Econ 2030 Exam 1

"The current trade deficit of $350 billion is too high" is a _____ statement.

normative

Which statement is among the four principles that underlie individual choice?

"How much" is a decision at the margin.

You decide whether to eat one more slice of cheesecake based on how hungry you feel. Which economic principle does this statement BEST represent?

"How much" is a decision at the margin.

(Table: Peanut Butter and Jelly Economy) Use Table: Peanut Butter and Jelly Economy. In 2019, nominal GDP was _____ and real GDP was _____. ​ Product2018 Output2018 Prices (base year) Product 2019 Output 2019 Prices Peanut butter 200 units $1 per unit Peanut butter 250 $1.10 per unit Jelly 100 units $2 per unit Jelly 100 $2.50 per unit ​

$525; $450

Which question is MOST appropriate to the study of MACROECONOMICS?

How does the aggregate price level affect overall consumer spending?

In the market for fresh coffee, a normal good, which of the following will shift the demand curve to the right?

Incomes rise.

If they spend all night writing poems, Leticia can write 10 poems, and Isabella can write 5. If they spend all night making necklaces, Leticia can make 6, and Isabella can make 4. We know that _____ has a comparative advantage in _____.

Leticia; poems

Which of the following statements is normative?

Scientists should not make normative statements.

Which statement is normative?

The minimum wage is necessary to help fight poverty.

Which transaction would NOT be counted in GDP?

Your mother buys 100 shares of Nike stock.

Which factor would shift the demand curve for new computers to the right?

an increase in student enrollment in college

The market for lobster is in equilibrium. Which factor is most likely to INCREASE the equilibrium price of lobster?

an increase in the price of salmon, a substitute in consumption

Real GDP is nominal GDP adjusted for:

changes in prices.

(Scenario: Linear Production Possibility Frontier) Use Scenario: Linear Production Possibility Frontier. If Smallville's labor resource decrease by 40 hours, the opportunity cost of producing shirts: Scenario: Linear Production Possibility FrontierSmallville has a linear production possibility frontier, and it produces pants and cowboy hats with 80 hours of labor. The table shows the number of hours of labor necessary to produce one pair of pants or one cowboy hat.Number of hours of labor to produce on pair of pantsNumber of hours of labor to produce one cowboy hat 4 2

does not change.

Among the tools available to macroeconomic policy makers is:

fiscal policy, to influence overall spending.

An economic model:

is a simplified version of reality used to understand real-world economic conditions.

A country's living standard is BEST measured by:

per capita real GDP

The trade-off between equity and efficiency is seen in the fact that:

policies that promote equity often come at a cost of decreased efficiency.

Statements about the way the economy actually works are generally referred to as:

positive economics.

Fiscal policy entails:

setting levels of taxation and/or government spending.

Which factor can BEST be described as a resource used to produce iPhones?

software engineers who code iPhones

It is certain that the equilibrium quantity will fall when:

the supply curve and the demand curve both shift to the left.

(Table: Pizza Economy III) Use Table: Pizza Economy III. Considering 2018 as the base year, real GDP between 2018 and 2019 grew at a rate of: 2018 Units of Output2018 Price per Unit2019 Units of Output2019 Price per Unit Gino's Pizza 4,000 $10 4,000 $8 Bee's Spaghetti 3,000 $9 1,000 $6 Claudia's Cookies 2,000 $6 1,000 $1 Andre's Salad 5,000 $7 2,000 $4

-39.47%.

A price index is normalized so that it equals ____ in a selected base year.

100

In the United States, investment spending accounts for approximately _____% of GDP.

16

Which item is NOT included in calculations of GDP?

a monthly Social Security payment

While buying refreshments for an upcoming party, you notice that a six-pack of Bud Lite Beer costs $6 and that a six-pack of Miller Lite Beer costs $8. You buy the six-pack of Miller Lite Beer, although you wonder if maybe two six-packs of Bud Lite Beer would have been a better choice. The opportunity cost of the Miller Lite Beer is:

two six-packs of Bud Lite Beer.

Trade surpluses occur:

when the value of imports is less than the value exports.