Econ final
Your significant other wants to go out for coffee, but you say you can't because you have to study for an accounting test. Your significant other sniffs "oh, so I guess you care more about accounting more than you care about me." Based on what you've learned this term, which answer best expresses how to think about your choice?
"only at the margin"
I borrowed $8 from a friend in 1998, when the CPI was 164.4. The most recent estimate of the CPI is 276.724. Round to the nearest dollar: how much money would I have to give my friend to get him now what $8 would have gotten him in 1998?
$13.47
Use the data below to find US GDP for the year 2020: Consumption: 14,047.6 Investment: 3,637.8 Government purchases: 3,859.5 Exports: 2123.4 Imports: 2774.6
$20,893.7
In the __________________________ run, prices are sticky. In the ___________________________________ run, prices are flexible.
$436.72
A bond that will pay you $500 in a single year is worth _______________________ right now if the interest rate is 9%. Round to the nearest penny.
$458.72
In September 1955, you could have gotten a Waffle House Waffle Sandwich for $0.50. In September 1955, the CPI was 26.85. In October 2021, it was 276.724. How much is $0.50 in 1955 dollars expressed in 2021 prices? Round to the nearest penny.
$5.15
Natasha mines silver ore and sells it to Clint for $300. Clint refines the ore into fine silver and sells it to Bruce for $350. Bruce uses the silver to mint commemorative coins he sells to Tony for $400. Tony then sells the coins to Steve for $500. Assume all the transactions take place in 2021 in the United States. The contribution to GDP is __________________________________.
$500
On September 5, 1955, someone visiting Waffle House would have been able to get a Waffle with Ham for $0.70. In September 1955, the Consumer Price Index was 26.85. In October 2021, the Consumer Price Index was 276.524. Convert the 1955 price of a Waffle with Ham into 2021 dollars. Round to the nearest penny.
$7.21
At one point during the September 4, 2021 Oklahoma-Tulane football game, Oklahoma kicked off to Tulane. The Tulane kick returner fielded the ball in the end zone. Had he kneeled and accepted a touchback, Tulane would have started their possession on the 25 yard line. Instead, he chose to run and was tackled at the 21 yard line. At the margin, how many yards did Tulane gain from the kick returner's 21-yard run?
-4
The Covid-19 pandemic was a negative real shock and a negative aggregate demand shock. Consider just the aggregate demand shock. As a result of the negative aggregate demand shock, output growth _______________________________ and inflation __________________________________.
fell, fell
The Covid-19 pandemic was a negative real shock and a negative aggregate demand shock. Consider just the real shock. As a result of the negative real shock, output growth _______________________________ and inflation __________________________________.
fell, rose
High-value uses of cedar are those for which cedar has __________________________ substitutes. Low-value uses of cedar are those for which cedar has __________________________________ substitutes.
few, many
On average, someone who has a last name beginning with a vowel earns 93% of what someone who has a last name beginning with a consonant earns. If this difference is not explained by differences in productivity, how would you expect profit-maximizing firms to respond?
fire people with consonant last names and hire people with vowel last names
In general, Americans pay lower tax rates than Europeans. This means Americans, for the most part, stay in the labor market ___________________________________________.
for more time than europeans
In a competitive labor market, firms will hire every hour of labor ___________________________________.
for which the value of the marginal product is higher than the wage
Laws that excluded women and minorities from different occupations ______________________________________________________.
forcibly prevent resources from moving to their highest-value uses
Every month, a lot of restaurants close. The people who lose their jobs at these restaurants are likely to find new jobs quickly. They are ________________________________________ unemployed.
frictionally
According to a Petition of a wooden-shoe-makers' guild in 1493, people competing with the shoe-makers "...have been trained, and afterwards some have become masters, and are hindering and greatly harming this brotherhood, and have settled in the villages, and are making wares that are not adequate, and are deceiving God and the world, and are selling a pair of wooden shoes for 4 Heller...And this is the custom concerning how we should sell each pair of wooden shoes: firstly, a pair of block wooden shoes shall be sold for 9 Heller..." Suppose the guild was successful in limiting competition by requiring long apprenticeships. What would have happened?
gains from trade would fall because the restriction would create deadweight loss in the labor market
In the 1770s, the Valencia guild of rope-makers, braid makers, and button makers opposed a school that would have taught girls "to make buttons or any other craft appropriate to their sex and womanly strengths." If they were successful, _____________________________________.
gains from trade would have fallen because workers who had marginal products more valuable than their best alternatives would not have been hired
Economics predicts that ____________________________________________. Assume there are no transportation costs or transaction costs.
goods like hand sanitizer will trade for the same price in all markets
In 1747, Spain's King Ferdinand VI created a new office in charge of maintaining and building roads with the funds coming from the Spanish Treasury. This spending would count as part of the _______________________________ component of Spain's Gross Domestic Product.
government purchases
The _____________________________ for the United States for the year 2021 is the market value of all finished goods and services produced in the United States in 2021.
gross domestic product
Technological progress makes it _____________________ to measure an economy's output (GDP) and _______________________ to measure inflation.
harder, harder
Landlocked countries with few navigable waterways _____________________________________________.
have a harder time trading in international markets
A few years ago, a Jose Cuervo tequila advertisement said "tomorrow is overrated." This is an expression of _____________________________________.
high time preference
According to the supply and demand model, a higher demand for cedar will mean ______________________________ cedar prices and a _______________________________ quantity of cedar.
higher, higher
I wrote an old version of this question when the price of Amazon stock was $3065. I just checked the price and saw that it's $3549. According to the Efficient Markets Hypothesis, the right move would be to _______________________________________________.
neither buy nor sell Amazon stock because its price reflects all publicly available information
________________________________ has (or had) all the knowledge necessary to make a bottle of hot sauce.
no single individual or agency
Suppose Congress passes legislation that will authorize payments to workers who lost their jobs during the diffusion of the Covid-19 delta variant. These payments will __________________________________________.
not be counted in GDP because they are transfer payments
If the price of cedar is at equilibrium, prices will ________________________________ because __________________________________.
not change, quantity demanded equals quantity supplied
My niece Evangeline was born in mid-September. Like newborns around the world, she doesn't have a job. According to the Bureau of Labor Statistics, she is ___________________________________.
not part of the labor force
According to Dr. Chew, students tend to _________________________________ their understanding of the material they are studying.
overestimate
Holding everything else constant, a higher minimum wage that is binding on low-skill workers ________________________________ the demand for high-skill workers and ___________________________________ high-skill workers' wages.
raises, raises
A measure of GDP that accounts for inflation is ________________________ GDP.
real
An increase in the price of cheese will __________________________________ the supply of pizzas.
reduce
Compared to a free market, minimum wages _____________________________ gains from trade going to firms.
reduce
By pooling many savers' savings, banks ___________________________________________.
reduce the cost of "triangulation"
Buying a roll of "forever" stamps, which are good for first-class US postage no matter what happens to prices, is one way to _______________________________________________.
reduce the risks that come with inflation
Brand names ____________________________________________.
reduce transaction costs by conveying information about a product's quality
Consider the market for agricultural labor in Haiti depicted below. Better opportunities in the construction industry would ________________________________ the supply of labour in Haitian agriculture and _________________________________ agricultural wages.
reduce, increase
A tariff on the market for cherries ______________________________________.
reduces gains from trade overall
Holding everything else constant, eliminating a minimum wage that is binding on low-skill workers ________________________________ the demand for high-skill workers and ___________________________________ high-skill workers' wages.
reduces, reduces
Financial intermediaries create value by _____________________________________________.
reducing transaction costs
Borrowing money to buy a new home comes with a lot of tax advantages. These advantages are ______________________________________________________.
reflected in the sale prices of homes
Elinor and Marianne have the following production possibilities, expressed in pieces of fruit per hour: avocados: Elinor 300; Marianne 600 cherries: Elinor 100; Marianne 150 Elinor offers Marianne a cherry in exchange for 3.75 avocados. Who would benefit from the trade?
Elinor and Marianne
Elinor and Marianne have the following production possibilities, expressed in pieces of fruit per hour: avocados: Elinor 400; Marianne 20 cherries: Elinor 50; Marianne 10 At a price of seven avocados per cherry, who would be better off?
Elinor and Marianne
Elinor and Marianne have the following production possibilities, expressed in pieces of fruit per hour: avocados: Elinor 300; Marianne 600 cherries: Elinor 100; Marianne 150 Elinor offers Marianne a cherry in exchange for 5 avocados. Who would benefit from the trade?
Elinor but not Marianne
Elinor and Marianne have the following production possibilities, expressed in pieces of fruit per hour: avocados: Elinor 300; Marianne 600 cherries: Elinor 100; Marianne 150 _______________________ has a comparative advantage in cherries. ___________________________ has a comparative advantage in avocados.
Elinor, Marianne
Suppose the equilibrium quantity is 230 million hours of labor. What is true about all of the hours of labor between hour number zero and hour number 230 million?
Firms value them more than workers value their best alternative to working. Gains from trade will increase if they are traded.
Which of the following is a limitation of the Civilian Unemployment Rate? I. It counts both part-time and full-time workers as "employed" even if the part-time workers want to work full time II. It might overestimate the strength of the labor market by not counting "discouraged workers" III. it does not include structural unemployment
I and ii only
Which of the following is an example of a "bootlegger and Baptist" coalition? I. computer companies and education activists pushing to have schools provide every child with a laptop II. bootleggers supporting prohibition because it reduces their competition and Baptists supporting prohibition because drinking is sinful III. concerned parents asking that Congress outlaw football
I and ii only
For the sake of this question, assume the chopped onion pictured below was sold as part of a meal at a restaurant. Assume the knife was made in 2021. Which statement(s) would be true?
The onion pictured is an intermediate good because it will be sold again as part of another good. The knife is an investment good because it will not be sold again as part of another good.
The labor demand curve represents ___________________________________________.
how many hours of labor people are willing to hire at different wages
Shrimp dumplings and dumpling sauce are complements. A lower price of shrimp dumplings will _____________________________ demand for dumpling sauce.
increase
The graph below depicts the US market for cherries. Consider the move from domestic trade only to free trade with the world. This will _______________________________________________.
increase consumer surplus by more than it reduces producer surplus
Holding everything else constant, advances in quantum computing will ___________________________________________. Start with the picture below.
increase steady state output
A proposal to mandate Paid Family Leave would require employers to pay workers while they take time off work to care for children or elderly parents. Holding everything else constant, the policy will ____________________ labor supply and _______________________ wages.
increase, decrease
Almonds and cashews are substitutes. Holding everything else constant, an increase in the price of almonds will __________________________ the equilibrium price and _____________________________ the equilibrium quantity of cashews.
increase, increase
Cake and ice cream are complements. Holding everything else constant, a decrease in the price of cake will _________________________ the equilibrium price and ____________________________ the equilibrium quantity of ice cream.
increase; increase
Under the medieval guild system, people had to have special licenses in order to work in certain jobs. These licenses _________________________________ the "natural rate" of unemployment.
increased
Workers in Mexico earn more than workers in the Central African Republic. What is the main reason?
Workers in Mexico are more productive and have better alternatives
In the 1850s, modernization in the Spanish cities of Madrid and Barcelona meant higher wages in these cities. Holding everything else constant, higher wages in Madrid and Barcelona would lead to ________________________________ in Spanish cities like Alicante and Vitoria. Hint: think about our analysis of "speculators" in the market for gas earlier in the term.
a lower supply of labor
A change in spending growth shifts the __________________________________.
aggregate demand curve
The Keynesians and the Monetarists agree that business cycles are largely caused by _______________________________________________.
aggregate demand shocks
Many medieval European guilds imposed training and apprenticeship requirements on prospective members. Some, however, exempted men who married senior members' daughters. Holding everything else constant, these exemptions _______________________________________.
increased the advantage to marrying a guild member's daughter
Research suggests showing that during recessions (when incomes are going down), people are more likely to shop at Roxxcart and less likely to shop at ShopSmart. During economic booms (when incomes are going up), it reverses: people are more likely to shop at ShopSmart and less likely to shop at Roxxcart. This means the Roxxcart shopping experience is a(n) _____________________________ while the ShopSmart shopping experience is a(n) _____________________________________ good.
inferior, normal
During his Spring 2021 lecture at Samford University, James Stoner explained legislation stopping the government from stopping unemployment benefits if someone's religion prohibits Saturday work, stopping the government from compelling schooling for the Amish, and allowing the military to maintain a dress code. These formal rules are examples of ______________________________________-.
institutions
Good _______________________________________ explain why and when financial intermediation works.
institutions
It would cost Joe $1.2 million to obtain the land, labor, capital, and raw materials he would need to produce $1.5 million worth of sticky notes. Therefore, he should produce sticky notes.
insufficient information to answer the question
A(n) ____________________________ good will be resold as part of another good and is therefore not counted in GDP. A(n) _____________________________ good will be used to produce another good, but it will not be resold as part of that good and is therefore not counted in GDP.
intermediate, investment
According to the Solow growth model, an economy is in steady state when ___________________________________.
investment equals depreciation
Refer to the picture below. If the capital stock is below the steady-state value, _____________________________________________________________________
investment exceeds depreciation and the economy will grow
"Rising standards of living in one part of the world require falling standards of living in another part of the world." This statement __________________________________________.
is false because we can get more output with given resources when people can specialize and trade
Assume there is no minimum wage or other intervention in the labor market. At a wage that is above the equilibrium wage, the amount of labor demanded _____________________________ the amount of labor supplied and wages will _____________________________.
is lower than, fall
As I write this, my younger son and one of his friends are in our kitchen making rock candy to sell at their school's bazaar. Which statement is true?
it does not change
The graph below depicts the market for cherries after they have been subjected to a 25-cent-per-pound tariff. What happens to producers' surplus as a result of the tariff?
it rises because producers earn more per pound of cherries and can sell more cherries profitably at a price of $3.75 per pound
The graph below depicts the market for studio apartments. What happens to people's willingness to pay for the marginal apartment if a rent control reduces the quantity supplied from 1800 to 1200 units?
it rises to $750/month
Rent control will likely do what to the quality of the housing stock? Minimum wages will likely do what to job safety? Remember we are holding everything else constant.
it will deteriorate, jobs will become more dangerous
When financial intermediaries lend money in ways that are politically advantageous rather than financially advantageous, it makes financial intermediation _____________________________________.
less effective
Consider the loanable funds market depicted below. Holding everything else constant, lower government borrowing would mean a(n) __________________________ interest rate.
lower
Holding everything else constant, higher interest rates mean _________________________________ bond prices.
lower
By connecting savers with borrowers, financial intermediaries ____________________________________.
lower transaction costs and move assets from lower to higher-value uses
A sign on the headquarters of the American Federation of State, County, and Municipal Employees in Washington, DC shows a picture of a worker and says "Everyone deserves safe working conditions and working conditions and that's why I'm union." Holding everything else constant, a law requiring safer working conditions would lead to _____________________ wages and/or ___________________ non-cash benefits like coffee and sparkling water on tap.
lower, fewer
New technology makes it easier to raise radishes. Holding everything else constant, this will ___________________________________ the equilibrium price and _________________________________ the equilibrium quantity of radishes.
lower, raise
Bonds earn ____________________________________ returns than stocks because they are __________________________________________.
lower, safer
Gross Domestic Product is the _______________________________.
market value of all finished goods and services produced in a country in a year
Elections give candidates incentives to __________________________________________.
moderate their extreme positions to appeal to the median voter
The Federal Reserve uses ___________________________________ to moderate business cycles.
monetary policy
A law requiring that employers give new mothers paid time off during and after pregnancy would make female employees ________________________ relative to male employees and encourage employers to hire more ______________________.
more expensive, males
A worker who moves to the United States from Mexico would increase her productivity because should would be able to work with ____________________________ and ___________________________ factors of production.
more, better
As wages go down, firms will demand ______________________________ hours of labour and workers will be willing to supply _________________________ hours of labour.
more, fewer
In the Austrian theory of the business cycle, lower interest rates tell consumers to buy _____________________ and firms to invest ______________________________.
more, more
In the Solow growth model, a reduction in the depreciation rate would lead to _______________________________ steady state capital stock and ___________________________________ steady state output.
more, more
Joe spends $1.2 million to produce $1 million worth of Sticky Notes. He is _______________________________________________.
moving resources from higher-value to lower-value uses
According to what we have learned so far, what is true in equilibrium in the market for any good? quantity supplied equals quantity demanded all of these are true in equilibrium the lowest-cost sellers are those who sell people make all the mutually beneficial trades the highest-value buyers are those who buy
all of these are true in equilibrium
"Capitalism" describes ______________________________________________.
an economic system based on private property, free labor, and voluntary exchange
"Socialism" describes ___________________________________________________.
an economic system in which the government owns and controls the means of production
A football player catches a kickoff in the end zone. If he kneels and downs the ball, his team will start at the 25-yard line. Instead, he ran the ball out of the end zone and was tackled at the 26-yard line. His run improved his team's position by _______________ yard(s).
1
Elinor and Marianne have the following production possibilities, expressed in pieces of fruit per hour: avocados: Elinor 400; Marianne 20; cherries: Elinor 50; Marianne 10 Marianne's opportunity cost of producing an avocado is _______________________ cherries.
1/2
Elinor and Marianne have the following production possibilities, expressed in pieces of fruit per hour: Avocados: Elinor 300; Marianne 600; cherries: Elinor 100; Marianne 150 Elinor's opportunity cost of producing an avocado is _______________________ cherries.
1/3
Elinor and Marianne have the following production possibilities, expressed in pieces of fruit per hour: avocados: Elinor 300; Marianne 600 cherries: Elinor 100; Marianne 150 Marianne's opportunity cost of producing an avocado is _______________________ cherries.
1/4
Elinor and Marianne have the following production possibilities, expressed in pieces of fruit per hour: avocados: Elinor (300) Marianne (600); cherries Elinor (100) Marianne (150) Elinor's opportunity cost of producing a cherry is _______________________ avocados.
3
Elinor and Marianne have the following production possibilities, expressed in pieces of fruit per hour: avocados: Elinor 300; Marianne 600 cherries: Elinor 100; Marianne 150 Marianne's opportunity cost of producing a cherry is _______________________ avocados.
4
The writing assignments in Kritik will be worth ____________________% of my grade.
5
The economy's potential (i.e. Solow) growth rate is 3%. Nominal spending is growing by 12% per year. What is the inflation rate?
9%
Elinor and Marianne have the following production possibilities, expressed in pieces of fruit per hour: avocados: Elinor 300; Marianne 600 cherries: Elinor 100; Marianne 150 What happens if they specialize in their comparative advantage and trade at a price of 3.5 avocados per cherry?
Both Elinor and Marianne are better off
Here's an interesting quote from a recent article on rent control in St. Petersburg, Russia in the years leading up to the 1917 October Revolution: "While other prices kept on increasing rapidly (by October 1917, historians even speak of hyperinflation), rents followed a different path, allowing us to conclude that rent affordability was not one of the prevailing problems in the two years preceding the Revolution. Instead, it became very difficult to find a vacant dwelling." Which statement below is true? Here's a graph of the market for studio apartments that we have used in class that will help you.
By forcing prices down, city officials encouraged demanders and discouraged suppliers. This led to a shortage in the market for rental housing because at the controlled rent, the number of apartments demanded exceeded the number of apartments supplied.
Many economists agree that the economy would be more efficient if the US government got rid of the mortgage interest tax deduction. Why might this be unlikely to happen? I. Many middle- and upper-middle-class homeowners save thousands of dollars a year due to this special tax break. II. A constitutional amendment prohibits this kind of change to the tax code III. Homebuilders and realtors get a lot more business because of the tax break.
I and iii
Transaction costs include the costs of ___________________________________. I. moving merchandise II. paying taxes III. finding trading partners
I and iii only
Chick-fil-a is willing to sell a chicken sandwich for $4. Sita is willing to pay $10. The equilibrium price of chicken sandwiches is $5. Which statement is true? I. There would be a gain from trade if Sita were to buy a sandwich from Chick-fil-a at the equilibrium price II. Gains from trade would fall if Sita were to buy a chicken sandwich at the equilibrium price III. Chick-fil-a is better off, but Sita is worse off if they trade at the equilibrium price.
I only
If you own something, you have the right to _________________________________________. I. "harvest" or "withdraw" from it, i.e. enjoy what it produces II. decide who gets to access it III. sell it or give it away
I, ii, and iii
According to what we have learned so far, what is true in equilibrium in the market for any good? I. Quantity supplied equals quantity demanded II. the lowest-cost sellers are those who sell III. the highest-value buyers are those who buy IV. people make all the mutually beneficial trades
I, ii, iii, and iv
An additional ton of sugar should be used to make ________________________________________.
Insufficient information to answer the question.
At the grocery store, you see that you can get one package of Oreos for $4 or two packages for $6. Which is the better deal?
It depends on what you are willing to pay for the second package of cookies.
You hear that Rama and Lakshman are walking through the park on their way to interview with the janitorial service you own. Rama is drinking a cheap beer while Lakshman is drinking an expensive coffee. If this is all you know about them, what might be the most reasonable inference?
Lakshman will likely be the better employee: drinking beer in the park on the way to a job interview sends a negative signal about Rama's unobservable characteristics
Elinor and Marianne have the following production possibilities, expressed in pieces of fruit per hour: avocados: Elinor 300; Marianne 600 cherries: Elinor 100; Marianne 150 __________________________ has an absolute advantage in cherries. _____________________________ has a comparative advantage in cherries.
Marianne, Elinor
Elinor and Marianne have the following production possibilities, expressed in pieces of fruit per hour: avocados: Elinor 400; Marianne 20 cherries: Elinor 50; Marianne 10 __________________________ has a comparative advantage in cherries. _______________________ has a comparative advantage in avocados.
Marianne, Elinor
Elinor and Marianne have the following production possibilities, expressed in pieces of fruit per hour: avocados: Elinor 300; Marianne 600 cherries: Elinor 100; Marianne 150 __________________________ has an absolute advantage in avocados. _______________________________ has a comparative advantage in avocados.
Marianne, Marianne
If expiring unemployment benefits increase the supply of labor, wages will ________________________________ and the number of hours of labor hired will ______________________________________.
fall,, rise
Over the last few decades, the number of people in the world living in extreme poverty has ____________________________.
fallen
If we expect the price of gas to fall next week, the opportunity cost of selling gas today ______________________________________.
falls
true or false: If the cost of labor rises, companies like Heinz will supply more goods because they will need to sell more to cover their higher costs.
false
when ______________________ there is a surplus
quantity supplied exceeds quantity demanded
Chocolate and roses can both be grown on land in Kenya. Holding everything else constant, an increase in the price of chocolate will _____________________________________ the equilibrium price and _____________________________ the equilibrium quantity of roses.
raise, lower
true or false: It is illegal to buy and sell live (or dead) pandas. If it were legal, pandas would be easier to value and easier to include in Gross Domestic Product.
true
Under Apartheid in South Africa, some jobs were explicitly reserved for whites and "rate for the job" minimum wage requirements effectively excluded Africans from some occupations. In response, some South African firms came up with new titles under which they hired black workers: white workers, for example, might be "ticket collectors" while black workers doing the same job might be "ticket examiners." Rules excluding black workers from the labor market created ________________________________, and the firms' innovations were examples of ____________________________________.
deadweight loss, superfluous discovery
Refer to the picture below and consider an economy in steady state. An increase in the depreciation rate will _______________________________________________.
decrease the steady-state capital stock and decrease steady state output
TVs are normal goods. Holding everything else constant, a decrease in people's incomes will ______________________ the equilibrium price and ___________________________ the equilibrium quantity of TVs.
decrease, decrease
If nominal spending growth is 2% and real economic growth is 3%, ________________________________ is happening.
deflation
Banks evaluate potential borrowers' creditworthiness. This reduces the ___________________________ element of transaction costs.
trust
Without patents, ________________________________________.
drug companies might not have incentives to spend lots of money on research and development because their innovations could be imitated easily
According to Dr. Chew, multi-tasking makes you ________________________________.
dumber
In the factor incomes approach to calculating national income, the biggest component is _____________________________________________.
employee compensation (or wages)
In August 2021, the inflation rate was 5.2%. In October 2021, the inflation rate was 6.2%. Which statement is true?
the increase in the inflation rate redistributed from lenders to borrowers
The market for low-skill labor after the imposition of a minimum wage is depicted below. The minimum wage _______________________________________.
encourages suppliers but discourages demanders, leading to unemployment
Wages should __________________________ during a recession in order to reestablish full employment.
fall
As a result of the minimum wage depicted below, gains from trade accruing to employers ultimately __________________________ and gains from trade accruing to employees ultimately _________________________.
fall, fall
It is illegal to buy or sell human organs in the United States even though making it legal would eliminate organ shortages very quickly. This is an example of what Bryan Caplan calls _______________________________________.
anti-market bias
A local economist who shall remain nameless recently spent about $1200 on body work after backing into his sister-in-law's car. The accident was ______________________________.
bad for the economy; the resources that went into fixing the car could have been used for something else
Competitive and open markets lead to ___________________________________ resource allocation and ______________________________ "creative destruction."
better, more
Someone who wants to have roughly the same level of consumption across your entire life would ____________________________________________.
borrow while in college, she while working, and disease while old
Without private property, you wouldn't be able to ________________________________________. (Note: this is taken from the Q&A from the James Stoner lecture, but you should be able to figure it out based on what we discussed in class on 10/18).
buy a friend a drink
In a 1983 commercial for Miracle Whip, a guy gathers a tomato, Swiss cheese, and other ingredients for a sandwich. He was dismayed to learn that their jar of Miracle Whip was empty, so he put everything back and walked away. This suggests that sandwich ingredients and Miracle Whip are ____________________________, and a lower price for Miracle Whip will lead to ____________________________________ demand for sandwich ingredients.
complements, higher
A board foot of lumber costs $6 to produce in the United States. American consumers are willing to pay $12 for it. It could be purchased for $5 on the world market. Which statement is correct?
consumers' surplus would fall if a tariff raised the world price to $7 per board foot
This can of sparkling water was made in Austin, Texas in 2021. It is ________________________________________.
part of the "consumption" component of GDP
A ______________________________________ is a property right to an idea.
patent
"Rational ignorance" means ____________________________________________________.
people will generally not acquire information when the costs exceed the benefits
Early during the pandemic, we decided to get a dog. This means we have spent a lot of money on dog food, dog baths, dog treats, dog beds, and assorted other dog-related things. Our higher spending on dog-related stuff represents a ___________________________________________.
positive aggregate demand shock
Resources move toward where they have the highest value in response to __________________________________________.
prices
The graph below depicts the US market for cherries. Consider the move from free trade to a tariff. What happens?
producer surplus rises, consumer surplus falls, total surplus falls
The article on cherry tariffs you read earlier in the term mentioned that the cherry producers had spent a few million dollars trying to get the tariffs passed. From the perspective of the cherry producers, this is _____________________________. From the perspective of society as a whole, it is ___________________________________.
productive, wasteful
The federal government imposes a $1 per unit tariff on canned mackerel imported from abroad. In response, more Americans switch out of producing other things (like oranges, catfish, or economics classes) and into producing canned mackerel. In light of what you know about the effects of tariffs, these resources redirected into mackerel production represent __________________________________. Here's a picture of the market for cherries to help you; just replace "cherries" with "mackerel" and the logic is the same.
resources wasted over-producing mackerel in the United States
In 1706, King Philip V of Spain "rescinded the postal monopoly of the Velez de de Guevara family." This made the market for mail delivery in Spain more competitive and open until 1716, when "the postal service became a centralized public service directly dependent on the Crown." Accordingly, we would expect gains from trade in the market for mail delivery to __________________________ after the market became competitive and open in 1706 and _________________________ after it was rendered uncompetitive and closed in 1716.
rise, fall
If labor becomes more productive, demand for labor will __________________________________ and wages will ____________________________________.
rise, rise
If the price of cedar is below the equilibrium price, prices will ________________________________ because there is a ____________________________________.
rise; shortage
As a country adds capital goods, output __________________________ at a ___________________________ rate.
rises, falling
In the short run, real economic growth ______________________ and inflation _________________________ in response to a positive aggregate demand shock.
rises, rises
Suppose a hurricane hits Mobile and leaves massive destruction behind. The "signal flares" that would encourage suppliers to redirect gasoline, bottled water, plywood, and other supplies to Mobile and that would discourage demanders on the other side of the planet in Melbourne from using as much gas would be __________________________________.
rising prices
Writing long-term contracts in an environment with stable, predictable inflation is _________________________________________ writing long-term contracts when inflation is unstable or unpredictable.
safer than
Your friend Lisa says the following: "Economics is that it assumes people are 'rational,' but compare how much money a big movie star makes to what the your preacher makes. Is it 'rational' that people think amusement and entertainment are more important than the ministry of God's word?" What mistake is Lisa making?
she isn't thinking at the margin
In the __________________________ run, prices are sticky. In the ___________________________________ run, prices are flexible.
short, long
As of Wednesday, October 27, 37 out of about 120 students in Econ 201 had watched the "what is Gross Domestic Product?" video that was assigned a few weeks earlier. This is consistent with the _____________________________________ model of the returns to schooling.
signaling
Which theory of the returns to investment in schooling best explains why students cheat?
signaling
A "recession" is a(n) _______________________________________________.
significant, widespread reduction in employment and output
A student who prepares diligently for every class meeting, gets a good night's sleep every night, and asks questions in office hours is acting in ways consistent with the ________________________________________ model of the rewards to schooling.
skill-building
Human capital means ________________________________________.
skills
Since there will be no extra credit opportunities in Econ 201 this term, I have ________________________________ incentives to study carefully for the next exam.
stronger
In the 1980s, US sugar prices were so high that it was cheaper for American firms to purchase high sugar "iced tea" (note the quotation marks) manufactured in Canada and then extract the sugar for use in the United States in order to avoid sugar tariffs and regulations. This represents _____________________________________________.
superfluous discovery of a way to enjoy gains from trade
Speculators who believe the prices of cherries will be higher next year than this year can create wealth by ___________________________________.
taking cherries off the market now and then selling them later
There are a lot of military bases across the United States that should probably be closed because the cost to Americans as a whole exceeds the benefits to Americans as a whole. Military bases are difficult to close, however, because _______________________________________.
the benefits are concentrated and the costs are dispersed
Jambavantha is trying to decide whether or not to get a milkshake with her meal at Chick-fil-a. Buying a combo meal with a milkshake is $8. Buying just a sandwich and fries would cost $7. Buying just a milkshake would cost $2.99. Jambavantha should add the milkshake if __________________________________.
the milkshake is worth at least $1 to him
Suppose the money growth rate has risen. This means ____________________________________________________________.
the new money does not change the amount of goods and services available
"Voluntary exchange of private property and free labor in a society governed by the rule of law and an ethical consensus" describes __________________________________. communism socialism the other options are incorrect fascism
the other options are incorrect
The factors determining the economy's long-run potential growth rate include ______________________________________. I. spending growth II. factors of production III. inflation I only I,ii, and iii only I and iii only the other options are incorrect
the other options are incorrect
The graph below depicts the market for studio apartments. What happens, ultimately, as a result of a price ceiling?
the price ceiling creates an economic rent for demanders, bu tit disappears as people trade wastefully to get the limited number of apartments
When you pay interest on a loan, you are paying for ___________________________________________.
the right to use someone else's money right now
In a 2021 study of how the civil war in Syria and the subsequent refugee crisis affected the labor market in nearby Jordan, an economist estimated that the refugee influx reduced wages in Jordan. This suggests that ___________________________________.
the supply of labor rose by more than demand
Suppose the equilibrium quantity is 230 million hours of labor. What is true about every hour of labor above 230 million?
the value of the best alternative to working is higher than the value of what that hour could produce
If the people in a society spend each dollar more frequently, what has changed?
the velocity of money
Without private ownership of the means of production, ______________________________________.
there are no meaningful prices for the means of production, and rational economic calculation is impossible
Which is the best way to encourage people to develop new ideas? there isn't one. of these options, they all have different costs and benefits subsidies patents prizes
there isn't one. of these options, they all have different costs and benefits
In a well-functioning, dynamic economy that embraces creative destruction, which statement is true?
there will always been some people who are frictionally and structurally unemployed
As I write this, my younger son and one of his friends are in our kitchen making rock candy to sell at their school's bazaar. Which statement is true?
they are adding value that is not counted in GDP and doing work the tis not counted in the unemployment statistics
These are shrimp dumplings from a Chinese restaurant in Arlington, Virginia in September 2021. Which statement is true?
they are counted in 2021 GDP because they are finished goods
As you take this, there are probably a lot people working to make the salsa people will eat while watching college football on Saturdays. They are hard at work because _________________________________________.
they are getting paid for it
What is the main reason Amazon pays its workers something rather than nothing?
they compete with other firms in the labor market
How do "intermediates" create value?
they reduce transaction costs and make it easier for assets to move from lower-value to higher-value uses
A local economist who shall remain nameless was offered the opportunity to participate in a pro football pool with an entry fee of $20: whoever was best at identifying winning teams would earn 70% of the combined entry fees. The economist declined, saying that it would be easier and more efficient to light $20 on fire than to devote time and energy to predicting football winners. Suppose the economist lit $20 on fire whenever an invitation like this arrived. What would happen to the general level of prices throughout the economy? Think back to the Big Ideas in economics.
they would fall
In a recent email thread, Samford economists were trying to coordinate transportation to a seminar at UAB. Dr. Piano said she would drive separately so she could go home quickly and walk her dog (pictured). Dr. Piano's decision to prioritize time with her dog over time in a car with her colleagues exemplifies which big idea in economics?
thinking at the margin
For pretty much all of history and across pretty much all species, "outsiders" have tended to be seen as __________________________________________.
threats
Compared to Keynesians, monetarists want policymakers ___________________________________________.
to be bound by rules
My dad paid a monthly fee to rent his storage unit, which is owned by a publicly-traded company (you can buy stock in it). Some of this went to pay the manager on duty. This is ___________________________. Some went to pay for the leased land. This is ________________________________. Some was paid to the savers who lent the company the money to pay for the facility. This is ___________________________________. The rest of it went to the company's stockholders. This is ________________________________.
wages, rent, interest, profit
If a society is producing more than the equilibrium quantity of cedar, it is ____________________________________.
wasting resources
Wisconsin congressional representative "Monterey" Jack Roquefort represents a district with a lot of dairy farmers. He has _______________________________________ incentives to consider how his proposed Milk Price Support Bill affects all consumers and producers.
weak
In a special filing at 2:00 PM on October 6, The Department of Health and Human Services posted a draft of a document entitled "Ensuring Access to Equitable, Affordable, Client-Centered, Quality Family Planning Services." On page 52 of the 124 page document, readers learned that "In the NPRM, the Department proposed revising section 59.5(a)(3) of the 2000 regulations." Samford students have __________________________ incentives to know exactly what "revising section 59.5(a)(3) of the 2000 regulations" entails. Attorneys for abortion service providers have _______________________________ incentives to know exactly what "revising section 59.5(a)(3) of the 2000 regulations" entails.
weak, strong
Rising production of solar panels and electric cars suggest there might be increased demand for silver in the future. If you think the price of silver will rise, which strategy would move resources from lower to higher-value uses?
withhold silver from the market now and sell it later when he price is higher
Given their likely effect on your day-to-day life, spending hours poring over the details of the Nuclear Regulatory Commission's Updates on the Export of Deuterium posted in the Federal Register recently _________________________________________.
would have been a poor use of time compared to studying for this exam because my exam grade affects me clearly, visibly, and directly while deuterium export regulations don't
Would you like full credit for this question?
yes
