institutions that help foster the appropriate incentives for economic growth? a) regulated labor and credit markets; and unions b) communal property rights and absence of a profit-loss system c) a dependable legal system, property rights, and competitive and open markets d) production and export quotas; and supply and demand

c) a dependable legal system, property rights, and competitive and open markets

Growth in nominal GDP over time can be caused by: a) an increase in prices over time. b) an increase in production over time. c) an increase in both prices and production over time. d) neither an increase in prices nor an increase in production over time.

c) an increase in both prices and production over time.

Weather forecasters predict that a major winter storm will strike your town within the next few days. Which would occur today based upon the expected storm? a) a decrease in peoples' willingness to pay for bottled water b) a decrease in demand for batteries c) an increase in people's willingness to pay for electric generators d) a shift to the left of the demand curve for snow tires

c) an increase in people's willingness to pay for electric generators

document/d/16AkpjoYcZUKoOFwg3nfNB4TuJiloxqPBKBBLRQyPjwI Which of the following factors would cause the change in the figure? a) an increase in the price of a complement good b) a decrease in peoples' willingness to pay for the good c) an increase in the price of a substitute good d) an increase in income for an inferior good

c) an increase in the price of a substitute good

In his book The Wealth of Nations, Adam Smith claimed that individuals: a) always act in an altruistic way. b) always consider the effect of their actions on others. c) are motivated by self-interest. d) are not concerned with resources.

c) are motivated by self-interest.

The average starting salary of economics majors is just behind that of: a) political science majors. b) marketing majors. c) chemical and nuclear engineering majors. d) education majors.

c) chemical and nuclear engineering majors.

According to the figure, the: a) costs of producing output have decreased. b) technology for producing output has improved. c) costs of producing output have increased. d) price of the product has decreased.

c) costs of producing output have increased.

Which type of unemployment is likely to be higher when real GDP growth is lower? a) structural unemployment b) frictional unemployment c) cyclical unemployment d) natural unemployment

c) cyclical unemployment

If, for any given amount of a good or service, willingness to pay increases, then: a) supply has increased. b) supply has decreased. c) demand has increased. d) demand has decreased.

c) demand has increased.

As the price of lead falls (a key input in the production of automobile batteries), the costs of producing batteries decreases, shifting the supply curve of batteries: a) down and to the left. b) up and to the right. c) down and to the right. d) up and to the left.

c) down and to the right.

If the FDA enacts more stringent pharmaceutical drug tests, two costs of this policy would be: a) drug lag and drug lapse. b) drug lapse and drug misallocation. c) drug loss and drug lag. d) drug misallocation and drug loss.

c) drug loss and drug lag.

The invisible hand concept is: a) always present as a force in market outcomes. b) never present as a force in market outcomes. c) frequently present as a force in market outcomes. d) not well understood as it relates to market outcomes.

c) frequently present as a force in market outcomes.

Most developed countries: a) have stopped growing. b) grow at an unsteady rate. c) grow at a steady rate. d) grow at an increasing rate.

c) grow at a steady rate.

Compared to the United States, unemployment rates in Western Europe tend to be: a) lower because of more labor regulations. b) lower because of fewer labor regulations. c) higher because of more labor regulations. d) higher because of fewer labor regulations.

c) higher because of more labor regulations.

Most economists believe that an increase in the supply of money results in: a) an increase in the demand for goods and services. b) higher unemployment in the short run. c) higher inflation in the long run. d) no change for the economy.

c) higher inflation in the long run.

In several cities around the country, schools are paying cash awards to students who do well on English and Math tests. This practice highlights the idea of: a) pedagogical economics—the continuous assessment of student performance in an effort to maximize student efficiency. b) hidden costs—the costs borne by taxpayers in the form of wasteful school spending. c) incentives—the rewards and penalties that motivate behavior. d) screening theory—the identification of individuals or groups based on various performance measures.

c) incentives—the rewards and penalties that motivate behavior.

The invention of birth control in pill form substantially _____ labor force participation. a) increased male b) decreased male c) increased female d) decreased female

c) increased female

Deciding whether to study an additional hour for an exam by comparing the additional benefits to the additional costs of an extra hour of study is an example of: a) the social interest. b) the invisible hand. c) marginal thinking. d) the power of trade.

c) marginal thinking.

According to Milton Friedman, "Inflation is always and everywhere a: a) capitalist problem. b) communist problem. c) monetary phenomenon. d) situation caused by haphazard technological growth.

c) monetary phenomenon."

The value of a country's GDP exceeds that of the country's GNP if the value of the: a) country's exports exceeds the value of its imports. b) country's imports exceed the value of its exports. c) output produced by foreign workers in the country exceeds the value of output produced by the country's permanent residents in other countries. d) output produced by the country's permanent residents produced in other countries exceeds the value of output produced by foreign workers in the country.

c) output produced by foreign workers in the country exceeds the value of output produced by the country's permanent residents in other countries.

If the price of oil were sufficiently high, it would be used only in: a) making plastics. b) generating heat. c) powering cars and jets. d) making kerosene.

c) powering cars and jets.

The supply curve shows the relationship between: a) demand and supply. b) quantity demanded and quantity supplied. c) price and quantity supplied. d) price and quantity demanded.

c) price and quantity supplied.

The main difference between Saudi Arabian oil production and United States oil production is the: a) quantity of production. b) cost of production. c) quality of product. d) price of product.

c) quality of product.

How often is GDP reported for the U.S. economy? a) weekly b) monthly c) quarterly d) annually

c) quarterly

What is the term for GDP when price changes are NOT included in its calculation? a) annual GDP b) nominal GDP c) real GDP d) aggregate GDP

c) real GDP

One reason for an increased female labor force participation rate is that the birth control pill has: a) raised the cost of living. b) reduced the adult population. c) reduced women's opportunity cost of working. d) reduced the number of male workers relative to female workers.

c) reduced women's opportunity cost of working.

What is one of the causes of frictional unemployment? a) uneducated work force b) willingness to take lower level jobs c) scarcity of information d) overabundance of job vacancies

c) scarcity of information

The supply curve: a) shows how much buyers are willing and able to buy at different prices. b) is the amount that buyers are willing and able to buy at a particular price. c) shows how much sellers are willing and able to sell at different prices. d) is the amount that sellers are willing and able to sell at a particular price.

c) shows how much sellers are willing and able to sell at different prices.

Oil shocks, the shift from manufacturing to service jobs, and the use of new technologies are reasons for _____ unemployment. a) frictional b) cyclical c) structural d) permanent

c) structural

If the demand for good A increases when the price of good B increases, then good A and good B are: a) not related. b) both inferior goods. c) substitutes for each other. d) complements to each other.

c) substitutes for each other.

The central bank of the United States is: a) the Senate. b) the Department of Treasury. c) the Federal Reserve. d) Wall Street.

c) the Federal Reserve.

Which price index measures the average price received by suppliers? a) the consumer price index b) the GDP deflator c) the producer price index d) the wholesale price index

c) the producer price index

Real GDP is calculated using: a) prices at the time of sale. b) the cost of production. c) the same prices in all years. d) a correction for inflation.

c) the same prices in all years.

Every day people rely on the work of others to provide us with food, clothing, and shelter. These people work for our benefit because: a) people think at the margin. b) trade-offs are everywhere. c) they benefit by doing so. d) institutions require them to do so.

c) they benefit by doing so.

Firms are willing and able to sell 100 guitars per day at a price of $250 per guitar. What price will firms require to sell 100 guitars per day if there is a tax of $15 per guitar? a) $235 b) $250 c) between $235 and $250 d) $265

d) $265

https://docs.google.com/document/d/16AkpjoYcZUKoOFwg3nfNB4TuJiloxqPBKBBLRQyPjwI/edit (Table: Three-Good Economy I) Suppose an economy produces only the three final goods shown in the table. The table gives information on the quantities produced and price of goods sold in 2008 and 2009. What is the nominal GDP in 2009? a) $20,134 b) $21,134 c) $26,260 d) $31,400

d) $31,400

The average tax on a professor's income of $100,000 is 18 percent, and the marginal tax rate above $100,000 is 45 percent. If the professor teaches during the summer and earns an additional $10,000 (bringing her total earnings for the year to $110,000), how much of the summer income does she keep after paying taxes? a) $4,500 b) $1,800 c) $6,300 d) $5,500

d) $5,500

https://docs.google.com/document/d/16AkpjoYcZUKoOFwg3nfNB4TuJiloxqPBKBBLRQyPjwI/edit In the figure, a $10 tax is imposed on the market for lobsters. What is the market price that lobster producers would need to receive to induce them to produce 5,000 bushels of lobster per day? a) $10 b) $40 c) $50 d) $60

d) $60

https://docs.google.com/document/d/16AkpjoYcZUKoOFwg3nfNB4TuJiloxqPBKBBLRQyPjwI/edit (Table: Three-Good Economy II) Suppose an economy produces only the three final goods shown in the table. The table gives information on the quantities produced and the prices of goods sold in 2008 and 2009. What is the growth rate of real GDP in 2009 if 2009 prices are used in the calculation of real GDP? a) -3.71% b) -2.94% c) -1.97% d) 1.00%

d) 1.00%

https://docs.google.com/document/d/16AkpjoYcZUKoOFwg3nfNB4TuJiloxqPBKBBLRQyPjwI/edit (Table: iPhones) This table shows data for a country producing only iPhones. The growth rate of real GDP between 2000 and 2010 (in 2000 dollars) is: a) -10%. b) 0%. c) 8%. d) 10%.

d) 10%.

https://docs.google.com/document/d/16AkpjoYcZUKoOFwg3nfNB4TuJiloxqPBKBBLRQyPjwI/edit (Table: Wheat and Corn) Consider a country that produces only wheat and corn. Based on the data in the table, the country's GDP deflator for 2008 (using 2005 prices for the calculation of real GDP) is: a) 100. b) 116. c) 127. d) 142.

d) 142.

https://docs.google.com/document/d/16AkpjoYcZUKoOFwg3nfNB4TuJiloxqPBKBBLRQyPjwI/edit (Table: Wheat and Corn) Consider a country that produces only wheat and corn. Based on the data in the table, the growth rate of nominal GDP from 2005 to 2006 is: a) 8%. b) 16%. c) 21%. d) 27%.

d) 27%.

https://docs.google.com/document/d/16AkpjoYcZUKoOFwg3nfNB4TuJiloxqPBKBBLRQyPjwI/edit (Table: Labor Data) According to the accompanying labor data, the unemployment rate is: a) 7%. b) 0.7%. c) 5.6%. d) 7.5%.

d) 7.5%.

https://docs.google.com/document/d/16AkpjoYcZUKoOFwg3nfNB4TuJiloxqPBKBBLRQyPjwI/edit (Table: Labor Data) According to the accompanying labor data, the labor force participation rate is: a) 60.4%. b) 99.3%. c) 69.4%. d) 75%.

d) 75%.

Which of the following is counted as part of GDP? a) The government sends a social security check to a retiree. b) Bob mows his lawn. c) Helen takes a day off to clean her house. d) A state government hires workers to repave the streets.

d) A state government hires workers to repave the streets.

Which of the following is an example of self-interest that attempts to promote the public interest? a) A mother prevents her children from becoming vaccinated against measles, mumps, and rubella because of fears of autism. b) The President of the United States restricts American consumers from buying foreign-made products. c) The New York Yankees beat the Boston Red Sox. d) An entrepreneur risks his life savings to open up a grocery store in an underserved area.

d) An entrepreneur risks his life savings to open up a grocery store in an underserved area.

Which of these transactions occurring in 2011 would contribute to GDP for 2011? a) A contractor sells a new house which was built in 2009. b) Mario sells his used car for a profit. c) Sally buys $10,000 worth of U.S. government bonds as an investment. d) Boeing sells a 787 aircraft produced in 2011 to a Korean airline.

d) Boeing sells a 787 aircraft produced in 2011 to a Korean airline.

Joe runs a landscape business. He knows that providing landscaping services costs him $100 per hour on average, while the cost of providing such services is $150 per hour after 5 PM (due to overtime pay, reduced productivity, and the added wear and tear on his equipment). A potential client offers Joe $130 per hour to provide services but needs him to provide the services after 5 PM due to circumstances at the property. a) Joe should take the job, since $130 exceeds his average cost of production. b) Joe should take the job, since he is making a $30 profit per hour. c) Joe should decline the job, since he would lose $150 per hour worked on the job. d) Joe should decline the job, since he would lose $20 per hour worked.

d) Joe should decline the job, since he would lose $20 per hour worked.

Which of the following is considered unemployed? a) Jason, a full-time college student, is looking for a part-time job. b) Julie, a full-time housewife, is searching for a part-time position. c) Joe, a retired college professor, does community volunteer work. d) John, on temporary layoff from his work, awaits recall.

d) John, on temporary layoff from his work, awaits recall.

Which of the following is TRUE of the effects of employment protection laws? a) They make labor markets more flexible in adjusting for changes in market conditions. b) They reduce the duration of unemployment. c) They reduce the unemployment rates among young and minority workers. d) They create employment security for workers with a job.

d) They create employment security for workers with a job.

Manuel insists he places an infinite value on his life. Stefan is suspicious of this claim and points out to Manuel that he sometimes eats ice cream when broccoli would be much better for him. What Big Idea is Stefan using? a) The Power of Trade: Manuel could not make his own ice cream, though he could grow his own broccoli; Manuel must be trading for ice cream. b) Incentives: No one is paying Manuel to be healthy. c) Thinking on the Margin: "Infinite value" is too much to be on the margin. d) Trade-offs: Gaining some enjoyment is worth giving up some safety.

d) Trade-offs: Gaining some enjoyment is worth giving up some safety.

The Zimbabwean government printed money as fast as it could for years. As a result: a) prices fell rapidly in Zimbabwe. b) the Zimbabwean economy grew rapidly. c) Zimbabwe experienced mild inflation. d) Zimbabwe experienced inflation at a rate of billions of percent per month.

d) Zimbabwe experienced inflation at a rate of billions of percent per month.

Which of the following choices contains only factors that cause the supply curve to shift to the right? a) a fall in production costs, a rise in technology, an increase in taxes on output b) a fall in tastes and preferences for the product, economic growth, and a rise in technology c) a decrease in taxes on production, a fall in subsidies on production, a rise in costs of production d) a rise in technology, a fall in the costs of production, a fall in taxes on output

d) a rise in technology, a fall in the costs of production, a fall in taxes on output

Discouraged workers are counted as part of the: a) labor force. b) unemployed. c) employed. d) adult population.

d) adult population.

Which of the following could cause an increase in the demand for gasoline? a) the resolution of a civil war in one of the world's biggest oil-producing nations b) the expectation that the price of gasoline will decrease in the future c) a new technology that makes the production of gasoline significantly less expensive d) an approaching hurricane that threatens a major oil refinery in Texas

d) an approaching hurricane that threatens a major oil refinery in Texas

https://docs.google.com/document/d/16AkpjoYcZUKoOFwg3nfNB4TuJiloxqPBKBBLRQyPjwI/edit In the diagram, which of the following factors would cause the demand curve to shift from D1 to D2? a) an increase in the price of a substitute good b) a decrease in the price of a complement good c) an increase in the population d) an increase in income if this is an inferior good

d) an increase in income if this is an inferior good

Which of the following is NOT a reason why there are now more women in the U.S. labor force today than there were before? a) a trend toward greater equality for women in the work place b) the move from a manufacturing to a service economy c) the availability and use of the birth control pill d) banning the sale of contraceptives

d) banning the sale of contraceptives

GDP is equal to: a) consumption + investment - net exports. b) consumption + investment + wages + profits. c) consumption + investment + government spending - net exports. d) consumption + investment + government spending + net exports.

d) consumption + investment + government spending + net exports.

Economists call household spending on final goods and services: a) net exports. b) government purchases. c) investment. d) consumption.

d) consumption.

What affects labor force participation rates? a) the demographic structure of a population b) the tax structure of an economy c) technological advances such as the birth control pill d) demographics, tax structure, and technological advances such as the birth control pill

d) demographics, tax structure, and technological advances such as the birth control pill

It makes sense that Martha Stewart hires another person to do her ironing because: a) she never learned how to iron. b) her opportunity cost of ironing is the same as the opportunity cost for the person she hires. c) her opportunity cost of ironing is lower than the opportunity cost for the person she hires. d) her opportunity cost of ironing is higher than the opportunity cost for the person she hires.

d) her opportunity cost of ironing is higher than the opportunity cost for the person she hires.

When we examine data from different countries, higher money growth has consistently been associated with: a) deflation. b) disinflation. c) hyperinflation. d) higher inflation.

d) higher inflation.

A real variable is one that: a) uses prices at the time of sale. b) uses the cost of production. c) has not been adjusted for inflation. d) includes a correction for inflation.

d) includes a correction for inflation.

If the price of computers ______, the demand for printers will ______. a) increases; increase b) decreases; decrease c) decreases; not change d) increases; decrease

d) increases; decrease

An increase in the general price level is: a) depreciation. b) appreciation. c) deflation. d) inflation.

d) inflation.

Which of the following factors causes a decrease in supply? a) a decrease in demand b) a decrease in the price of the product c) an increase in the price of the product d) new taxes on output

d) new taxes on output

Using the national spending approach to measuring GDP, the social security checks the government sends retirees each month get included in GDP as part of: a) consumption. b) investment. c) government purchases. d) nothing; they are not included as part of GDP.

d) nothing; they are not included as part of GDP.

Which variable does NOT shift the demand curve? a) population b) price of complement goods c) income d) price of the good itself

d) price of the good itself

Increases in _____ are considered the best measure of increases in living standards because they measure only increases in production. a) national wealth b) consumer spending c) nominal GDP d) real GDP

d) real GDP

Most economists prefer _____ as the best indicator of current economic performance. a) the GDP deflator b) consumer spending c) nominal GDP growth d) real GDP growth

d) real GDP growth

When GDP is calculated, goods are valued using: a) the cost of all inputs used in the production. b) the consumer price index. c) the producer price index. d) the current market price.

d) the current market price.

The most basic U.S. employment law stipulating that an employee may quit and employer may fire at any time and for any reason is called: a) affirmative action. b) the employee privacy law. c) the Equal Employment Opportunity Act. d) the employment-at-will doctrine.

d) the employment-at-will doctrine.

When deciding how much to study for an economics class, students should study until: a) the total benefits exceed the total costs. b) the total costs equal the total benefits. c) the marginal benefits exceed marginal costs. d) the marginal costs exceed marginal benefits.

d) the marginal costs exceed marginal benefits.

GDP provides a measure of: a) economic welfare and income equity. b) well-being that includes the value of both production and leisure. c) the impact of production on the environment. d) various types of legally earned income.

d) various types of legally earned income.

The quantity demanded is the quantity that buyers are: a) willing to buy but they cannot afford to pay. b) able to buy at a given income level but not willing to pay. c) willing to buy at a given income level. d) willing and able to buy at a given price.

d) willing and able to buy at a given price.

Which of the following programs could help overcome structural unemployment? a) worker retraining b) limitations to unemployment benefits c) job-search assistance programs d) worker retraining, limiting unemployment benefits, and job-search assistance

d) worker retraining, limiting unemployment benefits, and job-search assistance