Macro Sample Exam

True

If the efficiency wage is currently above the equilibrium wage, then a decrease in the efficiency wage increases the quantity of labor demanded but decreases the quantity of labor supplied.

The equilibrium quantity would increase, and the effect on equilibrium price would be ambiguous.

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce steamed milk, which is used to make lattés, and scientists discovered that coffee prevents heart attacks?.

False

When the quality of a good improves while its price remains the same, the purchasing power of the dollar decreases, so the CPI overstates the change in the cost of living if the quality change is not accounted for.

D

Which of the following is a normative economic statement? A) Rising global demand for coal has led to increases in the price of coal. 5 B) With rising mortgage rates and rising unemployment rates, the number of unsold homes has increased. C) The state of Texas is considering increasing funds for light-rail development to promote the use of public transportation. D) Pharmaceutical manufacturers should not be allowed to patent their products so prescription drugs would be more affordable.

Price = $150; Quantity = 200.

You are given the following market data for Venus automobiles in Saturnia. Demand: P = 200 - 0.25Q Supply: P = 130 + 0.10Q where P = Price and Q = Quantity.

Productive efficiency

________ is a situation in which a good or service is produced at the lowest possible cost.

Bob is structurally unemployed, and Tom is frictionally unemployed

Bob is looking for work after school, but everywhere he fills out an application, the managers say they always have a lot more applications than open positions. Tom has a law degree. Several firms have made him offers, but he thinks he might be able to find a firm where his talents could be put to better use

True

Chips and salsa are complements. If the price of salsa decreases, the demand for chips will increase.

increase demand and increase supply resulting in an increase in the equilibrium quantity and an uncertain effect on the equilibrium price of red wine.

Studies have shown that drinking one glass of red wine per day may help prevent heart disease. Assume this is true, and favorable weather has increased the grape harvest of California vineyards. In the market for red wine, these two developments would

17,000

Suppose your expenses for this term are as follows: tuition: $10,000, room and board: $8,000, books and other educational supplies: $1,000. Further, during the term, you can only work parttime and earn $9,000 instead of your full-time salary of $15,000. What is the opportunity cost of 4 going to college this term, assuming that your room and board expenses would be the same even if you did not go to college?

True

The estimated rental value of owner-occupied housing, is included in the consumption component of GDP.

False

The natural rate of unemployment consists of frictional unemployment plus cyclical unemployment.