ECON Macro

Which of the following contributes to the efficiency of markets?

Markets are able to bring about an equitable distribution of goods and services.

What is Eva's marginal benefit if she decides to stay open for two hours instead of one hour?

$36

refer to fig. 2-6. If the economy is currently producing at point A, what is the opportunity cost of moving to point B?

12 thousand forks

Carmelita can perform either a combination of 35 manicures and 70 pedicures or a combination of 50 manicures and 45 pedicures. If she now performs 35 manicures and 70 pedicures, what is the opportunity cost of performing an additional 15 manicures?

25 pedicures

Rob Crusoe and Bill Friday spent their week-long vacation on a desert island where they had to find and prepare their own food. Rob and Bill spent one day each fishing and picking berries. The table lists the pounds of output Rob and Bill produced.

Bill has an absolute advantage in picking up berries and catching fish.

Refer to Figure 23-1. An increase in the price of the product would be represented by a movement from

D1 to D2.

___________ occurs when economic benefits are distributed fairly.

Equity

Which of the following is a normative economic statement?

Fashion designers should be allowed to copyright designs to promote innovation.

Which of the following is a positive economic statement?

If the price of gasoline rises, a smaller quantity of it will be bought

If Sweden exports cell phones to Denmark and Denmark exports butter to Sweden, which of the following would explain this pattern of trade?

Sweden has a lower opportunity cost of producing cell phones than Denmark and Denmark has a comparative advantage in producing butter.

Technological advancements have led to lower prices and an increase in the sale of color laser printers. How does this affect the market for laser printer cartridges?

The demand curve for laser printer in cartridges shifts to the left.

The term "market" in economics refers to

a group of buyers and sellers of a product and the arrangement by which they come together to trade.

A tax imposed bu a government on imports of a good into a country is called

a tariff.

What does the term "marginal" mean in economics?

an additional or extra

Which of the following will not shift the demand curve for a good?

an increase in population

Farmers can raise either goats or ostriches on their land. Which of the following would cause the supply of goats to decrease?

an increase in the price of ostriches

A successful market economy requires well defined property rights and

an independent court system to adjudicate disputes based on the law.

Productive efficiency is achieved when firms produce goods and service

at the lowest cost.

Trade that is within a country or between countries is based on the principle of

comparative advantage.

The decision about what goods and service will be produced in a centrally planned economy is made by

consumers and firms choosing which goods and service to buy or produce.

Autark is a situation in which a country

does not trade with other countries.

Domestically produced goods and service sold to other countries are referred to as

exports.

Suppose that when the price of hamburgers increases, the Ruiz family increases their purchases of hot dogs. To the Ruiz family

hamburgers and hot dogs are substitutes.

Adam Smith's ________ refers to the process by which individuals acting in their own self-interest bring about a market outcome that benefits society as a whole.

invisible hand

If the ______ cost of production for two goods is different between two countries then mutually beneficial trade is possible.

opportunity

Refer to the above diagram. A price of $20 int this market will result in a:

shortage of 100 units

Which of the following is counted as "capital" in economics?

the machines that workers have to work with

The production possibilities frontier shows

the maximum attainable combinations of two products that may be produced in a particular time period with available resources.

The unattainable points in a production possibilities frontier are

the points outside the production possibilities frontier.

By drawing a demand curve with price on the vertical axis and quantity on the horizontal axis, economists assume that the most important determinant of the demand for a good is

the price of the good.

If in the market for bananas the supply curve has shifted to the right, then

the supply of bananas supplied increased.

Refer to figure 3-5. At a price of $5

there is a shortage of 4 units.

Refer to figure 3-4. If the price is $25

there is a surplus of 300 units.

Examples of comparative advantage show how trade between two countries can make each better off. Compared to their pre-trade positions, trade makes both countries better off because in each country

total consumption of goods is greater.

scarcity refers to the situation in which

unlimited wants exceed limited resources

Which of the following generates allocative efficiency in a market economy?

voluntary exchange between buyers and sellers

Refer to figure 3-1. If the product represented is an inferior good, a decrease in income would be represented by a movement from

A to B.

________ is the ability to produce more of a good or service than competitors when using the same amount of resources.

Absolute advantage

________ a nation's production possibilities frontier represents economic growth.

An outward shift of

Assume that Australia has a comparative advantage in producing surfboards and New Zealand imports surfboards from Australia. We can conclude that

Australia has a lower opportunity cost of producing surfboards relative to New Zealand.