Macro ECONOMICS Bishop

Which of the following is most likely to be an inferior good?

Used clothing.

Some states have started giving tax credits to homeowners who install solar panels. This is an example of:

Using the incentive principle to encourage homeowners to switch to solar energy.

A supply schedule shows:

how many units producers are willing and able to sell at various prices.

The supply curve shows:

how the quantity produced varies with price.

A country may have a comparative advantage in the production of cars if:

it has the natural resources needed to produce steel.

Each point on the supply curve shows the:

quantity supplied at that price.

A change in which of the following variables does not cause a change in demand?

prices of unrelated goods

As a result of an increase in a product's price:

product supply does not change, but quantity supplied increases.

A graph that illustrates the maximum amount of one good that can be produced for every possible level of production of the other good is called a(n):

production possibilities curve.

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen. Data for their sales last month are shown in this table: SALESMAN CARS SOLD TRUCKS SOLD Larry 10 5 Joe 9 9 Ralph 3 12 For Joe, the opportunity cost of selling a truck is:

1 fewer cars sold.

Corey can make 12 Pizzas per hour or deliver 6 pizzas per hour. Pat can make 10 Pizzas per hour or deliver 15 pizzas per hour. Corey's opportunity cost of the production of an extra pizza is the delivery of ______ pizza(s).

1/2

Lou and Alex live together and share household chores. They like to cook some meals ahead of time and eat leftovers. Suppose that in one hour Lou and Alex can do the following: CHORE ALEX LOU Whole Hour Cleaning 3 rooms 5 rooms Whole Hour Cooking 3 meals 4 meals 1/2 hour, Each Chore 1.5 rooms; 1.5 meals 2.5 rooms; 2 meals

1; 4/5

Corey can make 12 Pizzas per hour or deliver 6 pizzas per hour. Pat can make 10 Pizzas per hour or deliver 15 pizzas per hour. Corey's opportunity cost of the delivery of an extra pizza is the production of______ pizza(s).

2

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen. Data for their sales last month are shown in this table: SALESMAN CARS SOLD TRUCKS SOLD Larry 10 5 Joe 9 9 Ralph 3 12 For Larry, the opportunity cost of selling a truck is:

2 fewer cars sold.

Corey can make 12 Pizzas per hour or deliver 6 pizzas per hour. Pat can make 10 Pizzas per hour or deliver 15 pizzas per hour. Pat's opportunity cost of the delivery of an extra pizza is the production of _____ pizza(s).

2/3

Corey can make 12 Pizzas per hour or deliver 6 pizzas per hour. Pat can make 10 Pizzas per hour or deliver 15 pizzas per hour. Pat's opportunity cost of the production of an extra pizza is the delivery of______ pizza(s).

3/2

Which of the following are reasons why most owners of companies want their employees to act ethically?

A.Because they care about the well-being of their customers B.To enhance productivity C.To maximize public good will toward the company D.To avoid large fines and expensive lawsuits E.All the above are reasons why.

Which of the following is not likely to be an inferior good for most Americans?

A.Thrift store clothing. B.Wine in a box. C.Intercity bus travel. D.Store brand canned vegetables. E.All of the above are likely to be inferior goods for most Americans.

In general, individuals and nations should specialize in producing goods _________ other individuals or nations

for which they have a lower opportunity cost compared to

A free market lacking clear ethical rules, adequate oversight and meaningful punishments for rule breakers might suffer

A.decrease in market demand. B.decrease in market supply. C.decrease in equilibrium price. D.total market collapse. E.all of the above.

A decrease in consumer incomes will:

A.decrease the demand for an inferior good. B.decrease the supply of an inferior good. C.increase the demand for a normal good. D.increase the supply of a normal good. E.do none of the above.

If two countries specialize and trade, the country that benefits will be

Both countries will benefit.

Which of the following is true of a competitive market?

Buyers and sellers have little market power.

Application of the Principle of Comparative Advantage leads to:

greater specialization of labor and other factors of production

When there is an excess quantity supplied of a product at the current price, then:

C.the market price must be above equilibrium price. D.the market price will tend to fall. E.both c. and d. will occur.

Which of the following statements is always true?

Comparative advantage does not require absolute advantage

Which of the following questions would not be answered in macroeconomics?

Did the sharp increase in gasoline prices alter SUV sales?

Which of the following would break a positive ethic?

Driving two miles per hour over the speed limit

Curly used his frequent flyer miles to fly to visit Moe. Curly told Moe that it didn't cost him anything to visit. Is Curly correct?

No, because Curly could have used his frequent flyer miles to go somewhere else, but chose to visit Moe

Every time you go to the grocery store, you try to choose the shortest line. But all of the lines always seem to be the same length. Why?

Everyone else is trying to choose the shortest line too.

If an increase in the price of Good X causes a decrease in the demand for Good Y, we can conclude that:

Goods X and Y are complements.

The last time gas prices increased drastically, sales of large Sport Utility Vehicles (SUVs) fell. What economic reason would explain this decrease in sales?

Higher gas prices increased the cost of owning a SUV.

Which of the following is true?

If input prices fall, this will lower the costs of production, causing the supply curve to shift to the right.

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen. Data for their sales last month are shown in this table: SALESMAN CARS SOLD TRUCKS SOLD Larry 10 5 Joe 9 9 Ralph 3 12 ________ has an absolute advantage in selling cars and __________ has an absolute advantage in selling trucks.

Larry; Ralph

If Leslie can produce two pairs of pants in an hour while Eva can make one pair an hour, then it must be the case that:

Leslie has an absolute advantage.

Lou and Alex live together and share household chores. They like to cook some meals ahead of time and eat leftovers. Suppose that in one hour Lou and Alex can do the following: Alex and Lou have worked out an efficient arrangement. Under that arrangement: CHORE ALEX LOU Whole Hour Cleaning 3 rooms 5 rooms Whole Hour Cooking 3 meals 4 meals 1/2 hour, Each Chore 1.5 rooms; 1.5 meals 2.5 rooms; 2 meals

Lou does all of the cleaning, while Alex does all of the cooking.

Lou and Alex live together and share household chores. They like to cook some meals ahead of time and eat leftovers. Suppose that in one hour Lou and Alex can do the following: Which of the following is true? CHORE ALEX LOU Whole Hour Cleaning 3 rooms 5 rooms Whole Hour Cooking 3 meals 4 meals 1/2 hour, Each Chore 1.5 rooms; 1.5 meals 2.5 rooms; 2 meals

Lou has a comparative advantage over Alex in cleaning.

Maria can produce 100 pounds of tomatoes or 25 pounds of squash in her garden each summer, while Tonya can produce 50 pounds of tomatoes or 25 pounds of squash. ______________ opportunity cost of producing tomatoes is lowest, and ___________ opportunity cost of producing squash is lowest, so __________ should produce tomatoes and ____________ should produce squash.

Maria's, Tonya's, Maria, Tonya

If the price of music downloads decreases, which of the following is most likely to occur?

Quantity demanded will increase.

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen. Data for their sales last month are shown in this table: SALESMAN CARS SOLD TRUCKS SOLD Larry 10 5 Joe 9 9 Ralph 3 12 ______ should specialize in truck sales, and ______ should specialize in car sales.

Ralph; Larry

If Scout has an absolute advantage over Dill:

Scout can accomplish more in a given period of time than can Dill.

Which of these conditions are most likely to motivate honest people to become corrupt?

Seeing your boss and fellow workers get rich by lying and cheating

Which of the following people are more likely to break ethical rules

Someone who is ignorant

Which of the following would shift a supply curve to the right?

Subsidies

In free markets which allows a high level of unethical corruption:

Suppliers may be forced to be corrupt or to leave the market

How will a decrease in price tend to affect supply?

Supply will not change.

Which of the following statements is TRUE?

The U.S. government defines and enforces business ethics in order to protect the economy

During times of high unemployment, colleges often observe an increase in enrollment even if tuition remains unchanged. Why?

The opportunity cost of attending college is lower because students are less likely to have good full-time jobs.

If the price of ice cream increases and the quantity demanded decreases, economists would describe this as:

a change in quantity demanded

Effective free market ethical systems must provide for all of the following EXCEPT:

a clearly defined moral foundation.

If Econlandia can only trade with one other country, it should trade with

a country with very different comparative advantages than Econlandia.

Sellers who were originally willing to supply 800 units of a good at $4 per unit are now willing to supply 600 units at $4 per unit. That change would be described as:

a decrease in supply.

The incentive principle is an example of:

a positive economic principle.

Buyers who were originally willing to buy 800 units of a good at $4 per unit are now willing to buy 1200 units at $4 per unit. That change would be described as:

an increase in demand.

Which of the following would be most likely to cause a reduction in the supply of Nintendo video games?

an increase in the price of computer chips used to make Nintendo games

Which of the following would NOT cause a change in the supply of milk?

an increase in the price of milk

Which of the following would not shift the supply curve for swordfish?

an increase in the price of swordfish

An economic naturalist is described as someone who:

applies economic insights to everyday life.

The United States was unable to maintain its dominance in the production of televisions because:

automated production allowed production to be outsourced to countries with less-skilled workers.

To say that an individual possesses an absolute advantage in the production of software means that individual:

can produce more and/or higher quality software in a given amount of time.

The number of US households with access to the Internet and those with broadband connections is growing rapidly. As an economic naturalist, one could predict that when a major purchase is being considered, families will:

collect more information before making the purchase because the cost of finding and acquiring it is lower.

When each individual concentrates on performing the tasks and producing the goods for which he or she has the lowest opportunity cost, they are producing in accordance with the principle of

comparative advantage

If a nation has the lowest opportunity cost of producing a good, that nation has a(n):

comparative advantage.

In general, individuals and nations should specialize in producing those goods for which they have a(n):

comparative advantage.

Whenever the price of Good A decreases, the demand for Good B increases. Good A and B appear to be:

complements.

If the price of ice cream increases substantially (ceteris paribus), the equilibrium quantity of hot fudge sauce, a complement, is likely to:

decrease, and the equilibrium price of hot fudge sauce is likely to decrease.

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen. Data for their sales last month are shown in this table: SALESMAN CARS SOLD TRUCKS SOLD Larry 10 5 Joe 9 9 Ralph 3 12 Joe's opportunity cost of selling a car is ______ than Ralph's, and Joe's opportunity cost of selling a car is ______ than Larry's

less; greater

Last year interest rates fell. The field of economics that would be most concerned with this is:

macroeconomics

The impact of government policies on the building of new roads and highways would be studied in the field of:

macroeconomics.

A study that deals with the salaries of university professors would be considered:

microeconomics

By convention, there are two major divisions of economics, called:

microeconomics and macroeconomics

Studying how Pat allocates her time between teaching classes and assisting undergraduate students is an example of:

microeconomics.

More efficient positive market ethics will generally help improve all of the following challenges EXCEPT:

moral externalities of a market

In free market economies,

most market exchanges will result in all parties winning.

A market economy without any ethics would have:

no value

An editorial in the paper argues that students should only be allowed to attend school so long as the marginal cost of educating that student is less than the marginal benefit of that student's education. The writer's reasoning is an application of:

normative economics

Ethical rules based on morals or concepts of fairness are called

normative ethics

One thing that distinguishes normative principles from positive principles is that:

normative principles tell us how people should make economic decisions, and positive principles tell us how people actually do make decisions.

The difference between a change in quantity supplied and a change in supply is that a change in:

quantity supplied is caused by a change in a good's own, current price, while a change in supply is caused by a change in some other variable, such as input prices, prices of related goods, expectations, or taxes.

Production possibilities curves are downward sloping, reflecting the principle of

scarcity.

If there is a surplus, ____ will be frustrated by their inability to exchange at the current price, and they will ____ the prices as a result.

sellers; lower.

Normative economics is concerned with how people _____ make decisions while positive economics is concerned with how people _____ make decisions

should; do

A leftward shift in supply could be caused by:

some firms leaving the industry

The textbook notes that the last time a major league batter hit .400 was in 1941. This is because:

specialization by pitchers, infielders, and outfielders has made it harder for batters to hit.

Whenever the price of Good A increases, the demand for Good B increases as well. Good A and B appear to be

substitutes.

The market supply schedule reflects the total quantity:

supplied at each price by all of the producers.

When there is an excess quantity demanded of a product at the current price, then:

the price will tend to rise.

Corey can make 12 Pizzas per hour or deliver 6 pizzas per hour. Pat can make 10 Pizzas per hour or deliver 15 pizzas per hour. According to the data, Corey has an absolute advantage in:

the production of pizza.

Whenever there is a surplus at a particular price, the quantity sold at that price will equal:

the quantity demanded at that price.

Ceteris paribus, if the vacancy rate in an apartment complex increased from 5% to 20% over the past two years, we would expect to see

the rent decrease leading to an increase in quantity demanded.

Which of the following does not specify positive ethical rules?

webster dictionary

For a given good, the market demand curve is generally ____ than the demand curves for the individual consumers

wider

In economics, the demand for a good refers to the amount of the good people:

will buy at various prices.

According to the Low-Hanging-Fruit Principle, in expanding production of a good, you should first employ those resources

with the lowest opportunity cost.

Having a comparative advantage in a particular task means that:

you give up less to accomplish that task than do others.

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen. Data for their sales last month are shown in this table: SALESMAN CARS SOLD TRUCKS SOLD Larry 10 5 Joe 9 9 Ralph 3 12 For Ralph, the opportunity cost of selling a truck is:

1/4 car not sold.

At the individual level, comparative advantage results from

A.differences in education or training. B.cultural differences. C.language differences. D.the amount of resources available. E.all of the above.

At the equilibrium price for gasoline:

A.everyone with the desire and the income to buy gasoline at that price can do so. D.all sellers willing and able to sell gasoline at that price can do so. E.both a. and d. are correct.

Ethics

A.is a branch of philosophy. B.are moral rules or standards governing human conduct. C.are rules or standards governing human conduct, but not necessarily moral rules. D.the moral principles of an individual person. E.can be defined in any of the ways above

Plagiarism is unethical because

A.plagiarism might result in stealing profits from the original writer B.plagiarism can decrease the value of honest students' diplomas C.plagiarism can make it more difficult for instructors to assess the quality of students' writings D.plagiarism is a type of fraud E.all of the above are reason

The difference between a change in quantity demanded and a change in demand is that a change in:

A.quantity demanded is caused by a change in a good's own current price, while a change in demand is caused by a change in some other variable, such as income, tastes, or expectations.

To an economist, a decrease in supply means a:

A.rightward shift of the supply curve. B.movement up along a supply curve. C.downward shift of the supply curve. D.movement down along the supply curve. E.none of the above

Ethics violators like embezzlers, frauds, tax cheats and bank robbers

A.usually follow most rules and other ethics most of the time. B.not only injure individuals and companies, but also often hurt entire markets. C.often use rational cost-benefit analysis when deciding whether to cheat. D.may feel so ashamed and guilty of their crimes that they are driven to suicide. E.All of the above may be true of ethics violators.

Which of the following is the correct way to describe equilibrium in a market

At equilibrium, quantity demanded equals quantity supplied.

Several years ago there were two systems for viewing movies at home: Sony's BetaMax machines and VCR machines that played VHS tapes. Despite the higher quality of BetaMax video, VHS became the dominant format. Once VHS tapes were the dominant format, BetaMax virtually disappeared from consumer markets. Why?

Consumers gained more benefit by using the same system that others used, allowing them to share movies

Ginger and Maryann are lost in the jungle, where the only things to eat are mangoes and fish. Ginger can gather mangoes faster than Maryann and can also catch more fish per hour than can Maryann. Therefore:

Maryann should specialize in the activity for which she has a comparative advantage.

Suppose there are two parallel highways between two cities with approximately equal traffic. What would you expect to happen if the state began charging tolls to drive on one of those highways?

More drivers would drive on the non-toll road, making the toll road less congested.

A surplus currently exists in the market for apples. Which of the following statements is correct?

The quantity of apples supplied exceeds the quantity demanded and the market price is above the equilibrium price.

A shortage currently exists in the market for strawberries. Which of the following statements is correct?

The quantity of strawberries demanded exceeds the quantity supplied and the market price is below the equilibrium price.

Interpret the following statement: "Demand exceeds the available quantity of apartment housing. If the price of apartment rentals were increased, demand would decrease and an equilibrium could be achieved."

The statement is incorrect because it confuses "demand" with "quantity demanded."

Which of the following are NOT very important to maintaining effective market ethics?

Whether people understand the reasons for the rules or regulations

Which of the following would not be analyzed in microeconomics?

Whether the federal budget should always be balanced

Which of the following would increase the quantity of LCD TVs demanded but would not increase the demand for LCD TVs?

a decrease in the current price of LCD TVs

Which of the following will not increase the demand for iced tea?

a decrease in the price of iced tea

The United States generally has a comparative advantage in the development of technology because of:

a high concentration of the best research universities

Assume the demand schedule for cookies is downward sloping. If the price of cookies falls from $2.50 to $2.25 per dozen:

a larger quantity of cookies will be demanded.

Which of the following would be least likely to affect the supply of automobiles?

a successful physical fitness plan encouraging Americans to walk rather than drive to their destinations

If a nation can produce a good more quickly than any other nation, that nation has a(n)

absolute advantage

Jane can produce 50 pizzas or 100 hamburgers per day, while Sam can produce 30 pizzas or 90 hamburgers per day. Jane has an

absolute advantage in the production of hamburgers and pizzas, as well as a comparative advantage in the production of pizzas.

If Jane can produce 3 pairs of shoes hourly, while Bob can produce 2, then one can infer that the __________ advantage belongs to __________.

absolute; Jane

If a country experiences increasing opportunity costs, its production possibilities curve will

bow outward.

In order for a market's ethics to be effective, all of the following must occur, EXCEPT

everyone must agree to take part in the market.

Cost-benefit analysis can determine the optimal amount of all the following EXCEPT

fairness of rules

Larry has a comparative advantage in writing a term paper if he:

has the lowest opportunity cost for writing a term paper.

If the government wanted to use the incentive principle to discourage smoking, it could:

increase taxes on cigarettes, effectively raising the price.

A shortage exists in the market for corn at the prevailing price. The shortage can be eliminated by a price:

increase, increasing the quantity supplied and decreasing the quantity demanded.

The demand schedule for a good:

indicates the quantities that will be purchased at alternative market prices

The law of demand refers to the:

inverse relationship between the price of a good and the quantity demanded.

The law of demand illustrates a(n) ____ relationship between price and ____

inverse; quantity demanded

Positive economic principles are those that:

predict how people will behave

If we know someone pays all their taxes and gives money to charity, we know that

only that they pay their taxes and give money to charity

According to the incentive principle:

people tend to do more of something when the benefits are greater.

Corey can make 12 Pizzas per hour or deliver 6 pizzas per hour. Pat can make 10 Pizzas per hour or deliver 15 pizzas per hour. Based on their comparative advantages, Pat should specialize in _______ while Corey should specialize in _______.

pizza delivery; pizza production

Along a supply curve:

quantity supplied changes as price changes.

An upward-sloping supply curve shows that:

suppliers are willing to increase production of their goods if they receive higher prices for them.

Which of the following is not a determinant of supply?

tastes

The core principle that is illustrated by the production possibilities curve is:

the Scarcity Principle.

The incentive principle states that a person is more likely to do something if:

the benefits from doing it increase.

The production possibilities curve is:

the boundary that divides all production combinations into attainable ones and unattainable ones.

With ATMs, it is possible to retrieve cash from the bank at any time. One hundred years ago, one could only get cash from the bank during business hours, say, 9 am to 3 pm. The difference has arisen because:

the cost of providing 24-hour service is much lower today.

Assume that coffee and tea are substitutes for each other. If weather conditions cause a substantial portion of the available coffee crop to be destroyed, then most probably:

the demand for tea will increase.

If the price of tennis rackets were to increase, we would expect:

the demand for tennis balls to decrease

Which of the following is the basis for an argument against free trade?

the distribution of the benefits from trade

The quantity of a good bought and sold in a market will be below the equilibrium quantity if:

the market price is either above or below the equilibrium price

The production possibilities curve shows:

the maximum production of one good for every possible production level of the other good.