Macro test 2

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Evan purchases a wall calendar for $9, and his consumer surplus is $1. How much is Evan willing to pay for the wall calendar?

$10

Refer to table 7-3 IF you have a 2 (essentially) identical tickets that you sell to the group in an auction, assuming that each person can only buy one ticket, which of the following is closest to the selling price for each ticket?

$21

Refer to table 7-2 If there is only one unit of the good and if the buyers did against each other for the right to purchase it. Then the goos will sell for

$21 or slightly more

Refer to Table 7-2 If the price is $17, then consumer surplus in the market is

$54, and David and Alexa purchase the good.

Refer to Figure 8-3 The deadweight loss associated with the tax amounts to

$60, and this figure represent the surplus that is lost because the tax discourages mutually advantageous trades between buyers and sellers

Refer to Table 7-3 If you have a ticket that you sell to the group in an auction, who will buy the ticket?

Biyu

Refer to Figure 8-3 As a result of the tax

Consumer surplus decreases from $200 to $80

A drought in Spain destroys many red grapes causing the prices of both red grapes and red wine to rise. As a result, the consumer surplus in the market for red grapes

Decreases, and the consumer surplus in the market for red wine decreases

If Argentina exposes oranges to the rest of the world, Argentina's producers of oranges are worse off, and Argentina's consumers of oranges are better off, as a result of trade

False

If producing a soccer ball costs Jake $5, and he sells it for $40, his producer surplus is $45

False

If the United Kingdom imports tea cups from other countries, then U.K. producers of tea cups are better off, and U.K. consumers of tea cups are worse off, as a result of trade.

False

The Bureau of Labor Statistics is part of the U.S. Department of Labor

False

The World Prices of cotton is the highest prices of cotton observed anywhere in the world

False

The basic tools of supply and demand are central to microeconomics analysis but are of little use to macroeconomics

False

The inflation rate reported in the news is usually calculated from the GDP deflator rather than the consumer price index

False

When a tax is imposed on buyers, consumer surplus decreases but producer surplus increases

False

Without free trade, the domestic price of a good must be equal to the world price of a good.

False

Refer to figure 8-1 Suppose the government imposes a tax of P'-P"'. Total surplus before the tax is measured by the area

I+J+K+L+M+Y

Refer to Table 24-2 The cost of the basket

Increases from year 1 to year 2 and increased from year 2 to year 3

Refer to Figure 8-1 Suppose the government imposes a tax of P'-P"'. Total surplus after the tax is measured by the area

J+K+L+M

Micheal, a U.S. citizen, travels to Jamaica and buys a newly manufactured motorcycle made there. His purchase is included in

Jamaica's GDP, but it is not included in U.S. GDp

When a country allows trade and becomes an importer of silk, which of the following is NOT a consequence

The price received by domestic producers of silk increases.

Economists use the term inflation to describe a situation in which the economy's overall prices level is rising.

True

GDP is the most closely watched economic statistic because it is thought to be the best single measure of a society's economic well-being.

True

If Darby values a soccer ball at $50, and she pays $40 for it, her consumer surplus is $10.

True

If producing a soccer ball costs Jake $5, and he sells it for $40, his producer surplus is $35

True

Macroeconomics statistics include GDP, THe inflation rate, the unemployment rate, retail sales, and the trade deficit

True

Microeconomics and macroeconomics are closely linked

True

Taxes affect market participants by increasing the price paid by the buyer and received by the seller.

True

Taxes cause deadweight losses because they prevent buyers and sellers from realizing some of the gains from trade.

True

The CPI for 2008 is computed by dividing the price of the basket of goods and services in 2008 by the price of the basket of goods and services in the base year, then multiplying by 100.

True

The willingness to pay is the maximum amount that a buyer will pay for a good and measures how much the buyer values the good

True

When a tax is imposed, the loss of consumer surplus and producer surplus as a result of the tax exceeds the tax revenue collected by the government

True

Refer to Figure 2 From the Figure it is apparent that

Uganda has a comparative advantage in producing coffee, relative to the rest of the world

Refer to Figure 2 From the figure it is apparent that

Uganda will export coffee if trade is allowed

Net exports equal

Y - (C + I + G)

When a good is taxed

both buyers and sellers of the good are made worse off

If total spending rises from one year to the next, then

either the economy must be producing a larger output of goods and services, or goods and services must be selling at higher prices, or both.

Social Security payments are

excluded from GDP because they do not reflect the economy's production.

The CPI and the GDP deflator

generally move together

In the CPI, goods and services are weighted according to

how much consumers buy of each good or service.

Refer to Figure 2. With trade, Uganda will

import 15 units of coffee

The Social Security tax is a tax

labor

Changes in real GDP reflect

only changes in the amounts being produced

Refer to Table 24-2 The inflation rate was

positive in Year 2 and Positive in year 3

When the nation of Duxembourg allows trade and becomes an importer of software,

residents of Duxembourg who produce software become worse off; residents of Duxembourg who buy software become better off; and the economic well-being of Duxembourg rises.

A tax on an imported good is called a

tariff

The CPI is more commonly used as a gauge of inflation than the GDP deflator is because the

the CPI better reflects the goods and services bought by consumers

Core CPI is

the CPI excluding food and energy

GDP is defined as the

value of all final goods and services produced within a country in a given period of time


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