Macro-economics Exam 1

a) the study of how prices are determined in the baseball card industry Explanation: : Microeconomics is the study of the individual units that make up the economy, such as households and businesses. The baseball card industry is a specific industry, so this is microeconomics. The other three topics involve the broader workings of the economy and fall under the umbrella of macroeconomics.

A friend of yours has an interview with an economics consulting firm and has been asked to discuss a microeconomics topic. Which of the following topics would you recommend that your friend discuss? a) the study of how prices are determined in the baseball card industry b)how unemployment is falling in the national economy c)what the Federal Reserve will do with interest rates d)what the next president will do to stimulate the national economy

marginal thinking.

Alison goes to an all-you-can-eat restaurant. She has eaten three slices of pizza and is considering having another, but she is quite full from the first three slices. Alison's consideration is an example of? incentives. scarcity. barter. marginal thinking.

Correct! Walker

Austin, Jensen, Matthew, and Walker can all produce matches, brushes, cans, and shirts. The table below identifies how many of each good they can make in a day if they devote themselves to producing only that good. Who has the absolute advantage in producing brushes? a)Austin b)Jensen c)Matthew d)Walker

Correct! no new net investment; a steady state

Consider the Solow growth model. When the economy has reached the point of __________ it is said to have achieved __________. depreciation; convergence no new net investment; convergence no new net investment; a steady state depreciation; economic growth

Correct! the Solow growth model; the 1950s

Growth theory began with __________, which was introduced in __________. the Solow growth model; the 1950s the book An Inquiry into the Nature and Causes of the Wealth of Nations; the late 1800s the book An Inquiry into the Nature and Causes of the Wealth of Nations; the 1950s the Solow growth model; the late 1800s

Correct! on; below

If a country is producing efficiently, it will produce __________ its production possibilities curve. If a country is producing inefficiently, it will produce __________ its production possibilities curve. above; on above; below below; on on; below

Correct! tire consumers in the United States

In 2009, the United States imposed a tariff of 35% on radial car tire imports from China. The tariff caused imports of these tires to drop from 13 million tires to less than 6 million tires in one quarter, and the average price of these tires to increase by $8 per tire. Who was the primary loser from this tariff? Chinese tire producers domestic tire producers non-Chinese foreign tire producers tire consumers in the United States

Correct! It would rise.

Many goods and services are sold illegally, or sold legally but not reported to the government. If we increased efforts to count those goods and services, what would happen to GDP? It would rise. It would fall. It would stay the same.

Correct! 0; 3

Review the following graph. If Mexico produces 300 million tons of food, it can produce __________ million units of clothing without specialization or trade. Each ton of food in Mexico has an opportunity cost of __________ units of clothing. 900; 3 900; 450 0; 450 0; 3

Correct! current; positive

Suppose a resident of England buys an airplane ticket to the United States on Delta Airlines, an American company. This purchase will affect the U.S. __________ account with a __________ entry. capital; negative capital; positive current; negative current; positive

d)either watching television or studying for the test, whichever would have been her second choice after doing laundry.

Suppose a student has three hours of time to spend at her apartment before afternoon classes. She has the option of doing laundry, studying for a test, or watching television. If she decides to do laundry, then her opportunity cost is a)watching television. b)studying for the test. c)watching television and studying for the test. d)either watching television or studying for the test, whichever would have been her second choice after doing laundry.

d)Tegan should cook and Sara should clean up the kitchen.

Suppose that Tegan is good at cooking but not very good at cleaning up the kitchen afterward, and that Sara is good at cleaning kitchens but not very good at cooking. Which of the following statements is true with regard to Tegan and Sara? a)Tegan should cook and clean up the kitchen. b)Sara should cook and clean up the kitchen. c)Sara should cook and Tegan should clean up the kitchen. d) Tegan should cook and Sara should clean up the kitchen.

Correct! It lies outside the frontier.

Suppose that a politician wants to build more production facilities for solar power and wind power. At the same time, the politician is unwilling to cut any other programs. If the resources that would be used to produce the solar and wind power facilities are already being efficiently used in other programs, where is the point the politician is trying to reach located, in relation to the production possibilities frontier? It lies on the frontier. It lies inside the frontier. Correct! It lies outside the frontier. This point does not exist.

Correct Answer The PPP condition implies that the rupee has appreciated relative to the dollar.

Suppose the rate of inflation was 2 percent in India from 2008 to 2012 and, over that same period, the inflation rate in the United States was 2.7 percent. Based on these inflation trends, which of the following is true? Answer The PPP condition implies that the rupee has appreciated relative to the dollar. The PPP condition implies that the rupee has depreciated relative to the dollar. The PPP condition implies that there is no change in the exchange rate between the rupee and the dollar. You Answered The PPP condition implies that the rupee and dollar have both appreciated relative to other global currencies.

Correct! The entire PPF shifts out.

Suppose workers attend several skill-building workshops, increasing their labor productivity. How is this represented by a production possibilities frontier? a)The economy moves from a point below the PPF to a point on the PPF. b)The economy moves from a point on the PPF to a point beyond the PPF. c) The entire PPF shifts out. The entire PPF shifts in.

Correct! GDP increases by $35,000.

Suppose you build an automotive engine and sell it to the local body shop for $7,000. The shop puts the engine in a car and sells the car to a dealer for $20,000. The dealer sells the car to a customer for $35,000. Which of the following statements is true based on all of these transactions? GDP increases by $52,000. The value added is $27,000. GDP increases by $35,000. GDP increases by $15,000.

Correct! 53.67 lira

The price of a dozen roses in the United States is about $30. If $0.559 U.S. dollars can purchase 1.00 Turkish lira, how much does the same dozen roses cost in Turkey if purchasing power parity holds? 16.77 lira 30.00 lira 53.67 lira 55.90 lira

Correct! $18,637

The table here shows nominal U.S. GDP and the price level in the two years 2012 and 2018. GDP in 2018, measured in 2012 dollars, was how many billion? $14,724 $17,816 $18,637 $22,551

the united kingdom

This figure shows the United States' seven largest trading partners. Using the figure, with which of the following does the United States have a trade surplus? the United Kingdom South Korea Germany Japan

a+b

This figure shows the market for computer monitors in the United States. In this market, a quota is in place that strictly limits the number of computer monitors that may be imported by foreign producers. As shown in the graph, the quota is equal to Q Q - Q D2. Which area of the graph makes up total deadweight loss due to the quota? A + B B + C A + C F

6:2

This graph portrays the production function of a castaway's economy. The marginal product of the second ladder is __________, and diminishing marginal product sets in with ladder number __________. 6; 2 6; 3 6; 5 16; 2

the limited nature of society's resources

What is scarcity?

a)trade

What is the term for the voluntary exchange of goods and services between two or more parties? a)trade b)trade-offs c)specialization d)opportunity cost

Correct! a family member's serious illness

When a student is explaining to her academic advisor why she needs to take a semester break from school, which of the following would be an exogenous factor? a) a family member's serious illness b)the student's lack of enthusiasm for her major c)conflict between the student and two professors d)the student's difficulties maintaining an acceptable GPA

Correct! domestic producers are indifferent between an equivalent

When we look at tariffs and quotas, domestic producers would prefer tariffs over quotas. domestic producers would prefer quotas over tariffs. Correct! domestic producers are indifferent between an equivalent tariff or quota being imposed. foreign producers would prefer tariffs over quotas.

Correct! Import spending is subtracted from GDP, and export revenue is added to GDP.

Which of the following best describes the relationship between imports and exports? Import spending is added to GDP, and export revenue is added to GDP. Import spending is subtracted from GDP, and export revenue is subtracted from GDP. Import spending is added to GDP, and export revenue is subtracted from GDP. Import spending is subtracted from GDP, and export revenue is added to GDP.

competitive markets

Which of the following does NOT provide the right incentives for economic growth? private property rights efficient taxes You Answered political instability competitive markets

Correct! They prevent competition from taking place.

Which of the following is a disadvantage of trade restrictions? They allow firms to exercise a comparative advantage. They prevent inefficient firms from producing. Correct! They prevent competition from taking place. They allow companies to achieve economies of scale.

Correct! A developing nation will lose in international trade because it subjects its producers to greater competition.

Which of the following is a false statement? A developing nation can gain from international trade because it subjects its producers to greater competition. A developing nation will lose in international trade because it subjects its producers to greater competition. A developing nation can gain from international trade because it can take advantage of increasing returns to scale due to being able to produce larger amounts of the particular good. A developing nation can gain from trade, because it gets better access to the greater variety of goods produced abroad.

Correct! national defense

Which of the following is a reason sometimes given for trade barriers? consumer protection interest rate stability national defense natural monopolies

Correct! The average rainfall in August 2016 was 5 inches nationwide.

Which of the following is an example of a positive economic statement? -Congress should devote more resources to the environment. - the poor should pay more taxes, and the rich should pay less toward Social Security. -The Kardashians should not be allowed to be on television. -The average rainfall in August 2016 was 5 inches nationwide.

Correct! Microsoft is considering buying another firm to help it expand its social media presence.

Which of the following scenarios is NOT macroeconomic in nature? Microsoft is considering buying another firm to help it expand its social media presence. The GDP of France has fallen to an inflation-adjusted low. The U.S. unemployment rate falls to 8.5% in December. The central bank of the United States increased interest rates by 0.5%.

Correct! The supply curve for a government-controlled currency is vertical.

Which of the following statements is true? A trade deficit is a sign of economic weakness. The supply curve for a government-controlled currency is vertical. Exchange rates naturally change because of government intervention. PPP always holds in the short run.

Correct! buying an expensive new leather jacket instead of saving for retirement

Which of the following would be consistent with taking the short-run approach to decision-making? -studying for an economics test instead of going to a party going to the gym instead of watching TV -eating a salad for dinner when it is your goal to eat more healthy - buying an expensive new leather jacket instead of saving for retirement

Correct! an improvement in technology for production of both pizza and wings

Which of the following would lead to the situation shown in the figure? -an earthquake in the country a reduction in the retirement age -an improvement in technology for production of both pizza and wings -a reduction in skills for workers who produce pizza and workers who produce wings

a)incentives.

You order a $20 sweatshirt online for a Father's Day gift. The shipping charge is $10. You can get free shipping if your order totals $25 or more. Consequently, you order a $5 bobble head doll, even though neither you nor your father really likes bobble head dolls. This is an example of a) incentives. b)trade-offs. c)opportunity cost. d)macroeconomics.

Correct! structural

(Q001) In his song "Allentown," Billy Joel sings about the demise of the steel and coal industries in Pennsylvania. In areas like Allentown and much of the Midwest, manufacturing was once the largest employer, but many of those jobs have disappeared as technology has changed. What type of unemployment is the song about? structural frictional cyclical

Correct! positive.

(Q002) Data on the natural rate of unemployment and actual employment are provided in the following table: Based on these numbers, the amount of cyclical unemployment in the economy is positive. negative. zero.

Correct! 2

(Q002) Government officials have hired your consulting firm to increase the demand for public transportation. They come to you with three of their suggestions.Suggestion 1. Reduce the price of public transportation.Suggestion 2. Increase the price of private transportation by increasing tolls.Suggestion 3. Offer monthly and yearly passes that reduce the price paid per ride of public transportation.Which suggestion(s) does your firm recommend? 1 2 3 1 and 3

Correct! 4%

(Q003) You have been hired to determine if unemployment is running too high. First you must determine the natural state of unemployment. You have been provided the data in the following table: Using these data, the natural rate of unemployment is 2% 3% 4% 5%

Correct! There is an increase in income and "spring shoes" are a normal good.

(Q003) You're an entrepreneur and had a great idea to sell shoes that have springs installed in them to make walking easier. However, the development costs were so high that the shoes are priced 15 times higher than shoes without springs. As a result, many of the shoes have gone unsold.What possible event could eliminate the disequilibrium in the market for shoes? A study reveals that shoes with a spring can increase the chance of a broken leg. There is an increase in income and "spring shoes" are a normal good. There is an increase in income and "spring shoes" are an inferior good. There is a decrease in the price of rubber, which is an input in the production of shoes.

Correct! The labor force decreased in size.

(Q004) In January 2008, the U.S. unemployment rate dropped to 4.9%. However, the percentage of the population that was employed also fell from the prior month. How could this have happened? The population increased in size. The population decreased in size. The labor force increased in size. The labor force decreased in size.

Correct! As the price is lowered, the quantity of rooms demanded will increase.

(Q005) As the owner of a hotel, you have decided to lower the price for all rooms in the month of October. What should you expect to happen? As the price is lowered, demand for rooms will increase. As the price is lowered, the quantity of rooms demanded will increase. As the price is lowered, the demand for rooms will decrease. As the price is lowered, the quantity of rooms demanded will decrease.

Correct! 90%.

(Q005) Using the data provided in the following table, calculate the labor force participation rate. The labor force participation rate is 5%. 5.5%. 90%. 95%.

Correct! There is an increase in the demand for fries.

(Q006) You advise the owner of a local restaurant to lower the prices of his burgers. Which of the following is a consequence of this price change? There is an increase in the demand for burgers. There is an increase in the demand for fries. More people will cook burgers at home. There is a decrease in demand for the restaurant burgers.

Correct! healthy.

(Q007) The following are data on the natural rate of unemployment and actual unemployment. The information provided reflects an economy that is healthy. in a recession. undergoing a temporary expansion.

Correct! The flip phone becomes an inferior good because the good is now perceived as lower in quality than a smartphone.

(Q007) There are a number of goods that, over time for a variety of reasons, transition from being a normal good to being an inferior good or from being an inferior good to being a normal good. One example is the flip phone. Prior to about 2010, more income for a household usually resulted in more flip phones being purchased. However, today flip phones are liable to be purchased by households that have experienced a reduction in income.How could this happen? Households have already purchased enough flip phones, so income has little impact. The flip phone becomes a normal good because the good is now perceived as lower in quality than a smartphone. The flip phone becomes an inferior good because as consumers gain purchasing power, they purchase more of the product. The flip phone becomes an inferior good because the good is now perceived as lower in quality than a smartphone.

Correct! A worker in a textile factory loses her job when manufacturing is mechanized. There are no other factories looking to hire someone with her skill set.

(Q008) Which of the following situations would not be considered frictional unemployment? A recent college graduate takes a month to gather more information about two potential job offers. A worker with ten years of experience in finance gets laid off. He has rejected three job offers because they are below his skill level. A worker in a textile factory loses her job when manufacturing is mechanized. There are no other factories looking to hire someone with her skill set. A software development firm finds the perfect employee, but waits to hire her because government regulations require them to consider other candidates before they make an offer.

Correct! an increase in the number of sellers in the market for yogurt

(Q008) Which of the following will cause an increase in the supply of yogurt? an increase in the price of yogurt an increase in the number of sellers in the market for yogurt an increase in tax on the sale of yogurt an increase in the costs of producing yogurt

Correct! graph B

(Q009) In order to ensure that as many individuals as possible install smoke detectors, the government recently decided to subsidize the production of smoke detectors.Which of the following graphs demonstrates the change in the market for smoke detectors? graph A graph B graph C graph D

Correct! A 17-year-old offers to pet-sit, but no one hires her.

(Q009) Which of the following people would be considered unemployed? A 17-year-old offers to pet-sit, but no one hires her. A college graduate spends the summer after graduation touring Europe before starting a job search. A part-time teacher is only able to work two days a week, even though he would like a full-time job. An automobile worker becomes discouraged about the prospects for future employment and decides to quit looking for work.

Correct! structural

(Q010) Creative destruction would be associated with which of the following types of unemployment? frictional cyclical structural

Correct! graph D

(Q011) Candy makers face high prices for cocoa butter, the special ingredient that gives chocolate its melt-in-the-mouth texture. Which graph depicts this event? graph A graph B graph C graph D

Correct! the government increasing the retirement age

(Q011) Which of the following situations would increase the labor force participation rate? the government increasing the retirement age more people filing for disability more people going back to school full time more people deciding to stay at home to look after their children

Correct! decrease to 6.7%

(Q012) Refer to the following table. If 4 million of those who are currently unemployed become marginally attached workers, the unemployment rate will ________. increase to 9.3% decrease to 6.7% increase to 6.7% decrease to 9.3% remain unchanged

Correct! The equilibrium price and quantity of oil will decrease.

(Q013) Businesses across the country are starting to install extra insulation in their buildings and warehouses. Households are now deciding to install more insulation as well. Which of the following outcomes would you predict for the market for oil? The equilibrium price and quantity of oil will increase. The equilibrium price and quantity of oil will decrease. The equilibrium price will decrease and quantity will increase. The equilibrium price will increase and quantity will decrease.

Correct! landscapers laid off in response to drop in new housing construction during a recession

(Q013) Which of the following would be an example of someone experiencing cyclical unemployment? someone who changes jobs to be closer to their family coal miners laid off due to EPA regulations that shut down coal-fired power landscapers laid off in response to drop in new housing construction during a recession some who is working at a ski resort and is laid off when the winter season is over

Correct! Cyclical unemployment

(Q014) ________ is the area in which policymakers can have their greatest impact. Correct! Cyclical unemployment Structural unemployment Frictional unemployment Underemployment

b)comparative advantage. FEEDBACK: Comparative advantage refers to a situation in which an individual can produce a good or service at a lower opportunity cost than another individual. The physician is specialized in dispensing medical advice. He or she would have to give up more time spent dispensing medical advice in order to fix a broken toilet than would the plumber, who specializes in fixing toilets and has a lower opportunity cost (in terms of medical advice dispensed) for this task.

A physician who hires a plumber to fix a broken toilet is an example of? a)scarcity. b)comparative advantage. c)marginal thinking. d)laziness.

Correct! The difference in output from the increase in capital from K 1 to K 2 is larger than the change in output from a change in capital from K 3 to K 4.

Based on the graph, which of the following statements is correct? The difference in output from the increase in capital from K 1 to K 2 is smaller than the change in output from a change in capital from K 3 to K 4. The difference in output from the increase in capital from K 1 to K 2 is larger than the change in output from a change in capital from K 3 to K 4. The slope of the function is always increasing. The difference in output from the increase in capital from K 1 to K 2 is the same as the change in output from a change in capital from K 3 to K 4.

Correct! technology, an exogenous change.

Consider this version of the equation for a production function: Y = A × F (labor, capital, natural resources). In the Solow model, the letter A in this equation represents the convergence rate, an endogenous change. the convergence rate, an exogenous change. technology, an endogenous change. technology, an exogenous change.

Correct! -$1.5 billion; trade deficit

Suppose South Korea imports $4 billion in goods and services and exports $2.5 billion in goods and services. South Korea's trade balance is __________. This trade balance is called a __________. $1.5 billion; trade surplus -$1.5 billion; trade deficit $2.5 billion; trade deficit -$1.5 billion; trade surplus

Correct! This is consistent with both the Solow model and modern growth theory.

Determine whether the following statement is consistent with the Solow model, modern growth theory, neither, or both:The U.S. government is hoping to increase GDP growth by building a dam on the Mississippi River. Funding construction for the dam is dependent upon efficient taxes and the rule of law. This is consistent with only the Solow model. This is consistent with only modern growth theory. Neither theory applies here. This is consistent with both the Solow model and modern growth theory.

Correct! an increase in demand and supply.

Every year, thousands of Americans travel to Mexico during spring break. They exchange millions of U.S. dollars for Mexican pesos. The Mexican central bank anticipates this and acts to keep its currency stable at the present exchange rate. These actions are consistent with a decrease in demand and supply. a decrease in demand and an increase in supply. an increase in demand and a decrease in supply. an increase in demand and supply.

Correct! Economy B, because it produces more capital goods relative to consumer goods.

Examine the two figures below. Which of these figures will experience a higher long-run growth rate, assuming their ratio of consumer goods to capital goods produced remains constant over time? a)Economy A, because it produces more consumer goods relative to capital goods. b)Economy A, because it produces more capital goods relative to consumer goods. c)Economy B, because it produces more consumer goods relative to capital goods. d) Economy B, because it produces more capital goods relative to consumer goods.

Correct! It would rise.

Suppose that nominal GDP was $1 trillion in 1967 and $2 trillion in 1977. The 1967 and 1977 price indexes were 100 and 250, respectively. Based on these numbers, real GDP increased over the 10-year span. It would rise. real GDP remained constant. real GDP increased and then decreased.

Correct! purchase of shares in Walmart

From an economist's perspective, which of the following would NOT be considered investment spending? building a new factory purchase of shares in Walmart building an apartment complex additions to inventories at a steel plant

Correct! Technological change in a country is endogenous and occurs because of factors that currently exist in that country.

How does new growth theory view technology and technological change? Technological change in a country is endogenous and occurs because of factors that currently exist in that country. Technological change is exogenous, and convergence will occur. Technological advances occur at diminishing rates. Technology is more important for growth in the short run than in the long run.

Correct! The roses are nonidentical.

If $30 can buy a dozen roses in the United States, and purchasing power parity holds, then $30 should also be enough to buy a dozen roses in Turkey--or, more specifically, the Turkish lira equivalent of $30 should be sufficient to buy a dozen roses in Turkey. Suppose purchasing power parity does not hold between the two nations, which of the following would account for a discrepancy in the price of a dozen roses? The roses are identical. The roses are nonidentical. Roses are perfectly tradable. Transportation costs are zero.

Correct! their time and knowledge

If farmers adhered to the original Solow growth model, which items would they NOT view as most important to economic growth? tractors grain storage facilities irrigation equipment their time and knowledge

Correct! It would increase.

If interest rates in India rise relative to interest rates around the world, what would happen to the world value of the rupee? It would decrease. It would increase. It would stay the same. More information is needed to determine whether the value of the rupee would rise or fall.

Correct! real per capita GDP.

If you wanted to compare economic well-being over time and across countries, the data you would use is per capita GDP. inflation. real per capita GDP. real GDP.

Correct Answer currency depreciation

In previous chapters, we learned that the primary cause of inflation is expansion in the money supply. In this chapter, we learn an additional side effect of monetary expansion. What is this effect? You Answered currency appreciation currency depreciation current account surplus current account deficit

Correct! Mangolia; Sarde; no

Suppose that the comparative-cost ratios of two products, mangoes and sardines, are as follows in the hypothetical nations of Mangolia and Sarde:Mangolia: 1 mango = 2 cans of sardinesSarde: 1 mango = 4 cans of sardinesIn this scenario, __________ should specialize in mangoes and __________ should specialize in sardines. Would a trade of 2 mangoes = 3 cans of sardines be acceptable to both nations? Mangolia; Sarde; no Mangolia; Sarde; yes Sarde; Mangolia; no Sarde; Mangolia; yes

b)four hours

Judy spent eight hours studying for an exam. Normally, she would have spent that time watching TV instead of studying. She figures she could have gotten a "B" after only studying four hours, but she really wanted an "A." What is Judy's marginal cost in terms of TV viewing to improve her grade from a "B" to an "A"? a)one hour b)four hours c)eight hours d)$8

Correct! Mike has a comparative advantage in the production of computers.

Mike has a linear production possibilities frontier that shows maximum production of trucks or computers of 10 million each. Debra also has a linear production possibilities curve that shows maximum production of 9 million trucks or 3 million computers.Based on the graphs, which of the following statements is true? a)Debra has an absolute advantage in the production of computers. b)Debra has an absolute advantage in the production of trucks. c)Debra has an absolute advantage in the production of computers. d)Mike has a comparative advantage in the production of computers.

Correct! current; negative

Nissan, a Japanese corporation, sells 10,000 cars to the U.S. This affects the U.S. __________ account with a __________ entry. capital; negative capital; positive current; negative current; positive

Correct! Supply will decrease.

Q001) The market for breakfast cereal is currently in equilibrium. Suddenly there is a storm that destroys the wheat that farmers had been growing for the cereal manufacturer. What will happen to the cereal market after the storm? -Demand will increase. -Demand will decrease. -Supply will increase. - Supply will decrease.

Correct! We know the quantity will increase, but we don't know what will happen to the price unless we know the size of the shifts.

Q004) You are a producer of tortillas. In the market for tortillas, two events happen simultaneously: there is a decrease in the price of corn used to make your tortillas, and there are news headlines that promote the link between eating tortillas and reducing heart attacks.Which of the following is a consequence? There is a decrease in the price of tortillas and a decrease in the quantity of tortillas. There is a decrease in the price of tortillas and an increase in the quantity of tortillas. There is an increase in the price of tortillas and a decrease in the quantity of tortillas. We know the quantity will increase, but we don't know what will happen to the price unless we know the size of the shifts.

Correct! Changes in the nature of agricultural production mean that fewer farm workers are needed.

Q006) Which of the following best explains why the United States has shifted from an agricultural economy to a service-based economy? The population of the United States has moved from rural to urban locations. Changes in the nature of agricultural production mean that fewer farm workers are needed. Outsourcing agricultural production means fewer jobs in the farm sector. People have started to value the output of the service sector more than that of the agricultural sector.

Correct! a movement along the demand curve for Mountain Dew.

Q010) You find out that the local Walmart is having a huge sale on Mountain Dew. You rush down with the intent of buying as much Mountain Dew as you can. In a graph of supply and demand, your action would be shown as a movement along the demand curve for Mountain Dew. a shift rightward of the demand curve for Mountain Dew. a shift leftward of the demand curve for Mountain Dew. a shift rightward of the supply curve for Mountain Dew.

Correct! shift the demand curve for tanning leftward.

Q012) According to the Food and Drug Administration, "...the ultraviolet (UV) radiation from these devices [sunlamps and tanning beds] poses serious health risks." As a result of reading this, a local mayor decides to introduce legislation that will put a 10% excise tax on purchases of these tanning products. From an economic point of view, this will shift the demand curve for tanning rightward. shift the demand curve for tanning leftward. shift the supply curve for tanning rightward. move down along the demand curve for tanning.

Correct! technological innovation and endogenous growth.

Some economies grow faster for reasons particular to those economies. This statement refers to an economy's technological advances and exogenous growth. technological innovation and endogenous growth. capital accumulation and exogenous growth. exogenous and endogenous growth.

Correct! capital; positive

The U.S. government sells U.S. Treasury securities to China. This affects the U.S. __________ account with a __________ entry. capital; negative capital; positive current; negative current; positive

b)limited resources and unlimited wants.

The concept of scarcity in economics refers to a)unlimited resources and limited wants. b) limited resources and unlimited wants. c)the fact that resources can sometimes be limited. d)limited resources and limited wants.

d)individual economic units and the economy as a whole.

The difference between microeconomics and macroeconomics is a difference between a)individuals and families. b)single individuals and large companies. c)government and the private sector. d)individual economic units and the economy as a whole.

a)trade

What is the term for the voluntary exchange of goods and services between two or more parties? a) trade b)trade-offs c)specialization d)opportunity cost

Correct! a point inside the PPF

Where is unemployment, such that employment is below the full-employment level, plotted in relation to a production possibilities frontier? a)a point on the PPF b)a point beyond the PPF c) a point inside the PPF d)It will depend on how much unemployment exists, because the point could be on or inside the PPF.

Correct! a point on the PPF

Where would you plot full employment in relation to a production possibilities frontier, if all other resources are being used efficiently? a)a point on the PPF b)a point beyond the PPF c)a point below the PPF d)It will depend on how much full employment exists; the point could be on or inside the PPF.

Correct! investment

Which component of GDP includes inventory changes? consumption investment government spending Inventory changes are not included in GDP.

Correct! lower personal savings rates

Which of the following is a frequent cause of trade deficits? weak economic growth lower personal savings rates comparative advantage in trade increased personal savings rates

Correct! It can give us guidance on the living standards of a nation.

Which of the following is true of gross domestic product? It only measures income. It only measures output. It measures price inflation. It can give us guidance on the living standards of a nation.

Correct! Real-world observations lead to economic theory, which then leads to policy.

Which of the following provides the correct interplay between the real world and economic theory? Real-world observations lead to economic theory, which then leads to policy. Real-world observations lead to policy, which then leads to economic theory. Policy leads to economic theory, which then leads to real-world observations. Economic theory leads to real-world observations, which then lead to policy.

Correct! Jonathan's opportunity cost for producing apples is lower than anyone else's.

Which of the following statements is consistent with Jonathan having a comparative advantage in producing apples? -Jonathan can produce more apples (by weight) than anyone else. -Jonathan's opportunity cost for producing apples is lower than anyone else's. -Jonathan can sell apples at a lower price than anyone else and still make a profit. -Jonathan can produce more apples (by volume) than anyone else.

according to modern economic theory, there are three sources of economic growth

Which of the following statements is true? If people in the United States increased their savings rate, this would lead to less spending and less economic growth. Solow's assumption about technological progress is that technological advances are predictable from other factors. Convergence in the Solow growth model is due to constant marginal product. according to modern economic theory, there are three sources of economic growth

Correct! hiring a babysitter and paying her in cash

Which of the following transactions, if they were included in the calculation of GDP, would NOT lead to an overstated GDP figure? buying a used car purchasing your first home, which was not a new construction hiring a babysitter and paying her in cash the purchase of a special fabric adhesive by a furniture company in North Carolina

Correct! government spending on social security

Which of the following would NOT be counted in the calculation of GDP? buying a brand new car paying for a flight to Las Vegas government spending on social security paying for a maid service to come clean your house

Correct! $290,000

You work for the Committee for Economic Evaluation in the small nation of Kinsdale. Your current job is to determine the country's gross domestic product in the past year. As the country is very small, the people only produce three things, which are listed in the table here. Based on the data in the table, what is the GDP for your country? $25.50 $120 $45,000 $290,000

land- land natural resources associated with land capital- buildings and equipment used to make something else like factories ,tractors labor- human labor entreprenuerism- combining resources in a new and innovative way

list the factors of production and their definitions