Econ Final
Depreciation is the _____ in the value of _____ that results from its use and from obsolescence
Depreciation is the decrease in the value of capital that results from its use and from obsolescence.
The opportunity cost to produce 1 pretzel for Mark is 2 cookies. For Jessica, the opportunity cost to produce 1 pretzel is 3 cookies. From this information, we know that
Mark has a comparative advantage in pretzel production.
Which of the following illustrates scarcity? Scarcity is the condition that arises because wants exceed the abilities of resources to satisfy them.
Megan wants to buy a CD that costs $25 but has only $10 to spend.
Net exports of goods and services is the value of _____ of goods and services _____ the value of _____ of goods and services.
Net exports of goods and services is the value of exports of goods and services minus the value of imports of goods and services.
During a year, a firm's net investment is $6,400 and depreciation is $1,600. What is the firm's gross investment?
The firm's gross investment is ______. 8,000
The expenditure approach to measuring GDP sums together ______, and the largest component is ______.
consumption expenditure, investment, government expenditure on goods and services, and net exports; consumption expenditure
The resources that are used to produce goods and services - _____ are factors of production.
land, labor, capital, and entrepreneurship
Imports of goods and services are items that _____ in the United States _____ the rest of the world.
imports of goods and services are items that households, firms, and governments in the United States buy from the rest of the world.
Producers of pianos expect the population to increase and the number of firms producing and selling pianos to decrease. You predict that the price of a piano will ______ and the quantity of pianos bought will ______.
rise; increase, decrease or remain the same
Flights to Paris are a normal good and people's incomes rise. At the same time, the price of jet fuel rises. The equilibrium price of a flight to Paris ________ and the equilibrium quantity of flights to Paris________.
rises; might increase, decrease, or not change
A decrease in the demand for golf clubs brings a______ of golf clubs at the original price and the market price will______ .
surplus; fall
An assumption of neoclassical growth theory is that
technological change is random.
Exports of goods and services are items that firms in _____ produce and sell to _____.
the United States; any other country
Russell studies instead of playing tennis. The opportunity cost to him of studying is
the forgone value of playing tennis.
In any year, real GDP
might be greater or less than potential GDP.
The _____ that people devote to produce goods and services is labor.
work time, and work effort
____ are examples of goods and _____ are examples of services.
Shoes; haircuts
A decrease in the supply of golf clubs brings a______ of golf clubs at the original price and a______ in their price
Shortage ;rise
In an hour, Simon can catch 5 pounds of tuna or pick 10 pounds of strawberries. In an hour, John can catch 3 pounds of tuna or pick 12 pounds of strawberries. The opportunity cost of catching a pound of tuna is ______ for Simon than for John, and the opportunity cost of picking a pound of strawberries is ______ for Simon than for John.
lower; higher So ______ has a comparative advantage in producing ______. Simon;tuna
In 2016, a country's exports were $1,847 billion and imports were $2,557 billion. What was the value of net exports?
-710
A decrease in the demand for donuts and a decrease in the supply of donuts occur together. What is the effect on the price and quantity of donuts?
A decreasein the demand for donuts together with a decrease in the supply of donuts ______ create a surplus or a shortage of donuts at the original price. The equilibrium price of donuts ______. A. might; might fall, rise, or not change The equilibrium quantity of donuts decreases
The price of a bag of corn chips is $3, and the price of a bottle of soda is $1. What is the relative price of a bag of corn chips?
3 bottles of soda
At one point along a PPF, 10 pizzas and 7 sandwiches can be produced. At another point along the same PPF, 9 pizzas and 10 sandwiches can be produced. The opportunity cost of a pizza between these points is ________ per pizza.
3 sandwiches
Blank DVDs and prerecorded DVDs are substitutes in production. An increase in the price of a blank DVD will lead to
A decrease in the supply of prerecorded DVDs
A final good is _______. An example of a final good is _______.
A final good is an item that is bought by its final user during a specified time period. An example of a final good is bread sold to a consumer
When people's incomes increase, the demand for a good increases. The good is called
A normal good
When a timber mill makes logs from trees it also produces sawdust, which is used to make plywood. a. Explain how a rise in the price of sawdust influences the supply of logs. b. Explain how a rise in the price of sawdust influences the supply of plywood.
A rise in the price of sawdust _________. increases the supply of logs A rise in the price of sawdust _______. decreases the supply of plywood
An incentive is a reward or a penalty that encourages or discourages an action Which of the following is an example of an incentive?
All conference volunteers would be offered free lunch on all three days.
An intermediate good is _________. An example of an intermediate good is _______.
An intermediate good is an item that is produced by one firm, bought by anotherfirm, and used as a component of a final good or service. Wheat sold to a baker to make bread is an example of an intermediate good.
Which of the following news headlines does not illustrate the potential for conflict between self-interest and the social interest?
Chanel haute couture show attracted the choicest front row crowd
Which of the following is an example of investment?
Continental buying Airbus planes
Which of the following is an example of a final good or service?
Dan bought a Toyota Camry.
Economics is the _____ the choices that individuals, businesses, governments, and entire societies make as they _____, and the influences on those choices, and the arrangements that coordinate them
Economics is the social science that studies the choices that individuals,businesses, governments, and entire societies make as they cope with scarcity,and the influences on those choices,and the arrangements that coordinate them
Which of the following news headlines does notdeal with scarcity?
Expect more extreme and unusual weather
GDP equals aggregate income and also equals aggregate expenditure because _______.
GDP equals aggregate income and also equals aggregate expenditure because total production can be measured as the cost of the factors of production employed or as the sum of expenditure on the goods and services produced. Firms pay out as incomes everything they receive from the sale of their output
If Geoffrey and Hermione devote equal amounts of time and effort to making pretzels, Geoffrey produces more units than Hermione. This information tells us that
Geoffrey has an absolute advantage in producing pretzels.
Land is the _____ that we use to produce goods and services.
Gifts of nature or natural resources
Gross domestic product is
Gross domestic product is the market value of all the final goods and services produced within a country in a given time period.
Homer and Teddy are stranded on a desert island. To feed themselves each day they can either catch fish or pick fruit. In a day, Teddy could pick 60 pieces of fruit or catch 20 fish. Homer could pick 100 pieces of fruit or catch 150 fish. Which of the following statements is correct?
Homer has an absolute advantage in both catching fish and picking fruit.
____, is an example of a choice in the self-interest. _____, is an example of a choice in the social interest.
I buy pizza for lunch; I am collecting funds to help the flood victims
Which of the following is TRUE regarding business cycles? I. Cycles are predictable. II. In each cycle, a peak follows an expansion. III. Potential GDP fluctuates around real GDP.
II ONLY
Which of the following pairs does not match?
Labor does not earn profit. Land earns rent. Labor earns wages. Capital earns interest. Entrepreneurship earns profit
In calculating GDP, household production is
Not included because there is no market transaction
Which of the following examples describes microeconomics
People prefer buying iPhones over Nokia phones.
Harry produces 2 balloon rides and 5 boat rides an hour. Harry could produce more balloon rides without producing fewer boat rides. Harry is ______ his production possibilities frontier.
Producing inside
Which of the following is an example of consumption expenditure?
Rachel buying a TV
Real GDP is the value of the _____ goods and services produced in a given year expressed in terms of the prices in _____ year. Nominal GDP is the value of the _____ goods and services produced in a given year expressed in terms of the prices of _____ year.
Real GDP is the value of the final goods and services produced in a given year expressed in terms of the prices in a base year. Nominal GDP is the value of the final goods and services produced in a given year expressed in terms of the prices of that same year.
Labor productivity is
Real GDP per hour of labor
Real GDP per person is real GDP _____.
Real GDP per person is real GDP divided by the population.
Which of the following is an example of entrepreneurship
Sam Walton created the multinational retail corporation brand Walmart in 1962.
Which of the following is an example of an intermediate good or service?
Samsung buys compressors for manufacturing refrigerators.
Which of the following illustrates an efficient outcome?
Ted cuts the price of his sausages and his profit increases.
A typical family on Sandy Island consumes only juice and cloth. Last year, which was the base year, the family spent $28 on juice and $40 on cloth. In the base year, juice was $4 a bottle and cloth was $4 a length. This year, juice is $10 a bottle and cloth is $7 a length. Calculate a. The CPI basket. b. The CPI in the current year. c. The inflation rate in the current year.
The CPI basket is 7 bottles of juice and 10 lengths of cloth CPI in current year 205.8 The inflation rate in the current year is 105.8 percent
The Rule of 70 is the number of years it takes for the level of any variable to double. It is approximately 70 _____ by the annual percentage _____.
The Rule of 70 is the number of years it takes for the level of any variable to double. It is approximately 70 divided by the annual percentage growth rate of the variable.
Which of the following examples describes macroeconomics?
The U.S. unemployment rate has increased by 0.4 percent.
The amount by which _____ is called net investment.
The amount by which the value of capital increases is called net investment.
Why does demand not change when the price of a good changes with no change in the other influences on buying plans? Consider the demand for pasta.
The demand for pasta does not change when a change in _______ occurs. The price of pasta An increase in the price of pasta _______. Decreases the quantity of pasta demanded and results in a movement up alone the demand curve for pasta
If both demand and supply increase, what will be the effect on the equilibrium price and quantity?
The quantity will increase but the price could either rise, fall, or remain the same.
A firm agreed to pay its workers $40 an hour in 2016 and $49 an hour in 2017. The price level for these years was 241 in 2016 and 245 in 2017. Calculate the real wage rate in each year (to the nearest cent). What is the real wage increase received by these workers in 2017?
The real wage rate in 2016 was 16.59. The real wage rate in 2017 was 20 The change in the real wage rate between 2016 and 2017 is 3.41
The total amount spent _____ is called gross investment.
The total amount spent both buying new capital and replacing depreciated capital is called gross investment.
Which of the following is an example of government expenditure on goods and services?
White House buying internet services
GDP is calculated by _________.
adding indirect taxes less subsidies and depreciation to total income
If macaroni and cheese is an inferior good, then a decrease in income will result in
an increase in the demand for macaroni and cheese.
A ton of coal purchased by your local utility to burn to make electricity would be best described as
an intermediate good.
The growth rate is the _____ of a variable - the change in the level expressed as a percentage of the initial level
annual percentage change
Gross domestic product and gross investment are measured ______. Net domestic product and net investment are measured ______.
before the depreciation of capital; after the depreciation of capital
Which one of the following news headlines definitely concerns the social interest?
cigarettes must be labeled with health warnings
The income approach to measuring GDP sums together ______, which equals net domestic income at factor cost.
compensation of employees, net interest, rental income, corporate profits, and proprietors' income
By specialization and trade, two individuals can
consume at a point beyond their individual production possibilities frontiers.
T-shirts and tank tops are substitutes. If the price of a T-shirt decreases, how does the demand for tank tops change?
decrease, and the demand curve for tank tops will shift leftward
New growth theory predicts that
economic growth can last indefinitely.
When a surplus arises, the price ______ to its equilibrium, which _______.
falls; increases the quantity demanded and decreases the quantity supplied
Gross domestic product (GDP) is the market value of all the _____ goods and services produced _____ a country in a given time period.
final; within
Real GDP
fluctuates around potential GDP.
When the unemployment rate ______ the natural unemployment rate, real GDP ______ potential GDP.
is less than, is greater than
Human capital _____ that people obtain from education, on-the-job training, and work experience. _____ that have been produced in the past and that businesses now use to produce goods and services is capital.
is the knowledge and skill; Tools, instruments, machines, buildings, and other items
Net domestic income at factor cost _______ indirect taxes less subsidies _______ depreciation gives GDP (income approach).
plus; plus
Domestic product is _______. National product is _______.
production within a country; the value of goods and services produced anywhere in the world by the residents of a nation
The expected price of a smartphone next year falls. What is the result of this event?
the quantity of smartphones demanded decreases
Which of the following is a macroeconomic decision or concept?
the unemployment rate for the entire economy
People come to expect that the price of a gallon of gasoline will rise next week. As a result,
today's demand for gasoline increases.
Business cycles are
unpredictable, but always have two phases and two turning points
The what, how, and for whom questions in economics are questions about ______.
what goods and services do we produce, how do we use the factors of production to produce these goods, and who consumes the goods and services that are produced
All of the following are consequences of scarcity faced by people in the United States exceptdeciding _______.
whether or not Pluto should be classified a planet
Rent is the income paid for the use of _____. Wages are income paid for the services of _____. Profit (or loss) is the _____ earned by an entrepreneur for running a business. Interest is the income paid for the use of _____.
land; labor; income; capital
