Macroeconomics

is the study of the choices people make to attain their​ goals, given their scarce resources.

Economics

Which of the following is not a step economists follow when developing an economic​ model?

Make value judgments to be proven or disproven.

A hypothesis in an economic model is

all of the above (A) tested before it can be accepted (or not rejected) (B) usually about a causal relationship (C) a statement that may be either correct or incorrect about an economic variable

Equity is

the fair distribution of economic benefits.

Every society faces​ trade-offs because we live in a world of scarcity. Suppose a​ student-athlete has the opportunity to earn $1,000,000 next year playing for a minor league baseball​ team, $900,000 next year playing for a European professional football​ team, or​ $0 returning to college for another year. The opportunity cost of the​ student-athlete returning to college next year is ____

$1,000,000

A market is a group of ____ of a good or service and the institution or arrangement by which they come together to trade.

Buyers and sellers

In a market​ system, how does society decide what goods and services will be​ produced?

Consumers, firms, and the government determine what goods and services will be produced by the choices they make.

Economists assume that the only reason people take the actions they do is in response to economic incentives.

False

In a market​ system, what determines how goods and services will be​ produced?

Firms determine how goods and services will be produced.

Terbia is a closed​ economy, which has been growing at a very slow pace over the last decade. In order to boost economic​ growth, the government removed trade barriers earlier this year and increased its spending on the economy. These moves were expected to generate employment and increase economic growth.​ However, unemployment did not decline as much as expected. Which of the​ following, if​ true, can explain this​ outcome?

Imported varieties of many goods were cheaper than the domestically produced varieties.

Which of the following is a correct statement about a mixed​ economy?

In a mixed​ economy, most economic decisions are made in markets but the government plays a significant role in the allocation of resources.

Harry Fletcher is a market analyst at an automobile firm. He formed a hypothesis that an increase in advertising would increase demand for the​ firm's cars. The ad campaign ran for a period of six months.​ However, the results were not as positive as Harry had anticipated. Which of the​ following, if​ true, can explain this​ outcome?

Interest rates increased substantially during this period.

Julia​ Paul, an analyst at a research​ institute, lives very close to her office and walks to work every day.​ Meanwhile, her​ colleague, Amanda​ Jones, dislikes the fact that it takes her almost an hour to commute to work every day. As a​ result, when Julia decides to move to a suburb farther​ away, Amanda is very surprised. Which of the​ following, if​ true, would explain​ Julia's behavior?

Julia saves more in rent than she spends on commuting to work.

Best​ Goods, one of the leading department store​ chains, offers goods at low prices. It recently opened many new stores across the country. After successfully setting up stores in most major​ cities, Best Goods faced substantial opposition in the city of​ Joberg, where lobbyists for smaller general stores​ (local businesses) opposed its entry. These lobbyists argued that Best Goods would put many local stores out of business and would also increase income inequality and unemployment in the city. Which of the following can most reasonably be concluded from the information given in the​ question?

Lobbyists believe that those who lose jobs​ won't find alternative opportunities in the short term.

Economists use the word marginal to mean an extra or additional benefit or cost of a decision. An optimal decision occurs when

Marginal benefit equals marginal cost

​Today, which of the following countries has a centrally planned​ economy? How are economic resources allocated in a market​ economy?

North Korea by the decisions of households and firms interacting in markets

​Trade-offs force society to make​ choices, particularly when answering the following three fundamental​ questions:

One, what goods and services will be​ produced? Two, how will the goods and services be​ produced? Three, who will receive the goods and services​ produced?

____is concerned with what is​, and ____is concerned with what ought to be. Economics is about ____, which measures the costs and benefits of different courses of action.

Positive analysis Normative analysis Positive analysis

When does productive efficiency​ occur? When does allocative efficiency​ occur?

Productive efficiency occurs when a good or service is produced at the lowest possible cost. Allocative efficiency occurs when production is in accordance with consumer preferences.

One of the basic facts of life is that people must make choices as they try to attain their goals. This unavoidable fact comes from a reality an economist calls

Scarcity

A large corporation that runs nursing homes estimates that changes to Medicare will result in lower payments by Medicare to nursing homes for​ short-term stays by patients that require therapy or care upon leaving hospitals. Assume the corporation is considering expanding the number of​ "beds" it offers at its nursing homes. Given the changes to​ Medicare, if the marginal benefit of offering an additional bed is ​$8,000 and the marginal cost is ​$9,000 per​ bed, then the corporation ____ offer additional beds.

Should not

Which of the following statements about the idea that people are rational is​ correct?

The idea assumes that consumers and firms use all available information as they act to achieve their goals.

Best​ Goods, one of the leading department store​ chains, offers goods at low prices. It recently opened many new stores across the country. After successfully setting up stores in most major​ cities, Best Goods faced substantial opposition in the city of​ Joberg, where lobbyists for smaller general stores​ (local businesses) opposed its entry. These lobbyists argued that Best Goods would put many local stores out of business and would also increase income inequality and unemployment in the city. Which of the​ following, if​ true, would strengthen the stand of the​ lobbyists?

The quality of goods offered at Best Goods is usually the same quality as those offered at local stores.

In a market​ system, how does society decide who will receive the goods and services​ produced?

Who receives the goods and services produced depends largely on how income is distributed.

Economics is a social science because

all of the above. (A) it considers human behavior—particularly ​decision-making behavior. (B) it is based on studying the actions of individuals. (C) it applies the scientific method to the study of the interactions among individuals.

Any model is based on making assumptions because

both a and b. (A) models have to be simplified to be useful (B) we cannot analyze an economic issue unless we reduce its complexity

When economists develop models designed to explain the choices people​ make, they generally assume that

people are rational.

Suppose an analyst estimates the gains to workers from free trade laws. This is an example of ____

positive analysis

Opportunity cost is

the highest valued alternative that must be given up to engage in an activity.

When the federal government crafts environmental policies that make it less expensive for firms to follow green​ initiatives,

the policies are consistent with economic incentives.

Macroeconomics is

the study of the economy as a​ whole, including topics such as​ inflation, unemployment, and economic growth.