Macroeconomics- Test 1

Economists use ____________ to make things simpler and focus attention on what really matters.

assumptions

What is the formula for slope?

(Y2-Y1)/(X2-X1)

Which of the following is not a factor of​ production? A. Entrepreneurship. B. Money. C. Human capital. D. Land.

B (Money)

Normative statements answer questions like​ "What will happen​ if..." T/F

False

Economic decisions are made at every level of society. When we try to decide which production method to use among several alternatives, which of the following key economic questions are we trying to answer?

How do we produce the products?

Which of the following is a positive economic statement? -If minimum wage rates rise, then unemployment will rise. -Full employment policies should be pursued. -We should tax the wealthy more and use the money to provide services for the poor. -The government should do something to help the homeless.

If minimum wage rates rise, then unemployment will rise.

How would requiring a​ $0.01 charge to send commercial​ e-mail influence the volume of​ spam?

It would reduce the rational​ self-interest to spam

Is the president doing a good​ job? Positive or Normative

Normative

Should the government raise​ taxes? Positive or Normative

Normative

Should the highway speed limit be​ raised? Positive or Normative

Normative

Which of the following are NOT essential components of an economic model? -Assumptions -Normative Statements -Hypotheses -Variables

Normative Statements

_____________ questions study the concept of what ought to be. _____________ questions study the concept of what is.

Normative, Positive

What will happen to my income if I have to pay more​ taxes? Positive or Normative

Positive

Who is the United States' largest trading​ partner? Positive or Normative

Positive

Economic models are:

Simplifications of reality that focus only on key relationships and ignore less relevant details

A​ small, one-unit change in value is called

a marginal change

An arrangement that allows buyers and sellers to exchange things is called

a market

Graphs are often used in economics because they:

can simplify complex topics

economic models often simplify the real world by holding all things equal and changing one variable to determine the impact of the change. The "all things equal" assumption is also known as:

ceteris paribus

Economic models are used to

explore decision making by​ individuals, firms and other organizations

Macroeconomics can be used to understand all of the topics listed below EXCEPT -how a consumer decides between the purchase of two different cars -how the national economy works -what causes economic booms and recessions -national unemployment trends

how a consumer decides between the purchase of two different cars

Economics:

is concerned with how people respond to incentives

The resources provided by nature and used to produce goods and services are also known as:

natural resources

The stock of computers, factory buildings, and machine tools used to produce goods is known as:

physical capital

Macroeconomics is concerned with all of the following EXCEPT -unemployment rates -political party affiliation -inflation rates -standard of living

political party affiliation

A​ 22-year old student is asking a __________ question when she considers the opportunities opened after she finishes graduate school. The decision of whether government should provide forgiveness for student loan debt is a __________ question.

positive, normative

An economist is most likely to create an economic model concerning

pricing adopted by a business with increased competition

economics is the study of choice under conditions of:

scarcity

An economic model is

simplified representation of an economic environment

The slope of a curve measures:

the change in the vertical variable in response to the change in the horizontal variable

There is a negative relationship between two variables if

they move in opposite directions

The slope of a straight line equals the change in the value on the _________ axis _________ by the change in the value of the other axis measured between any two points on the line.

vertical, divided

Deciding how a​ society's products are distributed among its citizens answers the economic question of:

who consumes the products produced

If the price of a 32GB memory card decreases from​ $25 to​ $20, the percentage change is

-20%

What is the percentage change in price for a shirt that was marked down from $40 to $28?

-30%

If the variable on the vertical axis increases by 24 and the variable on the horizontal axis decreases by​ 3, the slope of the line is

-8

What type of graph would show a negative and increasing relationship between the X axis and the Y axis?

A curve that would start high on the Y axis and decrease as the X axis continued

What is the​ economist's solution to the congestion​ problem?

Charge a toll during rush hour

Which of the following is one of the three basic questions a society must​ answer? A. Who consumes the​ products? B. How do we produce the​ products? C. What products do we​ produce? D. All of the above.

D (All the Above)

When a business asks how much its sales would increase if another employee is​ hired, it is considering which of the​ following? A. Ceteris paribus B. Making an assumption C. Using an incentive D. Thinking at the margin

D (Thinking at the Margin)

Which of the following is not one of the three questions​ individuals, firms, and governments use to make economic​ decisions? A. What products do we​ produce? B. How do we produce the​ products? C. Who consumes the​ products? D. Where is the product​ made?

D (Where is the product made?)

Positive Statements answer questions like​ " What ought to happen​ to..." T/F

False

Adam Smith suggested that people act in their own self−interest T/F

True

Economists may differ in their conclusions from positive analysis. T/F

True

If the president of Columbia commented that "we should do something to reduce inflation in Columbia", this would be an example of:

a normative statement

Understanding economics can help policymakers devise strategies to do all the following EXCEPT -increase our standard of living -reduce poverty levels -eliminate climate change -encourage business formation

eliminate climate change

A manager who studies _______________ will be better equipped to understand the complexities of interest rates and inflation and how they affect the firm.

macroeconomics

A change in a variable measured on an axis of a graph causes a ________ the​ curve, while a change in a relevant variable that is not measured on an axis causes a ________ the curve.

movement along, shift in

Because resources are limited:

people must make choices