Macro Midterm
What is Uganda's real GDP if its nominal GDP is $27.5 billion (in current US$), and the GDP deflator is 163.4? A. $16.8 billion B. $12.4 billion C. $27.5 billion D. $44.9 billion
A. $16.8 billion
Which of the following correctly shows the steps needed to calculate the inflation rate? A. Find out what people typically buy, collect the prices from the stores where people shop, tally up the cost of the basket of goods and services, and calculate the inflation rate. B. Tally up the cost of the basket of goods and services, subtract the value of goods and services that are no longer counted in the basket, and then calculate the inflation rate. C. Find the total value of the basket of goods and services, assess quality changes from one period to the next, and measure the inflation rate. D. Collect prices from the stores where people shop, assess the substitution that people make from low inflation to high inflation products, and calculate the difference in the prices that people pay.
A. Find out what people typically buy, collect the prices from the stores where people shop, tally up the cost of the basket of goods and services, and calculate the inflation rate.
What is the difference between spending from a microeconomic standpoint versus spending from a macroeconomic standpoint? A. In microeconomics, spending refers to spending by you, or your family, or your company, whereas in macroeconomics, spending refers to the spending by all consumers, all businesses, and the government in the economy. B. In microeconomics, spending refers to one individual's spending, whereas in macroeconomics, spending refers to government expenditure. C. In microeconomics, spending refers to expenditure on consumer goods only, whereas in macroeconomics, spending refers to business expenditures only. D. In microeconomics, spending refers to domestic spending, whereas in macroeconomics, spending refers to foreign spending.
A. In microeconomics, spending refers to spending by you, or your family, or your company, whereas in macroeconomics, spending refers to the spending by all consumers, all businesses, and the government in the economy.
Which of the following will probably rise when the economy is in a recession? A. Initial unemployment claims B. Real GDP growth C. Real retail sales D. Employment
A. Initial unemployment claims
Which of the following correctly describes the business cycle? A. It is the fluctuations of GDP around the potential output. B. It is the constant rise in GDP over time. C. It refers to ups and downs in business revenue during expansions and recessions. D. It refers to excess unemployment during recessionary periods.
A. It is the fluctuations of GDP around the potential output.
Which of the following is a broad indicator? A. Real gross domestic income B. Agricultural sector output C. Starbucks stock returns D. Labor demand in the agricultural industry
A. Real gross domestic income
A normal good is: A. a good for which higher income causes an increase in demand. B. a good for which higher income causes a decrease in demand. C. a good which is normally purchased by many consumers. D. a good which is only purchased by high-income consumers.
A. a good for which higher income causes an increase in demand.
Graphically, shortages will always occur: A. at prices below the equilibrium price. B. at the equilibrium price. C. at prices above the equilibrium price. D. when the quantity supplied exceeds the quantity demanded.
A. at prices below the equilibrium price.
The Great Moderation refers to the: A. decreased volatility of the U.S. economy. B. increase in globalization. C. longstanding effect of the Great Recession. D. stable level of inflation in the United States.
A. decreased volatility of the U.S. economy.
Hyperinflation is: A. extremely high rates of inflation. B. a period of high money growth in an economy. C. very high rates of economic growth. D. inflation that occurs when the economy is in a recession.
A. extremely high rates of inflation.
The interdependence principle: A. implies that buyers decisions are affected by many factors other than the price of an item. B. is the same as the cost-benefit principle. C. implies that consumers depend on each other to make purchase decisions in the market. D. refers to the marginal benefit of consuming additional units of an item.
A. implies that buyers decisions are affected by many factors other than the price of an item.
Nerida Kyle could either commute to work via Uber or purchase a new car. The average cost of her one-way Uber trip is $15. Nerida works five days a week for 50 weeks a year. Based solely on avoiding the cost of an Uber, Nerida should purchase a car if the cost of the car is _____ than _____ per week. A. less; $150 B. greater; $75 C. less; $75 D. greater; $150
A. less; $150
A market consists of ten similar suppliers that are making the same supply decisions. To find the market supply of these ten suppliers, you: A. multiply the individual supply of one of the suppliers by ten. B. take one-tenth of the individual supply of each supplier and add it up. C. find the average quantity produced by the ten suppliers. D. take the individual supply of one supplier.
A. multiply the individual supply of one of the suppliers by ten.
If you see that inflation between last year and this year is 3%, this means that: A. on average, prices went up across the economy by 3%. B. the prices of each and every good and service went up by 3%. C. the consumer price index rose by 3% more than the producer price index. D. economic growth is also 3%.
A. on average, prices went up across the economy by 3%.
The four stages of the business cycle are: A. peak, recession, trough, and expansion. B. full employment, potential GDP, recessionary gap, and inflationary gap. C. expansion, growth, contraction, and depression. D. consumption, investment, government expenditure, and net exports.
A. peak, recession, trough, and expansion.
An example of a leading indicator is: A. the stock market. B. unemployment. C. unemployment insurance claims. D. nonfarm payrolls.
A. the stock market.
If a store runs a sale on a product to clear out its stock, we can conclude that: A. there was a surplus of the product in the store. B. the demand for the product is larger than the supply of the product. C. there was a shortage of the product in the store. D. the product must be very close to its expiration date.
A. there was a surplus of the product in the store.
An underemployed person is one who is: A. retired or outside of the labor force. B. cyclically unemployed. C. employed in the underground economy. D. working but whose skills are not fully utilized.
D. working but whose skills are not fully utilized.
In 2010, Canada's GDP was approximately $1,357 billion, and its population was about 34.12 million. What was Canada's approximate GDP per person in 2010? A. $46,060 B. $39,770 C. $3,980 D. $26,246
B. $39,770
In 2017, the total population of Africa was estimated to be about 1,250,000,000 people. This number, in billions, is: A. 125. B. 1.25. C. 12.5. D. 1,250.
B. 1.25.
In May 2019, there were approximately 68,980,000 people in Japan's labor force. About 1,650,000 people were unemployed. What was the unemployment rate? A. 6.1% B. 2.4% C. 1.8% D. 5.0%
B. 2.4%
Which of the following scenarios depicts a seller who is following the Rational Rule for Sellers? A. Andy's Diner finds that the marginal cost of a fish and chips meal is $7 and lists the item for sale at $6.50. B. American Airlines determines the marginal cost of an extra passenger to be $75 and sells a discount seat for $250. C. An auto-rickshaw driver in New Delhi, India, calculates a trip to have a marginal cost of 350 rupees and accepts a ride request for 315 rupees. D. Mindy sets up a lemonade stand and calculates the cost of an additional cup of lemonade at 50 cents, and sells it for 25 cents.
B. American Airlines determines the marginal cost of an extra passenger to be $75 and sells a discount seat for $250.
Which of the following will fall when the economy is expanding? A. Nonfarm payrolls B. Applications for unemployment benefits C. Consumer confidence D. Business confidence
B. Applications for unemployment benefits
Which of the following shows the medium of exchange function of money? A. Darius goes window shopping. B. Daniela goes to the store and purchases roses with U.S. dollars. C. Wilma wants to sell her old car, and she values it at $2,400. D. Mena saves his money in a certificate of deposit at the bank.
B. Daniela goes to the store and purchases roses with U.S. dollars.
A bakery hires a baker who can make 15 cakes per day. The bakery then decides to hire a second baker who will use the kitchen at the same time as the first baker. The bakery finds that the second baker can produce only an additional nine cakes per day. What concept does this scenario illustrate? A. The marginal principle B. Diminishing marginal product C. The opportunity cost principle D. The cost-benefit principle
B. Diminishing marginal product
You purchase a new car (produced this year) for $38,000. After six months, you sell the car for $31,500. How much does GDP rise because of these two transactions? A. GDP rises by $6,500. B. GDP rises by $38,000. C. GDP rises by $31,500. D. GDP rises by $69,500.
B. GDP rises by $38,000.
What is the difference between microeconomics and macroeconomics? A. Microeconomics is the study of individual decisions in specific markets, whereas macroeconomics is the study of government policies. B. Microeconomics is the study of individual decisions in specific markets, whereas macroeconomics is the study of the economy as a whole. C. Microeconomics focuses only on the forces of individual demand and individual supply, whereas macroeconomics focuses only on policy making for the economy. D. Microeconomics is the study of the economy as a whole, whereas macroeconomics is the study of individual decisions in specific markets.
B. Microeconomics is the study of individual decisions in specific markets, whereas macroeconomics is the study of the economy as a whole.
You eat M&Ms every day. When you go to the store to buy some, you find that M&Ms are more expensive than they were last month. Which of the following could explain why M&Ms are more expensive? A. Consumers are now purchasing fewer M&Ms compared to other types of chocolates. B. The supply of cacao beans, used to produce chocolate, has fallen around the world. C. A new robot has been installed at the Mars chocolate company that reduces the time needed to produce M&Ms by half. D. A new study finds that the benefits of eating chocolate are not as great as previously thought.
B. The supply of cacao beans, used to produce chocolate, has fallen around the world.
You're shopping online, and you place an item in your virtual cart. Two days later, you return to the virtual cart to check out and find that the item is now more expensive. Assuming that the market is competitive, what could explain the price increase? A. New sellers are offering the same product. B. There is a shortage of the item. C. There is decreased demand for the item. D. There is a surplus of the item.
B. There is a shortage of the item.
Dale is a stay-at-home-parent whose typical day consists of getting the kids ready for school, doing the laundry, cooking three meals, and cleaning the house. How are Dale's home activities counted in GDP? A. They are counted by subtracting Dale's opportunity cost in terms of lost income. B. They are not counted. C. They are counted by assigning a value that is equivalent to what it would have taken to pay a housekeeper to perform the same tasks. D. They are counted at market value.
B. They are not counted.
Why are supply curves typically upward-sloping? A. They slope upward because sellers prefer to sell more when prices are lower. B. They slope upward because higher prices lead individual businesses to supply a larger quantity and more businesses are willing to supply goods and services. C. They slope upward because sellers demand more when prices are lower. D. They slope upward due to the law of demand.
B. They slope upward because higher prices lead individual businesses to supply a larger quantity and more businesses are willing to supply goods and services.
Suppose that you have a pumpkin stall at a farmer's market, and the Halloween season arrives. You know that your customers will want to buy many pumpkins to decorate their houses and make pumpkin pies. Which of the following is a likely result of this scenario? A. You will take fewer pumpkins to the market to sell. B. You can charge a higher price per pumpkin. C. You will be able to sell only the highest-quality pumpkins. D. You will wind up with many unsold pumpkins.
B. You can charge a higher price per pumpkin.
Henry Ford's $5 per day wage is an example of: A. a minimum wage law. B. an efficiency wage. C. an equilibrium wage. D. a government regulated wage.
B. an efficiency wage.
A minimum wage that is above the equilibrium wage is: A. a labor union negotiated wage. B. an example of a price floor. C. an efficiency wage. D. an unemployment benefit.
B. an example of a price floor.
The key to using the cost-benefit principle is to think about _____ aspects of a decision. A. only non financial B. both financial and non financial C. neither financial nor non financial D. only financial
B. both financial and non financial
The cost-benefit principle states that _____ are the incentives that shape decisions. A. framing effects B. costs and benefits C. incomes D. opportunity costs
B. costs and benefits
When there is a shortage of highly skilled workers in a particular region, the: A. demand for highly skilled workers increases. B. demand for skills education increases. C. supply of jobs for highly skilled workers increases. D. demand for skills education decreases.
B. demand for skills education increases.
As a result of technological innovation, automated water pumps are being installed on the farms of Kenyan tomato farmers. As a result of the increased use of automated water pumps, the equilibrium price of tomatoes will: A. rise, due to a rise in demand. B. fall, due to a rise in supply. C. rise, due to a fall in supply. D. fall, due to a fall in demand.
B. fall, due to a rise in supply.
You are considering whether you should go out to dinner at a restaurant with your friend. The meal is expected to cost you $50, you typically leave a 20% tip, and a round-trip Uber ride will cost you $15. You value the restaurant meal at $30 and the time spent with your friend at $50. You should ____ to dinner with your friend because the benefit of doing so is _____ than the cost. A. not go; greater B. go; greater C. not go; less D. go; less
B. go; greater
The Rational Rule for Sellers says that a seller should sell one more unit of an item if the price is: A. less than the marginal benefit. B. greater than or equal to the marginal cost. C. less than the marginal cost. D. greater than or equal to the marginal benefit.
B. greater than or equal to the marginal cost.
The principle that your best choice depends on your other choices, the choices others make, developments in other markets, and expectations about the future is known as the _____ principle. A. marginal B. interdependence C. opportunity cost D. cost-benefit
B. interdependence
Kevin Williamson goes to a local coffee shop and orders a medium-sized latte. His willingness to pay for that latte is $6. The price of the latte is $2. The cost to the coffee shop to produce the latte is $1. How much economic surplus does Kevin gain when he purchases the latte? A. $2 B. $1 C. $4 D. $6
C. $4
A rational buyer will: A. buy a product until the marginal benefit of consuming the product is less than the price of the product. B. keep buying a product until marginal benefit equals price. C. buy the product only when the marginal benefit of consuming the product is twice as much as the price of the product. D. not consider costs versus benefits when purchasing a product.
B. keep buying a product until marginal benefit equals price.
Decisions should reflect the _____ costs, rather than just the _____ costs. A. nonfinancial; financial B. opportunity; financial C. opportunity; nonfinancial D. financial; marginal
B. opportunity; financial
The GDP deflator is an index that tracks the: A. price that businesses pay over time for the inputs used in the production process. B. price of all goods and services produced domestically. C. average price that consumers pay over time for a representative basket of goods and services. D. highest prices consumers pay over time for imported goods and services.
B. price of all goods and services produced domestically.
A shortage occurs when: A. quantity supplied exceeds quantity demanded. B. quantity demanded exceeds quantity supplied. C. when there is insufficient demand. D. there is excess production.
B. quantity demanded exceeds quantity supplied.
Suppose that an economy is in a recession. You would expect to see the unemployment rate: A. be equal to the equilibrium unemployment rate. B. rise above the equilibrium unemployment rate. C. be zero. D. fall below the equilibrium unemployment rate.
B. rise above the equilibrium unemployment rate.
An individual demand curve is a graph: A. that plots the quantity of an item that someone plans to buy, at one single price point. B. that plots the quantity of an item that someone plans to buy, at each price. C. that plots the market price of a product at different points in time. D. that plots the quantity of an item that a seller plans to sell, at each price.
B. that plots the quantity of an item that someone plans to buy, at each price.
When plotting a supply curve A. the quantity demanded goes on the vertical axis. B. the quantity supplied goes on the horizontal axis. C. the quantity supplied goes on the vertical axis. D. the price goes on the horizontal axis.
B. the quantity supplied goes on the horizontal axis.
Which of the following is an example of transfer payments? A. interest earned on savings in banks B. unemployment benefits C. military salaries D. government loans
B. unemployment benefits
An equilibrium in a market occurs: A. at the halfway point on a demand curve. B. when the quantity supplied equals the quantity demanded. C. when suppliers have sold all the goods and services that they have produced. D. at the halfway point on the price axis.
B. when the quantity supplied equals the quantity demanded.
Which of the following is an example of a durable good? A. your haircut B. your new car C. a soft drink D. fresh flowers from the florist
B. your new car
Which principle tells you that the true cost of something is the next best alternative you have to give up to get it? A. The cost-benefit principle. B. The marginal principle C. The opportunity cost principle. D. The interdependence principle.
C. The opportunity cost principle.
Consider the following basket of goods: 50 bottles of milk, 100 avocadoes, 50 apples, and eight pineapples. Suppose that last year, each bottle of milk was $2.50, each avocado was $1.50, each apple was $0.75, and each pineapple was $4. This year, each bottle of milk is $2.50, each avocado is $1.80, each apple is $0.80, and each pineapple is $4.30. What is the inflation rate between last year and this year? A. -9.09% B. -10% C. 10.13% D. 8.99%
C. 10.13%
Suppose a labor market is described by the demand equation, Qd = 60 - 2w, and the supply equation, Qs = -10 + w, where Qd is the quantity demanded of labor, Qs is the quantity supplied of labor, and w is the wage (in dollars). If the government institutes a minimum wage of $25, how many workers will be willing to work in this market? A. 10,000,000 B. 20,000,000 C. 15,000,000 D. 5,000,000
C. 15,000,000
In May 2019, Texas reported a civilian labor force of 14,012,711. The number of employed people was 13,516,387. What was the unemployment rate? A. 4.9% B. 96.5% C. 3.5% D. 5.3%
C. 3.5%
Which of the following lists only the factors that would cause a decrease in the supply of an item? A. A decrease in the number of sellers in the market; a fall in the price of a complement-in-production; an increase in productivity. B. A rise in the price of a substitute-in-production; a rise in the price of a complement-in-production; an expectation that the price of the item will rise in the future. C. A rise in input prices; a decrease in the number of sellers in the market; a rise in the price of a substitute-in-production. D. A fall in input prices; an increase in productivity; a fall in the price of a substitute-in-production.
C. A rise in input prices; a decrease in the number of sellers in the market; a rise in the price of a substitute-in-production.
If an economy has a positive output gap of 1.5%, this means: A. unemployment is 1.5% above the natural rate of unemployment. B. GDP is 1.5% below potential GDP. C. GDP is 1.5% above potential GDP. D. inflation is 1.5% above the long-run rate of inflation.
C. GDP is 1.5% above potential GDP.
What is quantity supplied? A. It is a graph that plots the quantities of an item that a seller plans to sell at different prices. B. It is the amount of an item that a buyer is willing to buy at a particular price. C. It is the amount of an item that a seller is willing to sell at a particular price. D. It is a graph that plots how much a seller produces at different points in time.
C. It is the amount of an item that a seller is willing to sell at a particular price.
How is the economic surplus generated by a decision calculated? A. It is the sum of benefits arising from the decision. B. It is the total benefits plus total costs arising from the decision. C. It is the total benefits minus total costs arising from the decision. D. It is the sum of costs arising from the decision.
C. It is the total benefits minus total costs arising from the decision.
Which of the following is NOT a factor that can shift supply? A. The expected future price of a product. B. The price of a complement-in-production. C. The market price of a product. D. The price of a substitute-in-production.
C. The market price of a product.
A seller at a farmer's market wants $10 for a bag of 10 apples. You think his price is too high, so you counter with an offer of $6 for the bag. The seller then offers you a much smaller bag of five apples for $6. You bargain again, and the seller lets you buy the 10 apples for $8. This scenario is an example of: A. a shortage. B. perfect competition. C. a market in action. D. a centrally planned market.
C. a market in action.
During the Great Recession, the United States Congress increased the length of time that unemployment benefits could be received from 52 weeks to 99 weeks. This change caused: A. an increase in the number of employed people in the economy. B. a decrease in unemployment. C. an increase in the costs for the government. D. an increase in the labor force participation rate.
C. an increase in the costs for the government.
An equilibrium price is: A. the price that occurs when there is a surplus. B. the price that prevails when there is a shortage. C. determined by the intersection of the demand and supply curves. D. the price that prevails when quantity supplied is less than quantity demanded.
C. determined by the intersection of the demand and supply curves.
The higher the minimum wage, as compared to the equilibrium wage, the: A. lower the natural rate of unemployment. B. higher the cyclical unemployment rate. C. higher the structural unemployment rate. D. lower the structural unemployment rate.
C. higher the structural unemployment rate.
Jonathan Mendez is deciding whether to study for his economics exam at a café down the street or go to a concert a few cities over. The time spent commuting to the concert is ____ in his opportunity cost calculations and represents a _____ cost. A. included; financial B. not included; sunk C. included; non financial D. not included; financial
C. included; non financial
The __________ suggests, decisions about quantities are best made incrementally. A. interdependence principle B. opportunity cost principle C. marginal principle D. cost-benefit principle
C. marginal principle
Which of the following lists the functions of money? A. medium of exchange, measure of inflation, and benchmark of quality B. carrier of exchange, unit of account, and measure of inflation C. medium of exchange, store of value, and unit of account D. store of value, store of interest, and buffer against inflation
C. medium of exchange, store of value, and unit of account
When you calculate marginal costs, they should include: A. both the variable and fixed costs. B. only fixed costs. C. only variable costs. D. the market price of the product.
C. only variable costs.
When plotting a demand curve A. quantity supplied is on the vertical axis. B. quantity demanded is on the vertical axis. C. price is on the vertical axis. D. price is on the horizontal axis.
C. price is on the vertical axis
Variable costs are the costs that A. are incurred to build factories and assembly plants. B. stay fixed with the quantity of output produced. C. are independent of the amount of output produced. D. vary with the quantity of output produced.
D. vary with the quantity of output produced.
Graphically, the equilibrium quantity can be identified as the: A. quantity corresponding to the intersection of the demand curve and the price axis. B. maximum quantity that sellers are willing to sell. C. quantity corresponding to the intersection of the demand and supply curves. D. maximum quantity that buyers are willing to buy.
C. quantity corresponding to the intersection of the demand and supply curves.
According to Okun's rule of thumb, for every 1% fall in the actual output below potential output, the unemployment rate: A. falls by 0.5%. B. rises by 1%. C. rises by 0.5%. D. falls by 1%.
C. rises by 0.5%.
What kind of data adjustment removes the effect of sales spikes due to the holiday season? A. nominal data B. annual data C. seasonally adjusted data D. real data
C. seasonally adjusted data
If the frictional rate of unemployment is 1.45%, the structural rate of unemployment is 2.3%, and the total unemployment rate is 6%, then we can conclude that: A. there is 2.25% actual unemployment. B. the labor force participation rate has fallen significantly. C. the equilibrium rate of unemployment is 3.75%. D. the economy is experiencing an economic boom.
C. the equilibrium rate of unemployment is 3.75%.
A downward-sloping demand curve implies: A. there is no relationship between price and quantity demanded. B. there is a positive relationship between price and quantity demanded. C. there is an inverse relationship between price and quantity demanded. D. buyers are willing to buy less when prices are lower.
C. there is an inverse relationship between price and quantity demanded.
Dependencies between your own choices reflect the fact that: A. resources can be spread across time. B. resources are spread across varying markets. C. you have limited resources. D. society has limited resources.
C. you have limited resources
What is Sri Lanka's GDP deflator if its nominal GDP is $88.9 billion (in current US$) and the real GDP is $59.34 billion? A. 66.7 B. 100 C. 136.5 D. 149.8
D. 149.8
Which of the following scenarios illustrates the law of demand? A. John likes to drink spring water. At $2 he buys four bottles of water, and at $1.50 he still buys four bottles of water. B. A research company finds that the more expensive a particular brand of a designer handbag, the more that consumers are willing to purchase the brand. C. Francis does not care about the price of coffee at the coffee shop - he must buy two cappuccinos every day, regardless of the price. D. Kathleen eats more steak when the price is low, and less when the price is high.
D. Kathleen eats more steak when the price is low, and less when the price is high.
You have four friends. Which of your friends can be described as "cyclically unemployed"? A. Regan, who is in a nursing home B. Arthur, who quit his job to look for a better job C. Martha, who is a full-time stay-at-home parent D. Keele, who lost her job after her company lost a lot of customers during an economic downturn
D. Keele, who lost her job after her company lost a lot of customers during an economic downturn
Which economic indicator tells you about the future expected profits of businesses? A. Initial unemployment claims B. Nonfarm payrolls C. Consumer price index D. S&P 500
D. S&P 500
Which economic indicator tells you how fast wages and benefits are rising? A. Business confidence B. S&P 500 C. Nonfarm payrolls D. The employment cost index
D. The employment cost index
Which of the following is a narrow indicator? A. Real GDI B. The consumer price index C. Non-farm payrolls D. The stock price for JPMorgan Chase & Co.
D. The stock price for JPMorgan Chase & Co.
Quantity demanded is on the horizontal axis when you plot a demand curve and shows the: A. amount where opportunity cost is equal to the marginal benefit. B. amount of a good that a person actually buys at the market price. C. amount of a good that a seller is willing to sell at a particular price. D. amount of a good that a person is willing to buy at each price.
D. amount of a good that a person is willing to buy at each price.
Joshua Murphy is planning on studying late into the night for his economics exam. How many cups of coffee should he buy tonight? Joshua should keep buying coffee throughout the evening until the marginal: A. cost of purchasing one more coffee is positive. B. benefit of purchasing one more coffee is positive. C. benefit of purchasing one more coffee is less than the marginal cost. D. benefit of purchasing one more coffee equals the marginal cost.
D. benefit of purchasing one more coffee equals the marginal cost.
Kathleen Alvarado is binge-watching her favorite show on Netflix. She is attempting to decide how many more episodes to watch. Kathleen should continue watching episodes as long as the marginal: A. benefit of watching another episode is positive. B. cost of watching another episode is positive. C. benefit of watching another episode is less than the marginal cost. D. benefit of watching another episode exceeds the marginal cost.
D. benefit of watching another episode exceeds the marginal cost.
In a voluntary economic transaction between a buyer and a seller, _____ can earn economic surplus from the transaction. A. only the seller B. only the buyer C. neither the buyer nor the seller D. both the buyer and the seller
D. both the buyer and the seller
According to the marginal principle, keep increasing quantity until the marginal benefit of an additional item is _____ the marginal cost of an additional item. A. greater than or less than B. greater than C. less than D. equal to
D. equal to
Which of the following is a scaled number? A. the country's national debt B. the sum of all incomes earned in the economy C. total tax revenues in the economy D. government budget deficit as a percentage of GDP
D. government budget deficit as a percentage of GDP
When there is a shortage of highly skilled workers in a particular region: A. unemployment rises among highly skilled workers. B. there is a corresponding surplus of low-skilled workers in the region. C. the incomes of highly skilled workers fall. D. highly skilled workers can negotiate higher salaries.
D. highly skilled workers can negotiate higher salaries.
When you get hired for a well-paying job, you will most likely view older used cars as A. complementary goods. B. normal goods. C. substitute goods. D. inferior goods.
D. inferior goods.
Diminishing marginal benefit: A. is not important in determining a consumer's purchase decision. B. is when consumers do not follow the rational rule. C. is when buying an additional item yields a larger marginal benefit than the previous item. D. is when buying an additional item yields a smaller marginal benefit than the previous item.
D. is when buying an additional item yields a smaller marginal benefit than the previous item.
The equilibrium unemployment rate is also known as the _____ unemployment rate. A. frictional B. cyclical C. structural D. long-run
D. long-run
Menu costs are the: A. total costs of producing goods and services. B. costs of producing restaurant meals. C. variety of costs that cause producers to change their prices. D. marginal costs of adjusting prices.
D. marginal costs of adjusting prices.
If you see that the consumer price index this year is lower than the consumer price index last year, this means that: A. economic growth also decreased. B. the prices of each and every good and service went down. C. the consumer price index is lower than the producer price index. D. on average, prices went down across the economy.
D. on average, prices went down across the economy.
The opportunity costs of attending college include the: A. cost of room and board. B. effort and hard work. C. cost of clothes to wear at school. D. potential income that could be earned working.
D. potential income that could be earned working.
Based on Okun's rule of thumb, if you forecast that the output gap will decline from 0% to -3%, the unemployment rate will: A. rise by 3%. B. fall by 1.5%. C. fall by 2%. D. rise by 1.5%.
D. rise by 1.5%.
Paint and paintbrushes are complements. If the price of paint rises, we can expect: A. the quantity demanded of paint to increase. B. the demand for paintbrushes to increase. C. the quantity demanded of paintbrushes to remain unchanged. D. the demand for paintbrushes to decrease.
D. the demand for paintbrushes to decrease.
An economy's potential output level is: A. the output when unemployment is zero. B. the level at which no resources are available in the economy. C. equivalent of the GDP at current market value. D. the output that is possible when all resources are fully employed.
D. the output that is possible when all resources are fully employed.
Diana is a student studying economics and currently working on her class schedule for next semester. She decides to enroll in a course on economic data analysis because she knows that data analysis is a highly sought-after skill from employers in her career field. Weighing what may affect her in the future opportunities demonstrated dependency: A. between college courses. B. between markets. C. between people or businesses in the same market. D. through time.
D. through time.
