Macroeconomics

Select all of the statements that provide evidence supporting the claim that fighting poverty is a public good. The general public believes fighting poverty is one of the primary duties of government. If fighting poverty were left to charity, most people would not contribute. Living in a world with little or no poverty would be a benefit everyone would enjoy without diminishing anyone else's enjoyment of it. Anti-poverty programs receive public funding. When poverty is reduced, no one can be excluded from enjoying the benefit to society of having a lower poverty rate.

-If fighting poverty were left to charity, most people would not contribute -When poverty is reduced, no one can be excluded from enjoying the benefit to society of having a lower poverty rate -Living in a world with little or no poverty would be a benefit everyone would enjoy without diminishing anyone else's enjoyment of it

The country of Emmental has three firms, whose information is displayed in the accompanying table (in thousands). Assume that no international trade exists, and that each firm sells all goods either to the population of Emmental or as an intermediate good. Happy Cowfeed buys intermediate goods, if any, from Creamy Cheese. Farmers Jon's Dairy buys intermediate goods, if any, from Happy Cowfeed. Creamy Cheese buys intermediate goods, if any, from Farmers Jon's Dairy. Calculate the missing information (also in thousands).

A = $72 B = $212 C = $0 D = $0 E = $212 F = $75 G = $140 What is total GDP in the country of Emmental? GDP = $247

A ___________ is a person who ___________________ a public good that others ________________.

A free rider is a person who enjoys a public good that others pay for.

Each scenario illustrates a principle of economics. Classify each scenario according to the principle that best fits it. a. An educational software company wants to expand the number of economics questions that it offers and is considering hiring another economist. The company compares how much adding another worker will improve the product to the additional cost. b. Ava finds that there is not enough time after work to have dinner, exercise, and watch TV, and she must make choices about how to use her limited time. c. On Black Friday, there are huge sales for electronics at many retail stores. David must decide between buying a camera at one store or a flat screen TV at another store, and buying one means losing out on the ability to purchase the other.

A. Marginal decisions B. Resource scarcity C. Opportunity cost

Determine which economic principle is illustrated by each scenario. a. The owner of a snow cone trailer realizes that the demand for snow cones is low during the winter, and closes shop until the temperature warms back up near summertime. b. The local river has so much pollution that three-eyed fish are forming. The government responds by regulating the amount of chemicals that can be dumped into the river. c. At a high-end restaurant, the restaurant owner has one chef at a meat station, one chef at a vegetable station, and one chef, who has an artistic eye, plate the food she is given. The result is increased service speed, and the kitchen is able to serve more customers in an evening. d. During the summer, a bumper crop of oranges in Florida causes a surplus in the supply of oranges nationwide. As a result, prices fall to compensate for the surplus and consumers enjoy the fruits of the farmers' labor.

A. Market Efficiency B. Government intervention C. Specialization D. Equilibrium

Indicate whether each event described falls mainly in the field of microeconomics or that of macroeconomics. a. A tax on tires increases the price of tires paid by car owners. microeconomics macroeconomics b. As a result of a severe recession, the total output, or gross domestic product, of a nation falls by 4 percent. microeconomics macroeconomics c. Increased consumer spending causes the national unemployment rate to fall. microeconomics macroeconomics d. Increased consumer spending causes the rate of inflation to rise. microeconomics macroeconomics e. Optimism about future car sales leads General Motors to hire more auto workers. microeconomics macroeconomics f. Robotic technology reduces the demand for auto workers. microeconomics macroeconomics

A. Micro B. Macro C. Macro D. Macro E. Micro F. Micro

Suppose that the video game company Ultravision releases a new game called "Call of Obligation: Modern Combat 3." This game can be analyzed using the tools of both microeconomics and macroeconomics. Classify each item below according to whether it represents an application of microeconomics or macroeconomics. a. Is Ultravision able to sell all of the "Call of Obligation" games it produces or does it need to produce more? b. How does Ultravision choose to market "Call of Obligation." c. How much will Ultravision pay the developers of the game? d. How much less economic output occurs countrywide because workers call in sick to stay home and play either "Call of Obligation" or another video game? e. How much will Ultravision charge for "Call of Obligation?" f. Have the millions of dollars that people have spent on video games worldwide affected the gross domestic Product (GDP) in their respective countries? g. Has the country's unemployment rate changed as Ultravision hired a huge team of workers to develop the game?

A. Micro B. Micro C. Micro D. Macro E. Micro F. Macro G. Macro

Indicate whether each item describes a primary goal of macroeconomic policy. a. Low unemployment primary macroeconomic policy goal not a primary macroeconomic policy goal b. Eliminating political conflict primary macroeconomic policy goal not a primary macroeconomic policy goal c. To set the optimal price for a pound of peaches primary macroeconomic policy goal not a primary macroeconomic policy goal d. Low inflation primary macroeconomic policy goal not a primary macroeconomic policy goal e. To calculate how much urban residents are willing to pay to protect biodiversity primary macroeconomic policy goal not a primary macroeconomic policy goal f. Rising living standards primary macroeconomic policy goal not a primary macroeconomic policy goal

A. Primary B. Not a primary C. Not a primary D. Primary E. Not a primary F. Primary

Which describes the fairness-efficiency trade‑off? The least efficient economic outcome is the fairest outcome. Government intervention can increase efficiency in a market. There is always a more equitable outcome that is also more efficient. Actions intended to make economic outcomes fairer can cause efficiency to decrease.

Actions intended to make economic outcomes fairer can cause efficiency to decrease.

Which statement describes the equity-efficiency trade‑off? There is always a more equitable outcome that is also more efficient. Government intervention can increase efficiency in a market. Actions intended to make economic outcomes fairer may cause efficiency to decrease. The least efficient economic outcome is the fairest outcome.

Actions intended to make economic outcomes fairer may cause efficiency to decrease.

Which demonstrates a scenario with no opportunity cost? It's Friday night and you stay up late talking and hanging out with your friends. The chemistry club is giving out free pizza for lunch to all who come to their table to get it. Naomi, age 8, is at a bookstore and chooses to buy a book about a young wizard instead of buying a math textbook that she would probably never open. Chez Moi and Chez Nous, two premiere French restaurants with three Michelin stars, both offer you a full time sous chef job at the same salary. You are ecstatic because you know it is a win-win scenario and choose to work for Chez Nous. All of these scenarios have an opportunity cost.

All of these scenarios have an opportunity cost.

An economic institution that facilitates interaction between buyers and sellers is called________________ . A market exists when______________ . A market will______________

An economic institution that facilitates interaction between buyers and sellers is called a market . A market exists when people exchange money for goods and services . A market will always tends toward equilibrium .

In the town of Merryweather, citizens are very serious about their Christmas light displays. Consider each scenario and the type of good described. Bob's Hardware Store stocks a large selection of the most commonly used lights for sale. Bob's lights are common resources. public goods. club goods. private goods. Merryweather's courthouse square is well‑known for its elaborate decorations, including a real Santa for the children. Unlike at the mall, parents are not required to buy a photo before their children can talk to Santa, but the line is long and Santa leaves at 8:00 p.m. Santa is a public good. private good. club good. common resource. Maple Havens, an expensive gated community, has tasteful light displays sponsored by the neighborhood association. Only those who know the code to unlock the gates are able to drive through the streets and enjoy the lights. Maple Havens' lights are club goods. private goods. public goods. common resources. As part of the holiday celebration, the local church bells play carols every evening. The church bells are private goods. common resources. club goods. public goods.

Bob's lights are private goods Santa is a common resource Maple Havens' lights are club goods The church bells are public goods

Using the graph of a production possibilities frontier (PPF), please answer the questions. Which point demonstrates productive efficiency? A B C D At which point on the graph is it possible to produce more tangerines without reducing the quantity of bananas that are also produced? B C D A

C, the point on the curve A, the point inside the curve

Suppose the local government imposes a price floor equal to $350 on choogaluggas. Move the price floor line to reflect this change, then use the graph to complete the three calculations.

Calculate consumer surplus without the price floor (CS without). CS without: $ 31250 Calculate consumer surplus with the price floor (CS with). CS with: $ 11250 Calculate the deadweight loss (DWL) associated with the price floor. DWL: $ 10000

The graph illustrates the market for hotel rooms in Cancun. Suppose the local government imposes a price floor of $300. Move the P* line to reflect the price floor, and place the triangle on the graph to represent the area of the deadweight loss.

Calculate the size of the deadweight loss. size of the deadweight loss: 5000 units Calculate the decrease in consumer surplus caused by the price floor. decrease in consumer surplus: 22500 units

Match the statements to the appropriate category. Each category will contain two statements and each statement is used only once. Assume that pens are a normal good and that apples and oranges are substitute goods. Change in quantity demanded Change in demand Answer Bank The price of oranges rises but the price of apples does not change. Therefore, Billy buys more apples. Since Annie got a raise, she buys more pens. The price of pens decreases, so Annie buys more pens. If the price of apples changes, Billy will change how many apples he buys.

Change in quantity demanded The price of pens decreases, so Annie buys more pens. If the price of apples changes, Billy will change how many apples he buys. Change in demand The price of oranges rises but the price of apples does not change. Therefore, Billy buys more apples. Since Annie got a raise, she buys more pens.

Assume Ireland and Egypt can both produce grain and dates and that the only limited resource is the farming labor force, with land, water, and all other resources plentiful in both countries. Each farmer in Ireland can produce 10 tons of grain or 5 tons of dates in a season. Each farmer in Egypt can produce 10 tons of grain or 25 tons of dates. Which country has the absolute advantage in producing dates? Neither Egypt Ireland Which country has the absolute advantage in producing grain? Egypt Ireland Neither Which country has the comparative advantage in producing dates? Ireland Egypt Neither Which country has the comparative advantage in producing grain? Neither Egypt Ireland

Egypt neither Egypt Ireland

6. Which of the following statements is true of markets? Government intervention in markets should always be avoided. There are no disadvantages of having free markets. Markets discourage competition among firms. Free markets sometimes fail to produce best results for society, but such failure can be reduced by government intervention.

Free markets sometimes fail to produce best results for society, but such failure can be reduced by government intervention.

The table shows the units of output a worker can produce per month in Germany and Korea for two different goods: televisions and personal computers. Use this table to answer the question. Germany Number of televisions per month 40 Germany Number of personal computers per month 10 Korea Number of televisions per month 16 Korea Number of personal computers per month 8 Which of the statements is true? Korea has a comparative advantage in the production of televisions, while Germany has a comparative advantage in the production of personal computers. Korea has a comparative advantage in the production of both goods. Germany has a comparative advantage in the production of televisions, while Korea has a comparative advantage in the production of personal computers. Germany has a comparative advantage in the production of both goods.

Germany has a comparative advantage in the production of televisions, while Korea has a comparative advantage in the production of personal computers.

The table shows the units of steel and personal computers a worker can produce per month in Germany and South Korea. Use this table to answer the question. Tons of steel Personal computers (PCs) Germany 40 10 South Korea 16 8 Which statement about absolute advantage is true? Germany has an absolute advantage in the production of both steel and PCs. South Korea has an absolute advantage in the production of steel, whereas Germany has an absolute advantage in the production of PCs. Neither country has an absolute advantage in the production of either good. Germany has an absolute advantage in the production of steel, whereas South Korea has an absolute advantage in the production of PCs. South Korea has an absolute advantage in the production of both steel and PCs.

Germany has an absolute advantage in the production of both steel and PCs.

Below is a supply curve for a slice of gourmet pizza. Illustrate on the graph the impact of a decrease in price from $8 per slice, denoted by point P★, to $5 per slice. Based on your graph, which of the following correctly describes the relationship between price and quantity supplied. Price and supply move in the same direction. Price and quantity supplied move in the same direction. Price and supply move in the opposite direction. Price and quantity supplied move in the opposite direction.

Graph, move point P to (~5.5, 5) Price and quantity supplied move in the same direction.

Suppose that the economy of El Paso creates only cowboy boots and pecans. The production possibilities frontier (PPF) per year for El Paso is illustrated in the graph and is currently producing at the point labeled A. Move point B to show the economy efficiently producing one thousand more cowboy boots. Now, determine the opportunity cost of producing an additional 1,000 cowboy boots, i.e., shifting from point A to point B. Enter your answer specified to one decimal place. opportunity cost: pecans Shift point C to indicate El Paso increasing production of cowboy boots from point B by another thousand. Determine the opportunity cost of shifting from point B to point C. Enter your answer specified to one decimal place. opportunity cost: pecans This PPF exhibits what kind of opportunity costs? constant decreasing increasing

Graph: point B: (3600, 3000) point C: (0, 4000) a. 1400 pecans b. 3600 pecans c. increasing

Lumber and brick are substitutes in home construction. Consider the market for bricks depicted in the graph. Suppose the price of lumber increases due to new regulations for the logging industry. Shift one or both curves in the graph to illustrate the impact this change will have on the market for bricks. Equilibrium price increases. decreases. remains constant. change is ambiguous. Equilibrium quantity increases decreases. remains constant. change is ambiguous.

Graph: shift demand to the right Equilibrium Price: Increases Equilibrium quantity: increases

Fergie, Eddie, Flea, and Neil are trying to form a band. They each have some basic skills on most instruments, so their current plan is for each of them to rotate among vocals, guitar, bass, and drums. After a year of practice and rehearsals the band still sounds awful. Fergie cannot keep a steady beat when on bass or drums, Flea sounds terrible on everything except the bass, nobody except Eddie can remember all the chords on guitar, and even Neil's own mother thinks his singing sounds like a dying cow. At their current rate, they expect it will be several years before they are good enough to land their first paid performance. None of them have enough money saved up to last that long. They all know you are taking economics and ask your advice. What would you say to them? Change the rotation to be random rather than equal to take advantage of heteroskedasticity. Have each member specialize in the role that they are best in to take advantage of benefits from specialization. Invest their remaining savings in new instruments, as they are at a point where the marginal product of capital exceeds the marginal product of labor. Abandon the band, as continued practice is doomed to suffer diminishing marginal returns. Continue with the current plan, as economies of scale should eventually kick in.

Have each member specialize in the role that they are best in to take advantage of benefits from specialization.

Christine and Paul are deciding how to split their time between writing music and lyrics for their new album. Their PPFs for 72 h of work are shown. Christine and Paul have to write music for 8 songs and lyrics for 12 songs (4 songs already have music). When they are done, they can go to a private island and relax from all their hard work. It is possible that they will use more than 72 h. Once they start writing lyrics and music, assuming their hired help packs for them and their plane is waiting outside their door, in how many hours can they board the plane to their relaxing island getaway?

Hours: 96 Christine will write music for 0 songs Paul will write music for 8 songs Christine will write lyrics for 12 songs Paul will write lyrics for 0 songs

7. Which of the following statements is true? A government free of corruption is an example of a bad institution. Human creativity allows for existing products to improve. Wealthy countries tend to have fewer innovative individuals. Wealthy nations tend to have weak institutions.

Human creativity allows for existing products to improve.

Identify the statements as either a microeconomic issue or a macroeconomic issue. In January of 2014, a person made a personal budget. macroeconomics microeconomics The Canadian unemployment rate was lower in January of 2014 than it was in January of 2012.microeconomicsmacroeconomics A person blames inflation for the general increase in prices at the grocery stores throughout British Columbia. macroeconomics microeconomics A person gets a raise at work. macroeconomics microeconomics

In January of 2014, a person made a personal budget. microeconomics The Canadian unemployment rate was lower in January of 2014 than it was in January of 2012. macroeconomics A person blames inflation for the general increase in prices at the grocery stores throughout British Columbia. macroeconomics A person gets a raise at work. microeconomics

Which scenario would least likely change an individual's behavior? The country of Ravamolk enacts a policy to fine companies 20% of their earnings if the safety standards in their factories do not reach acceptable work conditions. The city of Saskatoon chooses to give its residents a penny for each soda can they recycle in an effort to promote environmental awareness. A basketball team manages to sign a trio of famous basketball stars who then clamor for other players to come join their team to win a guaranteed championship. In an effort to make people eat healthier, the city of Bakersville tells its residents to eat wheat bread instead of white bread.

In an effort to make people eat healthier, the city of Bakersville tells its residents to eat wheat bread instead of white bread.

A student is giving a presentation to his class on the advantages of trading the current benefits of the production of consumption goods for the future benefits that economic investment expenditures will yield. The graph shows a hypothetical production possibilities frontier (PPF) to illustrate this concept. Move the point to the combination of goods that represents an increase in investment expenditures that is also efficient. In this case, economic investment expenditures implies increasing the production of

In this case, economic investment expenditures implies increasing the production of capital goods relative to consumer goods.

How would you expect the inclusion of these previously excluded underground activities to impact the value of Italy's GDP? Decrease the value of GDP. The inclusion of these items will not change the value of GDP. Increase the value of GDP. Select ALL of the statements that correspond to a deficiency in real GDP per capita as an accurate reflection of the well-being of a nation. It does not consider the quality of the environment. It does not take into account the cost of the intermediate goods that go into production. It does not value production that is not intended for sale. It does not put importance on physical health.

Increase the value of GDP. It does not consider the quality of the environment. It does not value production that is not intended for sale. It does not put importance on physical health.

Vincent and Jean are two cooks who work in a village. Each of them can either bake cakes or make pizzas. Every ingredient is readily available to them, and the only scarce resource is the cooks' time. Vincent can bake 10 cakes or make 5 pizzas in an hour. Jean can bake 12 cakes or make 8 pizzas in an hour. Please answer the four questions. 11. Which cook has the absolute advantage in baking cakes? Vincent Neither Jean 22. Which cook has the absolute advantage in making pizzas? Vincent Neither Jean 33. Which cook has the comparative advantage in baking cakes? Neither Vincent Jean 44. Which cook has the comparative advantage in making pizzas? Jean Neither Vincent

Jean Jean Vincent Jean

The following table indicates the labor hours needed to produce one unit of output. Sweater Dress Mary 50 hours 10 hours Kate 90 hours 45 hours Kate has a comparative advantage in __________, and Mary has a comparative advantage in _________.

Kate has a comparative advantage in sweaters, and Mary has a comparative advantage in dresses.

Suppose there are only two goods produced in an economy: phones and meals. Maria is adept at assembling electronics but has poor skills at preparing food. Mike is an accomplished chef but is not very skilled at assembling electronics. Currently Mike and Maria each work independently, and they each produce both meals and phones. However, they are considering trading some of their respective output with each other, but only if that would allow each person to become more prosperous. Which statement is not true? Mike and Maria would gain by using their time making only the one good that they are best at producing. Customers will gain if Mike and Maria decide to specialize in what they do best and trade their output. Mike should produce more food and fewer phones, and Maria should produce more phones and fewer meals. Mike and Maria will both gain only if they trade the same number of phones for the same number of meals.

Mike and Maria will both gain only if they trade the same number of phones for the same number of meals.

Determine if the items represent an example of positive economics or normative economics. The richest 11% of Americans should pay more taxes than the rest of the 9999%. positive economics normative economics A decrease in the supply of coconut will increase the price of German chocolate cake, a good which requires coconut shavings as a key ingredient. normative economics positive economics As minimum wage increases, the prices of all goods and services also tends to increase. positive economics normative economics Social welfare spending in Sweden occupies too large a portion of the national budget. positive economics normative economics

Normative Positive Positive Normative

Which production possibilities frontier (PPF) reflects increasing opportunity costs? PPF 1 PPF 2 PPF 3 PPF 4 Determine what causes the PPF to take that shape. Factors of production can be shifted from widget production to gizmo production with no change in productivity. Factors of production used to produce widgets cannot be used to produce gizmos, and vice versa. There is only one factor of production and it cannot be used in both sectors at the same time. Factors of production can be used in either widget or gizmo production, but some are more productive at producing widgets and some are more productive at producing gizmos.

PPF 4 (Converse PPF graph) Factors of production can be used in either widget or gizmo production, but some are more productive at producing widgets and some are more productive at producing gizmos.

Suppose that Paulie and Vinny each can produce ice cream or t-shirts. The table shows the quantity of each good that Paulie and Vinny each can produce in 11 hour, respectively, if they devote all of their time and effort into making the good. Round all answers to two decimal places. Ice cream (cups) T-shirts (quantity) Paulie 4.00 19.00 Vinny 8.00 15.00 a. What is Paulie's opportunity cost of producing a cup of ice cream? Paulie's opportunity cost: __________________t‑shirts b. What is Vinny's opportunity cost of producing a t-shirt? Vinny's opportunity cost: _______________cups of ice cream c. Paulie has a comparative advantage in and Vinny has a comparative advantage in

Paulie's opportunity cost: 4.75 t‑shirts Vinny's opportunity cost: .53 cups of ice cream c. Paulie has a comparative advantage in t-shirts and Vinny has a comparative advantage in ice cream.

Classify the items according to the expenditure approach to Canada's GDP calculation. Personal consumption expenditures (C) Gross private domestic investment (I) Government consumption and gross investment (G) Exports (EX) Imports (IM) Answer Bank The government builds a new road to accommodate the surge of customers that are driving to a local coffee shop. Tyler purchases a latte from his local coffee shop to boost his energy while working. Taking advantage of its growing reputation, a Canadian coffee shop begins selling T‑shirts online to customers in the United States. A local coffee shop buys a new coffee press to help their workers make drinks more quickly. Colombian coffee beans are sold to Canadian consumers.

Personal consumption expenditures (C): Tyler purchases a latte from his local coffee shop to boost his energy while working. Gross private domestic investment (I): A local coffee shop buys a new coffee press to help their workers make drinks more quickly. Government consumption and gross investment (G): The government builds a new road to accommodate the surge of customers that are driving to a local coffee shop. Exports (EX): Taking advantage of its growing reputation, a Canadian coffee shop begins selling T‑shirts online to customers in the United States. Imports (IM): Colombian coffee beans are sold to Canadian consumers.

Classify each of the statements as an example of positive or normative analysis. The sugar quota in the United States costs consumers $6.08 billion a year. Higher tariffs on imported automobiles would decrease the demand for foreign made cars. International trade should be be limited because it can cause some workers to lose their jobs. International trade makes some people better off and some people worse off. The U.S. should impose import quotas in the market for consumer electronics to help domestic workers. The sugar quota in the U.S. is good public policy and should be made stronger. Answer Bank Positive Normative

Positive Positive Normative Positive Normative Normative

4. Which of the following statements is true of incentives? People respond to financial incentives only. People respond to good incentives but ignore bad incentives. Rules can be established to prevent people from acting on certain incentives. Stealing is an outcome of a response to a good incentive.

Rules can be established to prevent people from acting on certain incentives.

As part of a healthy lifestyle, Alex likes to do yoga. Unfortunately, he works for a firm that has fallen on hard times. As a result, Alex sees his salary cut by 12%. Assuming that yoga is a normal good, shift Alex's demand curve for yoga to illustrate the effects of the salary cut.

Shift line to the left to show a decreased level of demand

In an attempt to increase the consumption of healthy foods, the government offers subsidies to the producers of kale. Show the effect of this subsidy by shifting one or both of the curves in the market for kale shown in the graph.

Shift supply line down & to the right to show an increase in supply

In Louisiana, the price of beef recently increased due to the popularity of the Keto diet. Leather is a byproduct of raising cattle and producing beef for sale. Show the effect of this event by shifting the appropriate curve in the market for leather shown in the graph.

Shift supply line down and to the right to show an increase in the quantity supplied

The graph represents the market for breakfast cereals. Now, suppose that one of the industry's major suppliers of breakfast cereal has decided to exit the market to focus on its snack foods. At the same time, the average price of cereal has increased and the total amount of cereal sales has increased. Manipulate the graph to demonstrate these changes in the market for cereal.

Shift supply line to the left one level, shift demand line to the right two levels

What does the price of diesel fuel in Russell, KS have to do with the price of bread in Boulder, CO? As the price of bread increases in Colorado, farmers use more and more diesel fuel. This drives up the price of diesel fuel. Since farmers in Kansas use diesel fuel‑powered equipment to plant, harvest, and transport grain, an increase in the price of fuel may increase the price of bread. As the price of diesel fuel in Kansas increases, the price of bread in Colorado falls because it is cheaper to plant, harvest, and transport grain. Nothing. All bread in Boulder, CO is produced with grain from locally owned, wind‑powered, organic farm cooperatives.

Since farmers in Kansas use diesel fuel‑powered equipment to plant, harvest, and transport grain, an increase in the price of fuel may increase the price of bread.

Determine which situation is not a source of market failure. The smokestacks of The Steel Magnolia, a decorative ironworks firm, produce tons of dirty smoke, which turns Betty's laundry gray if she hangs it outside to dry. Payton's Peanuts receives a loan from the government to help cover storage costs. This enables Payton to keep her peanuts until market prices rise and she can sell for a higher profit. Ted's Tennis Shoes goes out of business when a competitor begins selling at lower prices. The government of San Francisco denies the owners of the Bayside Apartments' petition to raise rents this year. Shirley's Shrimp boats harvest all the shrimp they can find, even though doing so might mean fewer shrimp will be available in the future.

Ted's Tennis Shoes goes out of business when a competitor begins selling at lower prices.

Suppose you have the information about the productivity of industries in the U.S. and Japan. The numbers in the table are the units of output per hour of work. Use the data to answer the questions. Steel (in tons) Desktop computers Japan 12 6 U.S. 8 2 The U.S. has an absolute advantage in __________. The U.S. has a comparative advantage in __________________

The U.S. has an absolute advantage in neither good . The U.S. has a comparative advantage in steel .

You are the manager of Frito-Lay's Cheese Puffs account, and you notice that when the price of Cheetos increases, there is an increase in demand for Cheese Puffs. What is the economic relationship between these goods that explains this behavior? The increase in the price of Cheetos causes an increase in the demand for Cheese Puffs; therefore, these goods are substitutes. The increase in the price of Cheetos causes a decrease in the demand for Cheese Puffs; therefore. these goods are complements. The increase in the price of Cheetos causes a decrease in the demand for Cheetos; therefore, these goods are substitutes. The increase in the price of Cheetos causes an increase in the demand for Cheese Puffs; therefore, these goods are complements.

The increase in the price of Cheetos causes an increase in the demand for Cheese Puffs; therefore, these goods are substitutes.

One day, a local theme park charges $40 per person for admission, and 10,000 people visit the park. On another day, the park charges $60 per person, and 20,000 people pay to enter the park. Which explanation best describes why the park sees an increase in attendance when the price is higher? High prices signal a high quality park experience. The low-attendance day falls on an autumn Wednesday, while the high-attendance day falls on a summer Saturday. Theme-park tickets are part of a rare class of goods which do not follow the Law of Demand. The higher price gives the park an incentive to expand capacity and permit more visitors.

The low-attendance day falls on an autumn Wednesday, while the high-attendance day falls on a summer Saturday.

Which is NOT an example of a behavior exhibited in a market economy? Nettoyer decides to introduce a soap scent, Pomegranate, in response to Schoon's new soap scent, Blood Orange, and Sauber's award-winning scent, Tangerine. Despite the advice of its business partners, Puna discontinues its most popular lines of clothing, and chooses instead to produce retro jean jackets and purple sweatpants, thinking that jean jackets and sweatpants are bound to make a fashion comeback. For their wedding, Alex and Erika choose Matte Photography instead of Pro Finish Photography, since Matte Photography is cheaper. The president of the European country of Semolina decrees that pasta must be consumed at all meals in an effort to help domestic pasta makers.

The president of the European country of Semolina decrees that pasta must be consumed at all meals in an effort to help domestic pasta makers.

Determine whether each statement reflects positive analysis or normative analysis. a. The richest 1% of Americans should pay more taxes than the remaining 99%. positive analysis normative analysis b. A decrease in the supply of coconut will increase the price of German chocolate cake, a good that requires coconut shavings as a key ingredient. normative analysis positive analysis c. As the minimum wage increases, the prices of all goods and services also tend to increase. positive analysis normative analysis d. Social welfare spending in Sweden occupies too large a portion of the national budget. normative analysis positive analysis

The richest 1% of Americans should pay more taxes than the rest of the 99%.- Normative A decrease in the supply of coconut will increase the price of German chocolate cake, a good which requires coconut shavings as a key ingredient.- Positive As minimum wage increases, the prices of all goods and services also tends to increase.- positive Social welfare spending in Sweden occupies too large a portion of the national budget.- Normative

The day-to-day living conditions of modern Americans are very different from what they were in the 20th century. While doing research for an economics project, Charlie discovers that more households today, as compared to households 100 years ago, have electricity, air conditioning, and a car. Which of the following explains why modern Americans enjoy a higher standard of living than Americans 100 years ago? The invisible hand has guided all nations around the world to this prosperity. There has been economic growth in our society. Americans have prospered and earned more money due to a complete lack of recessions. Market failures are nonexistent. In which field do researchers focus on investigating the phenomena described? Sociology Economics Political Science Business

There has been economic growth in our society. economics

Which statement about Canada's economy is false? Business cycles are a common feature of Canada's economy. From 1962 to 2011, Canada experienced at least three recessions. Deflationary (contractionary) monetary policy contributed, at least in part, to the recession of the early 1990s. Between the years of 1973 and 2003, Canadian real GDP trended downwards. There is not much of a relationship between the growth rate of real GDP (gross domestic product) and the business cycle.

There is not much of a relationship between the growth rate of real GDP (gross domestic product) and the business cycle.

If the price of baseballs goes up from $7.99 to $14.99, what can be expected from suppliers of baseballs as a result? There will be an increase in supply. There will be a decrease in quantity supplied. There will be an increase in quantity supplied. The quantity supplied will not change.

There will be an increase in quantity supplied.

The point at which an economy turns from expansion to contraction is called a business‑cycle peak. Economic growth is typically steady and occurs without many short term fluctuations between expansion and contraction. Unemployment is typically increasing in the time leading up to a peak. The point at which an economy turns from contraction to expansion is called a business‑cycle depression. It is possible that the economic output associated with a nation's most recent business‑cycle trough is higher than the economic output associated with an earlier business‑cycle peak. Recessions are related to GDP, and therefore, are unrelated to business cycles.

True The point at which an economy turns from expansion to contraction is called a business‑cycle peak. False Economic growth is typically steady and occurs without many short term fluctuations between expansion and contraction. False Unemployment is typically increasing in the time leading up to a peak. False The point at which an economy turns from contraction to expansion is called a business‑cycle depression. True It is possible that the economic output associated with a nation's most recent business‑cycle trough is higher than the economic output associated with an earlier business‑cycle peak. False Recessions are related to GDP, and therefore, are unrelated to business cycles.

Andrew, a college student, loves drinking coffee late at night to study for exams. Having a small income, he is used to buying cheap, bad tasting coffee that he needs to grind and brew himself. The coffee tastes putrid but, with enough cream and sugar, Andrew is able to tolerate it. Occasionally, he does go out to Starbucks when he has spare money. After graduation, Andrew gets a job working at a database firm as a programmer. His income is now a healthy $75,000 a year and he decides he's had enough bad tasting coffee. He ends up buying coffee daily from Starbucks even though it costs significantly more. Andrew's demand for Starbucks coffee changed as a result of a change in expectations. a change in the number of consumers. a change in income. a change in a related good or service. a change in technology.

a change in income.

According to the law of demand, an increase in income increases demand. an increase in price decreases demand. a decrease in price increases quantity demanded. a decrease in price increases demand.

a decrease in price increases quantity demanded.

Select the best definition of a public good. a good that is paid for by public funds a good that is nonexcludable and nonrival in consumption a good that is excludable and nonrival in consumption a good that is excludable and rival in consumption a good that is nonexcludable and rival in consumption

a good that is nonexcludable and nonrival in consumption

Suppose that policy makers are concerned that the price of corn may get too high. The market for corn is depicted in the accompanying diagram. a. What type of price control would policy makers use to keep the price of corn from getting too high? a price war a price floor a price ceiling a price wall a price marker b. Suppose that the government implements the price control that you have selected. Which of these prices would be binding? $6 $7 $5

a price ceiling $5

Suppose you have a choice between studying one more hour for your history exam or studying one more hour for your psychology exam. Your decision on what to study should be based on: a) the additional benefits of studying for each class. b) which class you like the most. c) how much time you have already studied for each class. d) your current average scores in each class.

a) the additional benefits of studying for each class.

The accompanying diagram depict's Alex's demand for shoes. a. If shoes cost $50 a pair, how many pairs of shoes will Alex buy? At $50 a pair Alex buys_______________ pairs of shoes b. Alex decides to quit her part-time job working at the student union. Adjust the graph to reflect any resulting change in her demand assuming that shoes are a normal good. c. After quitting her job, if shoes are still $50 a pair, Alex will now buy how many pairs of shoes? At $50 a pair Alex buys pairs of shoes

a. At $50 a pair Alex buys 5 pairs of shoes b. shift demand to the left c. At $50 a pair Alex buys 3 pairs of shoes

Classify each scenario according to whether it represents a change in quantity supplied or a change in supply. Each classification matches two of the scenarios. a. If the price of apples decreases to $5 per bushel, Farmer Jack will supply 5 bushels of apples instead of 10 bushels of apples. b. As the price of apples increases, Farmer Jack increases the number of apples he offers for sale. c. Johnny, the jeweler, increases his inventory because he expects the price of jewelry to increase at the end of the year. d. Since Johnny is a successful jeweler, Jimmy also becomes a jeweler.

a. If the price of apples decreases to $5 per bushel, Farmer Jack will supply 5 bushels of apples instead of 10 bushels of apples. quantity supplied b. As the price of apples increases, Farmer Jack increases the number of apples he offers for sale. quantity supplied c. Johnny, the jeweler, increases his inventory because he expects the price of jewelry to increase at the end of the year. supply d. Since Johnny is a successful jeweler, Jimmy also becomes a jeweler. supply

Economists classify resources, or factors of production, into four general categories. Determine whether each statement about resources is true or false. a. The resource category land refers to all natural resources, including fertile land, forests, mineral deposits, solar and wind energy, and water. b. The resource category labor refers to the productive activities of workers. c. The resource category capital refers to financial assets, such as bank accounts, bonds, certificates of deposits, and stocks. d. The resource category entrepreneurial ability refers to business skills such as the management of resources, the drive to innovate, and the willingness to bear risk.

a. The resource category land refers to all natural resources, including fertile land, forests, mineral deposits, solar and wind energy, and water. true b. The resource category labor refers to the productive activities of workers. true c. The resource category capital refers to financial assets, such as bank accounts, bonds, certificates of deposits, and stocks. false d. The resource category entrepreneurial ability refers to business skills such as the management of resources, the drive to innovate, and the willingness to bear risk. true

Which of the following situations represents an economic problem? a) A student trying to decide how to spend his weekly allowance. b) A country choosing to sacrifice some privacy in order to gain more security. c) Neither situation is an example of an economic problem. d) Both situations are examples of an economic problem.

d) Both situations are examples of an economic problem.

From an economic context, select the correct definition of a market. a place where groceries and other household items are bought and sold the process of using advertising to convince potential buyers to purchase a product an institution that brings together buyers and sellers of goods or services an institution where stocks or bonds are purchased Select all examples of a market. Trader Joe's: a grocery store frequented by "foodie" types the New York Stock Exchange a local farmer's market the free‑agent signing period in the NFL where players hoping to sign with a team interact with teams looking for additional players

a. an institution that brings together buyers and sellers of goods or services b. all Trader Joe's: a grocery store frequented by "foodie" types the New York Stock Exchange a local farmer's market the free‑agent signing period in the NFL where players hoping to sign with a team interact with teams looking for additional players

During the summer, the largest computer game retailer has a massive sale. As prices for computer games fall, consumers purchase more games, ceteris paribus. What does the term ceteris paribus mean in this context? holding all else equal (unchanged) that it is an easy to understand statement and does not require complex analysis that the basic concepts of economics do not apply allowing all economic variables to change Why, if at all, is the ceteris paribus condition important in economic analysis? It allows the analysis of how changes in every economic variable at once affects an economic environment. It allows the analysis of how a single change affects an economic environment. It is not important.

a. holding all else equal (unchanged) b. It allows the analysis of how a single change affects an economic environment.

Classify each resource used in production as land, labor, capital, or entrepeneurs. a. Ore capital entrepreneurs labor land b. Adrianne, a server at Sonic Drive-In entrepreneurs capital land labor c. Farmer Cameron's tractor capital labor land entrepreneurs d. Aunt Sandy's Jammin' Jellies (the business) labor land entrepreneurs capital e. The Rio Grande land labor capital entrepreneurs f. Your coworkers land entrepreneurs labor capital g. Brandon's Taco Truck (the idea) capital entrepreneurs land labor h. Brandon's Taco Truck (the truck itself) capital labor land entrepreneurs i. Lake Wanahoo labor entrepreneurs land capital j. Your favorite bartender land capital entrepreneurs labor k. Which resource earns profits? entrepreneurs capital land labor

a. land b. labor c. capital d. entrepreneurs e. land f. labor g. entrepreneurs h. capital i. land j. labor k. entrepreneurs

Answer the two questions relating to demand and the law of demand. a. Which can cause a shift in the demand curve? A change in the technology used by firms one of the determinants of demand the cost of production the price of a good Which of the choices illustrates the law of demand? Pat wants to buy more candy bars at $2 than at $1. wants to buy more candy bars at $1 than at $2. offers more candy bars for sale at $2 than at $1. None of the choices.

a. one of the determinants of demand b. wants to buy more candy bars at $1 than at $2.

Please select the economic term that is best described by each statement. a. People have limited resources to satisfy unlimited wants. margins recession tradeoffs business cycle entrepreneurship scarcity b. Everything you do requires giving up something (time, money, etc.). scarcity margins tradeoffs financial capital recession budgeting

a. scarcity b. tradeoffs

Use the accompanying graphs below to answer the questions about the market for Apple's current generation iPhone. a. Move the supply and/or demand curve to illustrate how an across-the-board cut in the price of all apps on the Apple App Store affects the market for iPhones. b. Move the supply and/or demand curve to illustrate how a decrease in the price of Samsung's current Galaxy smartphone impacts the market for iPhones. The shift in a is due to a change in the price of a: The shift in b is due to a change in the price of a:

a. shift demand curb to the right b. shift demand curb to the left The shift in a is due to a change in the price of a:complementary good. The shift in b is due to a change in the price of a:substitute good.

To the citizens of the country of Merka, there is no meal better than a hot dog nestled securely in a hot dog bun. Relish is optional, mustard is not. The hypothetical market for hot dogs in Merka is graphed. Suppose that the price of hot dog buns decreases. Illustrate the impact of this change on the market by manipulating the appropriate curve or curves. The equilibrium price of hot dogs remains the same. increases. decreases. The equilibrium quantity of hot dogs remains the same. decreases. increases.

a. shift demand curve to the right to show an increase of demand for hotdogs b. increases c. increases

Indicate whether each statement is true, false, or uncertain. The fact that some cyclists do not buy helmets indicates that life does not have infinite value. Economists suggest that summing the amount of money a person would earn is one way to measure the value of their life. If there were no free-rider problem, questionnaires would be more reliable; thus, cost-benefit analysis would be accurate. Majority voting is an efficient way to decide whether a public good should be provided by the government. Asking community residents how much they would be willing to pay for a security-camera system is a more accurate way to measure benefits than asking them how much they would value the increased security brought by the system. When price signals are available, cost-benefit analysis is more reliable.

a. true b. false c. false d. false e. false f. true

The table presents information about the productivity of digital cameras and personal computers in the United States and Japan. The data are presented in units of output per hour of work. Use this information to answer the question. Digital cameras Personal computers Japan 6 3 United States 8 2 Japan has a(n) ___________________ advantage in producing ______________________ .comparative, digital cameras and personal computers absolute, digital cameras comparative, digital cameras absolute, personal computers

absolute, personal computers

Classify each statement as describing productive efficiency, allocative efficiency, or a situation that is inefficient. Flour, which can be used to make many products, is used to make waffles and muffins because of the high demand for each product. To produce one more bagel, the output of donuts must fall. Herb Farmer decides to use his flour and sugar to make three cakes and three loaves of bread, which his customers have demanded. Herb Farmer makes two cakes and two loaves of bread but uses enough flour to make three cakes and four loaves of bread. If Herb Farmer wants to produce one more cake, he needs to give up two loaves of bread. Herb Farmer decides to use his ingredients to make cakes, but his customers prefer donuts.

allocative efficiency Flour, which can be used to make many products, is used to make waffles and muffins because of the high demand for each product. productive efficiency To produce one more bagel, the output of donuts must fall. allocative efficiency Herb Farmer decides to use his flour and sugar to make three cakes and three loaves of bread, which his customers have demanded. not efficient Herb Farmer makes two cakes and two loaves of bread but uses enough flour to make three cakes and four loaves of bread. productive efficiency If Herb Farmer wants to produce one more cake, he needs to give up two loaves of bread. not efficient Herb Farmer decides to use his ingredients to make cakes, but his customers prefer donuts.

Each of the scenarios occurred this year, but it fails to fit one of the criteria for the definition of Canada's GDP. Please classify the scenarios under the criteria it fails to meet. a. Dr. A. Just trades acne treatments with Kit E. Katz for cat-sitting services. This transaction violates the market value criterion. b. Don E. Brook buys only vintage shirts because he wants a new look. This transaction violates the produced within a certain time frame criterion. c. Easton West buys Roots sweatshirts. Roots is headquartered in Toronto, Ontario but produces in Malaysia. This transaction violates the produced within a country's boundaries criterion. d. Joy Rider makes guacamole from avocados that her neighbor, Bea Kind, gave to Joy, from her tree. This transaction violates the market value criterion. e. Yum n' Yummy restaurant buys onions, zucchini, and squash for use in the famous Yum n' Yummy omelet. This transaction violates the final good or service criterion. f. Trudy Ages buys her dream car that was made in the 1970's. This transaction violates the produced within a certain time frame criterion.

already part of 'term'

Introduction to Economics — End of Chapter Problems Kivalliq Business Development Centre offers assistance to individuals interested in starting and growing businesses in Nunavut. Suppose they sponsor a business plan competition, offering a $10,000 prize to the entrepreneur who develops the best business plan. The $10,000 prize is an example of

an incentive

Please determine which economic feature is described by the statements below. A recession occurs as the result of a significant decline in national output. If such a decline goes on for an especially long time, the period will be considered a depression . A peak is the highest point before output decline, while the lowest point during the decline is known as a business or economic trough .

answers included in 'term'

9. A trade‑off analysis entails: gaining data on terms of trade for a given transaction. exchanging one good for another at a similar price. assessing the costs and benefits of different alternatives. consideration of purely financial values in decision‑making.

assessing the costs and benefits of different alternatives

What factors into the opportunity cost for a decision? the difference between the benefits of the first and second best choices benefits from the best foregone alternative the sum of all benefits from all foregone alternatives actual financial cost of the decision time spent due to the decision

benefits from the best foregone alternative financial cost of the decision Time spent due to the decision

2. Opportunity cost is the value of the: best alternative which is given up when a decision is made. alternative that is selected when a decision is made. alternative that is selected and the next best alternative. worst alternative available to the decision maker.

best alternative which is given up when a decision is made.

3. Specialization leads to gains for: only the seller in a transaction. only the buyer in a transaction. both the buyer and the seller involved in a transaction. neither the buyer or seller in a transaction, but the government that is authorizing the transaction.

both the buyer and the seller involved in a transaction.

The Salmon River is famous for its abundance of salmon. Because the river is part of the community of Salmon Falls, anyone is able to fish in it. At the most recent town hall meeting, the mayor of Salmon Falls expressed concern that the river was being overused. She said that fishermen had no incentive to use the river sustainably since their goal was to sell as much salmon as possible. This is an example of the free‑rider problem. moral hazard. asymmetric information. adverse selection. common property resource.

common property resource.

Which of the four options best represents specialization and its relationship with trade? absolute advantage economic crises comparative advantage all the above

comparative advantage

Suppose you and your roommate have the following agreement when it comes to cleaning your apartment: each person washes her or his own dishes after each meal. The principle of trade you just learned tells you that it would be more efficient if: a) both of you wash your own dishes after each meal. b) neither of you wash the dishes after eating. c) each of you wash half of all the dirty dishes. d) one of you wash all the dishes while the other does a different chore.

d) one of you wash all the dishes while the other does a different chore.

Tyrone has three options on how to spend his Saturday afternoon: to go out with friends, watch a movie, or wash his car. Tyrone's opportunity cost of washing his car would be: a) the value of going out with friends. b) the value of watching a movie. c) the value of going out with friends AND watching a movie. d) the value of going out with friends OR watching a movie.

d) the value of going out with friends OR watching a movie.

Which of the scenarios are examples of free riding? a. Bob can pay to support his local public radio station, which depends on donations to be as effective as possible. Bob listens to the radio station several hours per day but never donates since he suspects that other people will donate enough to keep the station on the air. b. Drew always buys the lunch special for $5 at the restaurant across the street from where he works. If he decided to eat at the restaurant after 3:00 p.m., however, he would be unable to get the lunch special, and would instead have to pay $10$ for the same food. c. Jim is working on a group project for a class in which he wants a high grade. However, since the grades are assigned to the group as a whole and he knows that the other group members will pick up most of the extra work, Jim calls in sick and plays video games on his Dream Station 64. d. Karl never drives at night, and gets no benefit from street lamps at all. Street lamps are nonexcludable and nonrival in consumption. When the community group tries to collect money to build street lamps, Karl does not donate any money.

free-riding not free-riding free-riding not free-riding

Milk and cereal are an example of complementary goods. Which definition best describes this relationship? goods related in such a way that an increase in quantity demanded of one leads to a increase in the price of the other goods related in such a way that an decrease in price of one leads to a decrease in the demand for the other goods related in such a way that an increase in price of one leads to a decrease in the demand for the other goods related in such a way that an increase in price of one leads to an increase in the demand for the other

goods related in such a way that an increase in price of one leads to a decrease in the demand for the other

The accompanying graph represents a demand curve for a bucket of golf balls at the local driving range. Use the graph below to illustrate graphically the effects of an increase in price from $5 per bucket, denoted by the point P★, to $7 per bucket. Based on your movement of the graph, which of the following correctly decribes the law of demand. Price and demand move in the opposite direction. Price and demand move in the same direction. Price and quantity demanded move in the opposite direction. Price and quantity demanded move in the same direction.

graph, move point P to (X, 7) Price and quantity demanded move in the opposite direction.

During the summer, the largest computer game retailer has a massive sale. As prices for computer games fall, consumers purchase more games, ceteris paribus. What does the term ceteris paribus mean in this context? holding all else equal (unchanged) allowing all economic variables to change that it is an easy to understand statement and does not require complex analysis that the basic concepts of economics do not apply Why, if at all, is the ceteris paribus condition important in economic analysis? It is not important. It allows the analysis of how a single change affects an economic environment. It allows the analysis of how changes in every economic variable at once affects an economic environment.

holding all else equal (unchanged) It allows the analysis of how a single change affects an economic environment.

In a market economy, individuals' economic lives are said to be interrelated with many other individuals and firms. almost completely controlled by government regulation. illegal and in violation of government rules on prices and sales. based more on production than on consumption.

interrelated with many other individuals and firms.

Holding everything else constant, producers are willing to offer more units for sale when the price at which they can sell their product increases. This concept is known as the law of supply. profit-maximizing condition. law of one price. maximal output.

law of supply

Megan has a 11 hr gap in her course load for the fall semester. There are two courses available for her to take at that time: reading piano sheet music and beginning rock climbing. She does not have any experience with piano or rock climbing. In the end, she decides to enroll in the rock climbing course, despite her fear of heights. Identify which activity exhibits a potential trade-off with enrolling in rock climbing. learning rock climbing skills learning to read piano sheet music overcoming her fear of heights none of the above

learning to read piano sheet music

According to the graph of the production possibilities frontier, what is the opportunity cost of the first widget? about 4 gizmos about 8 widgets about 1 widget less than 0.5 gizmos What best explains the shape of the production possibility frontier in the graph? The production of widgets and gizmos require the same resources to produce. Some resources used to produce one of the goods are not as productive when they are used to produce the other good. This economy has the capacity to produce different combinations of widgets and gizmos. Producers can move from one point to another on the production possibilities frontier in response to consumers' demands.

less than 0.5 gizmos Some resources used to produce one of the goods are not as productive when they are used to produce the other good.

Introduction to Economics — End of Chapter Problems Nunavut Arctic College offers programs in health, education, law, culture, arts, and business. It also offer five types of apprenticeship program to prepare interested individuals for jobs in specific trades. Of these apprenticeship programs, one is in the field of carpentry, and another is in the field of housing maintenance. There are no trees in Nunavut. Why would Nunavut Arctic College offer apprenticeships in carpentry and house maintenance? a. The scarcity of lumber means that the opportunity cost of repairing and maintaining items made with lumber in Nunavut is than the opportunity cost of purchasing new items made with lumber. b. Participating in an apprenticeship program is a form of

less, specialization

In a competitive market, all of the choices along the production possibility frontier display ________________ efficiency, while the specific choice on the frontier that society picks is the one with _______________ efficiency. productive; allocative allocative; productive allocative; allocative productive; productive

productive; allocative

Suppose that a recent study shows that non‑fatal traffic accidents have risen due to an increase in aggressive driving. This information comes after the implementation of mandatory seat belt laws requiring all drivers and passengers to wear seat belts. This relationship could be an example of adverse selection. moral hazard. a public good. the free‑rider problem. tragedy of the commons.

moral hazard

Consider the market for iced coffee. Suppose that the price of an iced coffee falls from $4.25 to $3.50. Assuming that the point on the graph below corresponds to the initial price of $4.25, move the point to a new position on the curve to show the impact of this price change (holding everything else constant).

move line to intersect the demand curve at $3.50

Identify the characteristics that describe each good listed below. Note that each good will be described by two characteristics. "Rivalrous" is also referred to as "rival in consumption." Consider only the immediate benefits and costs, not any externalities.

nonexcludable nonrivalrous national defense excludable nonrivalrous Pay-Per-View cable television excludable rivalrous a Hot Pocket sandwich excludable rivalrous private classroom education excludable rivalrous pajamas excludable rivalrous a unicycle

8. Economic goals such as economic growth, low inflation and low unemployment are: not always aligned. unachievable objectives. ignored by policy-makers. under the direct control of businesses.

not always aligned.

Answer the two questions relating to supply and the law of supply. Which would cause a shift in the supply curve? This would happen if buyers' incomes changed. the demand curve shifted. one of the determinants of supply changed. the price of a good changed. What would happen if the price of kayaks increased? If the price increased, sellers would offer more kayaks for sale. the supply of kayaks would increase. sellers would offer fewer kayaks for sale. the supply of kayaks would decrease.

one of the determinants of supply changed. sellers would offer more kayaks for sale.

The table shows the units of steel and personal computers a worker can produce per month in Germany and South Korea. Use this table to answer the question. Tons of steel Personal computers (PCs) Germany 40 10 South Korea 16 8 The opportunity cost of one ton of steel in Germany is two PCs. one-quarter of a PC. one-half of a PC. four PCs. The opportunity cost of one ton of steel in South Korea is two PCs. one-quarter of a PC. one-half of a PC. four PCs. Which country has a comparative advantage in steel production? Germany Neither South Korea

one-quarter of a PC. one-half of a PC. Germany

This year is expected to be a great one for selling walking shoes in Georgia. At very low prices, only the most efficient shoemakers are able to sell. There are two shoe producers that operate with the most cost-effective equipment and skilled personnel, each of which can put 1000 pairs of shoes in the market at $10.00. At a higher price, eight more shoemakers will enter the market. Each producer makes 1200 pairs of shoes at $25.00 per pair. If the price goes to $40.00 per pair, the existing firms increase production to 1400 pairs of shoes each, plus four small shops open, each of which produces 500 pairs of shoes. Using the information above, graph the supply curve for walking shoes by dragging the provided red points to the correct coordinates of price and quantity.

points at (2000, 10), (12,000, 25), (16000, 40)

5. When a customer chooses to accept an item of value from a business because it requires no incremental spending on the part of the customer, the customer is demonstrating the principle that: markets are an efficient way to organize economic activity. specialization produces benefits for society. customers are smarter than businesses. rational people think at the margin.

rational people think at the margin.

Economic growth is most accurately measured by changes in which variable? wages nominal GDP the capital stock real GDP For living standards to rise, what must occur? Nominal GDP must grow faster than the population. Output must grow faster than the population. The capital stock must grow faster than the population. The labor force must grow faster than the population.

real GDP Output must grow faster than the population.

Please select the economic term that is best described by each statement. People have limited resources. scarcity margins recession entrepreneurship business cycle tradeoffs Everything you do requires giving up something (time, money, etc.). recession budgeting tradeoffs scarcity financial capital margins

scarcity tradeoffs

The accompanying table contains the individual demand schedules of dark chocolate for Vanessa and Angela. Assuming they are the only people in the market for dark chocolate, place each of their individual demand curves and the market demand curve at the correct locations on the accompanying graph.

see picture

The figure shows the supply and demand for online music. Suppose that an economic downturn decreases household wealth and erodes consumer confidence. Move the supply and/or demand curves to reflect the primary effect this would have on the market for online music. You can assume that online music is a normal good. Also select the end result of equilibrium price and quantity. Equilibrium price increases. decreases. remains constant. change is ambiguous. Equilibrium quantity increases. decreases. remains constant. change is ambiguous.

shift demand to the left decreases decreases

The table contains the demand and supply schedule for apartments in a city. Suppose the city council feels that the equilibrium rent is too high and imposes a price ceiling of $750/month. The price ceiling results in a surplus. shortage. The city now has a shortage or surplus of how many apartments?

shortage 4500

Which of the following economic concepts adequately describe the Canadian province of Nunavut? technology transfer specialization scarcity trade

specialization scarcity trade

Nunavut has no trees but plenty of fisheries and gold mines. Nunavut residents would like to improve their lot and gain access to more goods and services. What could help them accomplish their goal? They could plant more trees and sell them abroad. allow fishermen to trade with gold miners. specialize in mining and fisheries and engage in trade. hire soil experts to enhance agricultural productivity.

specialize in mining and fisheries and engage in trade.

The table shows the tons of steel or number of computers a worker can produce per week in Germany and South Korea. Use this table to answer the question. Steel Desktop Computer Germany 9 2 South Korea 4 2 Germany should specialize in steel production, export steel, and import computers. produce both goods because it has an absolute advantage in the production of both goods. specialize in computer production, export computers, and import steel. produce both goods because neither country has a comparative advantage.

steel production, export steel, and import computers.

10. Human creativity is fostered by a(n) _____ and _____. strong educational system; incentives for people to work hard. extensive museum network; widely available patrons. government managing the economy; docile citizens. sizable budget deficit; strong financial institutions.

strong educational system; incentives for people to work hard.

Consider the maximum amount of a product that sellers are willing and able to provide for sale over a relevant range of prices, holding all other factors constant. Economists call this supply. sales volume. maximal output. profit maximization. When the market price of a good increases, the amount that sellers are willing to offer for sale increases. Economists call this the law of supply. the maximal quantity curve. the law of large numbers. the price-quantity principle.

supply the law of supply

Recently, a series of studies have demonstrated the considerable beneficial health effects of food and drink derived from the amaranth plant. This has affected consumer tastes for amaranth flour, pods, root, etc. At the same time, particularly favorable weather has resulted in a bumper crop of amaranth plants. Show the impact of these changes by properly shifting the appropriate curve or curves in the graph.

supply to the right demand to the right

Select the correct definition of the term "comparative advantage." the ability to produce a good or service at a lower opportunity cost than another the ability to produce more of a good or service than another over a specified time period the ability to produce less of a good or service than another over a specified time period the ability to produce a good or service at a higher opportunity cost than another a nation offering more favorable trade policy with its allies than with other countries When trading with more developed countries, less developed countries do not have a comparative advantage in the production of any goods or services. less developed countries have a comparative advantage in the production of all goods or services. less developed countries have a comparative advantage in the production of some goods or services.

the ability to produce a good or service at a lower opportunity cost than another less developed countries have a comparative advantage in the production of some goods or services.

b. Which of the following are potential consequences of a price ceiling on bread? a decrease in the opportunity cost of searching for bread the development of a black market in bread a decline in the quality of bread a shortage of bread

the development of a black market in bread a decline in the quality of bread a shortage of bread

The price system helps agents allocate resources to satisfy human wants in the most efficient way possible. Prices incorporate information about each statement except the number of firms in a competitive market. future market conditions. how much every individual values a good. the most efficient use of resources. Which statement is not likely to occur in a competitive free market economy? firms unable to adapt or innovate continuing to operate due to government support firms competing by adjusting their prices some firms exiting the market because they are unable to compete suppliers increasing production in response to increased prices

the number of firms in a competitive market. firms unable to adapt or innovate continuing to operate due to government support

The law of supply explains the negative relationship between price and quantity supplied. the positive relationship between price and quantity demanded. the positive relationship between price and quantity supplied. the negative relationship between price and quantity demanded.

the positive relationship between price and quantity supplied.

Demand is best described as the quantity of a good or a service that people will offer for sale at different possible prices. the quantity of a good or service that consumers will substitute when the price of a good changes. the total satisfaction that consuming a good provides people at different prices. the quantity of a good or a service that people are willing and able to purchase at different possible prices. the additional satisfaction derived from a quantity of goods and services obtained when income increases The law of demand says that higher prices cause buyers to demand more. buyers demand lower prices. higher prices cause less demand. as the price of a good increases, buyers are willing and able to purchase less. as the price of a good decreases, buyers are willing and able to purchase less. In a market economy, there is _________________relationship between the price of a good and the amount of a good that buyers are willing and able to purchase.

the quantity of a good or a service that people are willing and able to purchase at different possible prices. as the price of a good increases, buyers are willing and able to purchase less. an inverse or negative

Suppose the University Health Center receives flu vaccinations at the beginning of each flu season, and that they offer these vaccines for the market price of $20.00 each. Assume that college students have varying budgets. Some have some money to spare, some are on a very tight budget. Keep in mind that some students have pre‑existing conditions, such as asthma and diabetes, that place them at high risk for the flu. Who will receive the vaccines if the University Health Center sells them for the $20.00 market price? the students who will pay $20.00 for them the students who most need them the students who most want them Suppose the school sells all of its vaccines at the market price of $20.00. What has it managed to maximize? fairness efficiency social interest Suppose now that the school wishes to make sure no students with diabetes or asthma go without the drug because they cannot afford it. Because it does not know the budget of each student, the Health Center decides to offer vaccines free to students who can provide a doctor's note stating they have a pre‑existing condition. The school is now seeking a greater degree of efficiency. fairness. self‑interest.

the students who will pay $20.00 for them efficiency fairness.

1. Economics is defined as: the study of how individuals, businesses, and societies make decisions to maximize their well-being given limited resources. the study of the fundamental nature of problems, such as those connected to reality and existence. the study of human culture and its evolution over time around different regions across the world. study of how individuals and society use unlimited resources to fulfill their needs and wants.

the study of how individuals, businesses, and societies make decisions to maximize their well-being given limited resources.

What is the main goal of macroeconomic policy activism? to increase aggregate demand by expanding the size of the federal government to increase aggregate demand through tax cuts to ensure that only politicians that believe in Keynesian economics get elected to reduce the severity of business cycles to increase government debt

to reduce the severity of business cycles

Which is the best definition of efficiency? when somebody can be made better off without making someone worse off when nobody can be made better off without making someone worse off when the only way somebody can be made better off is by making another better off when everyone can be made better off by using resources more wisely when everybody is as well off as possible

when nobody can be made better off without making someone worse off