Econ study guide

At a privately owned hair salon that employs three workers, the owner's weekly costs are $1,500 in wages and $1,200 in capital and raw material (shampoo, electricity, etc.). Every week, the hair salon makes $4,000. According to radical theorists, the surplus value of $1,300 is produced by and taken from the laborers .

$1,300 laborers

The current Federal minimum wage is 1. per hour for regular employees and 2. per hour for employees earning tips. The Federal minimum wage has been the same since 3. . Consider the graph above. If the minimum wage had kept pace with productivity growth since 1968, the minimum wage would be about 4. per hour today. Which of the following statements best describes the argument presented in class about the effects of an increase in the minimum wage to $15 / hr on the labor market? 5.

1. $7.25 2. $2.13 3. 2009 4. $18 5. Both supply and demand will shift, leading to an indeterminate effect on employment

Match the significant event for radicals to its corresponding date. 1. Capital, Volume I published 2. Growing interest in democratic socialism 3. The Russian Revolution 4. Berlin Wall falls and Soviet communism ends

1. 1867 2. 2020 3. 1917 4. 1989

San Francisco increased the city minimum wage from $6.75 to $8.50, or 1. , in 2004. Consider the graph above. On the vertical axis is the total number of jobs in restaurants in the Bay Area. Based on this data, an increase in the minimum wage 2. employment in

1. 25.9% 2. had no significant impact on

Consider the diagram below with the views of our different perspectives on the economy. Select the answer that correctly identifies which perspective(s) hold each view of the government.

1. Conservatives, Liberals, and Radicals 2. Liberals and Radicals 3. Radicals only

Consider the market for hot dogs. Complete the following table by indicating whether each event will cause a movement along the demand curve for hot dogs or a shift of the demand curve for hot dogs, holding all else constant. 1. An increase in the price of hot dogs 2. An increase in the number of consumers 3. An increase in the income of consumers

1. Movement along 2. Shift 3. Shift

Match the following quotes from well-known individuals to one of the three perspectives: Radical, Conservative, or Liberal. Quote 1: "Capitalism does not permit an even flow of economic resources. With this system, a small privileged few are rich beyond conscience, and almost all others are doomed to be poor at some level. That's the way the system works. And since we know that the system will not change the rules, we are going to have to change the system." -Martin Luther King Jr., Civil Rights Leader [ Select ] ["Radical", "Liberal", "Conservative"] Quote 2: "We have been ruled by men who live by illusions...the illusion that there is some other way of creating wealth than hard work and satisfying your customers." -Margaret Thatcher, Former British Prime Minister [ Select ] ["Conservative", "Radical", "Liberal"] Quote 3: "You cannot separate the political structure from the economic structure. One has to be an idiot to believe that the average working person who's making $10,000 or $12,000 a year is equal in political power to somebody who is the head of a large bank or corporation. So if you believe in political democracy, if you believe in equality, you have to believe in economic democracy as well." -Bernie Sanders, U.S. Senator [ Select ] ["Liberal", "Conservative", "Radical"] Quote 4: "It was the labor movement that helped secure so much of what we take for granted today. The forty-hour work week, the minimum wage, family leave, health insurance, Social Security, Medicare, retirement plans. The cornerstones of middle-class security all bear the union label." -Barack Obama, Former U.S. President [ Select ] ["Liberal", "Conservative", "Radical"] Quote 5: "Capitalism demands the best of every man—his rationality—and rewards him accordingly. It leaves every man free to choose the work he likes, to specialize in it, to trade his product for the products of others, and to go as far on the road of achievement as his ability and ambition will carry him." -Ayn Rand, Philosopher [ Select ] ["Conservative", "Liberal", "Radical"] Quote 6: "Governments will always play a huge part in solving big problems. They set public policy and are uniquely able to provide the resources to make sure solutions reach everyone who needs them. They also fund basic research, which is a crucial component of the innovation that improves life for everyone." -Bill Gates, Entrepreneur

1. Radical 2. Conservative 3. Radical 4.Liberal 5. Conservative 6.Liberal

Suppose South Africa produces only trucks and camcorders. The resources that are used in the production of these two goods are specialized—that is, some inputs are more suitable for producing trucks than for producing camcorders, whereas others are more suitable for producing camcorders than trucks. The shape of South Africa's production possibilities frontier (PPF) should reflect the fact that as South Africa produces more camcorders and fewer trucks, the opportunity cost of producing each additional camcorder The following graphs show two possible PPFs for South Africa's economy: a straight-line PPF (Graph 1) and a bowed-out PPF (Graph 2).

1. since it is specialized is will increase 2. graph 2 3. Unattainable 4. Unattainable

Which of the following statements best describes the argument presented in class about the effects of an increase in the minimum wage to $15 / hr on the labor market?

Both supply and demand will shift, leading to an indeterminate effect on employment.

Liberal theory as described by John Maynard Keynes can be identified by which of the following statements?

Capitalism, along with the helpful hand of government, gives us the ideal mix of material comfort, opportunity, innovation, and growth.

The competitive equilibrium price P* is seen as fair in neoclassical economics because

Competitive markets equalize price and value, eliminating a ripoff by either the buyer or the seller

The market price of cheeseburgers in a college town increased recently, and the students in an economics class are debating the cause of the price increase. Some students suggest that the price increased because the price of beef, an important ingredient for making cheeseburgers, has increased. Other students attribute the increase in the price of cheeseburgers to a recent increase in college student enrollment. Suppose that both of the causes suggested by the students are partly responsible for the increase in the price of cheeseburgers. Based on your analysis of the explanations offered by the two groups of students, how would you figure out which of the possible causes is the dominant cause of the increase in the price of cheeseburgers?

If the equilibrium quantity of cheeseburgers decreases, then the supply shift in the market for cheeseburgers must have been larger than the demand shift.

Ceteris paribus, if BOTH the supply curve shift to the right:

It is impossible to say

Juanita is deciding whether to buy a suit that she wants, as well as where to buy it. Three stores carry the same suit, but it is more convenient for Juanita to get to some stores than others. For example, she can go to her local store, located 15 minutes away from where she works, and pay a marked-up price of $102 for the suit: Juanita makes $42 an hour at work. She has to take time off work to purchase her suit, so each hour away from work costs her $42 in lost income. Assume that returning to work takes Juanita the same amount of time as getting to a store and that it takes her 30 minutes to shop. As you answer the following questions, ignore the cost of gasoline and depreciation of her car when traveling. (Just enter the whole dollar number, no units and no cents) Local departemnt will take 15 minutes and the suit will cost 102 Across town is 30 minutes and the suit will cost 85 Neighborgh city is 60 minutes away and the fuit costs 76

Local sotre department opportunity cost is 42 and the price is 102 dollars so the total cost is 144 Across town opportunity cost is 63 and the price is 85 dollars so the total cost is 148 Neighborhood city opportunity cost is 105 and the price is 76 dollars so the total cost is 181

Citizens of Cappaconia love to wear fancy hats. Competing designers sell their hats online, where they can easily monitor the sales of their goods along with the prices they receive. This best exemplifies how a market system performs which coordination task required in the economy?

Which of the possible combinations of goods to produce

All of the following statements are true from a radical perspective. Which one expresses the idea of worker ownership?

Workers cooperatively own the businesses in which they work rather than laboring for others in exchange for a wage.

Ceteris paribus, if the demand curve shifts to the right:

price and quantity both increase

Ceteris paribus, if the supply curve shifts to the right:

price decreases and quantity increases