ECON 101 - Study Guide
For a good to be considered a public good it must be: a. Non-exclusive b. Abundant c. Non-rival d. Exclusive
a. Non-exclusive and c. Non-rival
Assume the following: The maximum price that Joe is willing to pay for an office chair is $100 The minimum price that Frank is willing to accept for an office chair is $50 If they agree on a price of $75 to make an exchange, which is true? a. Total surplus is $100 b. Produce surplus is $75 c. Consumer surplus is $25 d. Consumer surplus is $75
c. Consumer surplus is $25
if the supply curve remains static, what will happen in the market if there is an increase (rightward shift) in demand? a. Price will decrease; Quantity will increase. b. Price will increase; Quantity will decrease c. Price will increase; Quantity will increase d. Price will decrease; Quantity will decrease
c. Price will increase; Quantity will increase
Which of the following statements are accurate? a. Monopoly is the most common market structure b. Perfect competition is the most common type of market structure c. The first anti-trust law was the Sherman Act in 1890 d. Markets have become more concentrated since the early 1980s
c. The first anti-trust law was the Sherman Act in 1890 and d. Markets have become more concentrated since the early 1980s
True or False: Taxing a product is one method of correcting for a positive externality
False
Put the timeline in order: 1865 - - - - - - 2023
The Gilded Age The Progressive Era The Great Depression The Great Society The Reagan Revolution The Great Recession
True or False: One issue with price ceilings is that they don't provide an incentive for consumers to reduce their consumption in the way they would in a free market price scenario.
True
What are ways that the government can correct for a negative externality? a. Ban it b. Tax it c. Subsidize it d. Limit access to it
a. Ban it, b. Tax it, and d. Limit access to it
What items does "Core CPI" omit? a. Energy b. Luxury Items c. Food d. Inferior Goods e. Retail Sales
a. Energy, c. Food, and d. Inferior Goods
Which of the following statements are accurate? a. It is hard to enforce anti-trust laws (under the consumer welfare standard) on big tech firms due to their business model b. Judge Don Dokken is most responsible for the advancement of the consumer welfare standard c. Markets becoming more concentrated reduces the availability of substitutes for the consumer. d. Oligopolists have few barriers to entry into the market
a. It is hard to enforce anti-trust laws (under the consumer welfare standard) on big tech firms due to their business model and c. Markets becoming more concentrated reduces the availability of substitutes for the consumer.
Which of the following statements are accurate? a. Price elasticity of demand is influenced by the availability of substitute goods. b. When income levels increase, demand for inferior goods decrease c. When income levels increase, demand for normal goods decrease d. The law of demand states that price and Qd vary inversely, ceteris paribus
a. Price elasticity of demand is influenced by the availability of substitute goods, b. When income levels increase, demand for inferior goods decrease, and d. The law of demand states that price and Qd vary inversely, ceteris paribus.
If the demand curve remains static; what will happen if there is decrease (leftward movement) of supply a. Price will increase; Quantity will decrease b. Price will increase; Quantity will increase c. Price will decrease; Quantity will increase. d. Price will decrease; Quantity will decrease
a. Price will increase; Quantity will decrease
What is the biggest GDP category using the expenditures method? a. Investment spending b. Consumption spending c. Government spending d. Net export spending
b. Consumption spending
What do the grey bars in the FRED database charts indicate a. Periods where the President was a Republican b. Recessionary periods c. Periods where the President was a Democrat d. Periods where the Congress was controlled by Republicans e. Periods where the Congress was controlled by Democrats
b. Recessionary periods
Which agency is responsible for calculating the Unemployment rate? a. BEA b. CIO c. BLS d. NBER e. IDK
c. BLS
If the demand curve remains static; what will happen if there is an increase (rightward movement) of supply a. Price will increase; Quantity will decrease b. Price will increase; Quantity will increase c. Price will decrease; Quantity will increase. d. Price will decrease; Quantity will decrease
c. Price will decrease; Quantity will increase.
Which country has the highest GDP in the world in nominal terms? a. China b. Japan c. India d. USA e. Germany
d. USA
True or False: The unemployment rate is a leading indicator of a recession
False
True or False: The vast majority of economists advocate price controls as effective means of reining in high prices.
False
Categorize the types of unemployment based on the scenarios below Frictional - Structural - Cyclical - Options: - Don Dokken quits his job to move to another city and look for work - Shirley Manson loses her job as cashier when "Waytoobig Warehouse" installs a bank of self-service checkouts - Stan Smith is let go due to slower sales during a recession - Lizzy Hale quits her job to look for a better one - Corey Taylor loses his job in the factory when new capital is put into the production process. - Rick Sanchez is let go when the company he works for goes bankrupt during a recession
Frictional - Don Dokken quits his job to move to another city and look for work; Lizzy Hale quits her job to look for a better one Structural - Corey Taylor loses his job in the factory when new capital is put into the production process; Shirley Manson loses her job as cashier when "Waytoobig Warehouse" installs a bank of self-service checkouts Cyclical - Stan Smith is let go due to slower sales during a recession; Rick Sanchez is let go when the company he works for goes bankrupt during a recession
Categorize the mergers below Amazon buys a toilet paper manufacturer Wal-Mart and Target merge PetSmart buys Purina Kroger and Wal-Mart merge
Horizontal Merger: Kroger and Wal-Mart merge, Wal-Mart and Target merge. Vertical Merger: Amazon buys a toilet paper manufacturer, PetSmart buys Purina.
Match the cycle theory with the concept Business cycles are caused by the "Animal Spirits - Business cycles are caused by bad central bank policy - Business cycles are caused by misinterpretations about time preferences - Business cycles are caused by sudden, unexpected events - Options: Austrian Theory, Keynes, Real Business Cycle Theory, and Monetarism
Keynes Monetarism Austrian Theory Real Business Cycle Theory
Which events will move the demand curve left or right? The price of a substitute good increases The product is an inferior good and income levels decrease The price of a substitute good decreases The number of people in the market decreases The number of people in the market increase The product is a normal good and income levels decrease
Leftward: The product is a normal good and income levels decrease, The price of a substitute good decreases, and The number of people in the market decrease. Rightward: The price of a substitute good increases, The product is an inferior good and income levels decrease, and The number of people in the market increase.
Which of the following will cause the supply curve to move in a specific direction? There is a severe supply chain issue with a major component of production The price of raw materials decreases One or more producers in the market exits One or more producers enters the market The price of raw materials increases substantially Technology in the production of the product increases substantially
Leftward: There is a severe supply chain issue with a major component of production, One or more producers in the market exits, and The price of raw materials increases substantially. Rightward: The price of raw materials decreases, One or more producers enters the market, and Technology in the production of the product increases substantially.
Based on our in-class discussion, categorize the goods as "likely elastic" or "likely inelastic" Movie tickets Cigarettes Designer shoes Insulin Name brand laundry detergent Gasoline
Likely elastic: Movie tickets, Designer shoes, and Name brand laundry detergent. Likely inelastic: Cigarettes, Insulin, and Gasoline.
Sort the externality into the correct column Illegal Drugs Alcohol abuse Well maintained yards in a neighborhood Flu shots Obesity Pollution Higher education
Negative: Illegal Drugs, Alcohol abuse, Obesity, and Pollution. Positive: Well maintained yards in a neighborhood, Flu shots, Higher education.
True or False: A strong brand identity can be a barrier to entry for potential competitors
True
True or False: Insulin tends to be an inelastic product
True
True or False: Marginal thinking means considering the benefits of "one more" versus the costs of "one more"
True
Which of the following statements are accurate? a. An increasing price serves as an incentive for producers to make more product. b. A price ceiling can create a shortage in the market c. An increase in price encourages more consumption d. At equilibrium Qs=Qd
a. An increasing price serves as an incentive for producers to make more product., b. A price ceiling can create a shortage in the market, and d. At equilibrium Qs=Qd
Referring to the graph below, which of the following statements are true? a. Area A represents consumer surplus b. Equilibrium price is Qe c. Total Surplus is A-B d. Area B represents producer surplus
a. Area A represents consumer surplus and d. Area B represents producer surplus
Which of the following statements are accurate? a. Classical economic theory tended to focus more on the supply side of the market b. Adam Smith is know for the invisible hand analogy c. Alfred Marshall is credited with starting the anti-mercantilist movement d. Behavioral economic theory believes in the consistent rationality of economic actors
a. Classical economic theory tended to focus more on the supply side of the market and b. Adam Smith is know for the invisible hand analogy
Which of the following statements are accurate? a. Inflation can caused by demand or supply side factors b. Inflation is described as "too few dollars chasing too many goods" c. The Federal Reserve has a target of 2% inflation d. During the Great Inflation period of the 1970's inflation reached over 20% e. The CPI gives a higher weighting on housing than does the PCE
a. Inflation can caused by demand or supply side factors, c. The Federal Reserve has a target of 2% inflation, and e. The CPI gives a higher weighting on housing than does the PCE
Which of the following is true of GDP? a. It only measures the output of final goods and services b. It doesn't take into account the value of household labor c. It is generally reported to the public monthly d. It is calculated by the Bureau of Labor Statistics e. Real GDP does not take into account inflation; nominal GDP does
a. It only measures the output of final goods and services and b. It doesn't take into account the value of household labor
Which of the following statements are accurate? a. John Meynard Keynes was a supporter of government intervention during a recession. b. John Meynard Keynes is considered the father of neo-classical economic theory. c. John Meynard Keynes wrote the "Wealth of Nations" d. John Meynard Keynes is quoted as saying "in the long run we are all dead"
a. John Meynard Keynes was a supporter of government intervention during a recession. and d. John Meynard Keynes is quoted as saying "in the long run we are all dead"
Which of the following statements are accurate? a. Labor force participation among prime age men has been in long-term decline b. Full employment is when everyone that wants a job has one. c. Unemployment insurance comes from the New Deal and is considered an automatic stabilizer d. Unemployment impacts high school graduates at a higher rate then bachelors degree holders e. Machines replacing people in the production process is referred to as frictional unemployment
a. Labor force participation among prime age men has been in long-term decline, c. Unemployment insurance comes from the New Deal and is considered an automatic stabilizer, and d. Unemployment impacts high school graduates at a higher rate then bachelors degree holders
Which of the following statements are accurate? a. Mercantilism was a trade policy aimed at building huge trade surpluses. b. Mercantilism has been the primary trade goal since the 1800s c. David Hume and Adam Smith both rejected mercantilism as good policy d. David Hume was a staunch supporter of mercantilism
a. Mercantilism was a trade policy aimed at building huge trade surpluses, and c. David Hume and Adam Smith both rejected mercantilism as good policy
If the supply curve remains static, what will happen in the market if there is a decrease (leftward shift) in demand? a. Price will decrease; Quantity will decrease b. Price will decrease; Quantity will increase c. Price will increase; Quantity will decrease d. Price will increase; Quantity will increase
a. Price will decrease; Quantity will decrease
Which of the following are characteristics of capitalism? a. Private ownership of resources b. Markets as resource allocation mechanisms c. Ownership of resources is public d. Substantial government control of the economy
a. Private ownership of resources, and b. Markets as resource allocation mechanisms
Assume the following: The maximum price that Joe is willing to pay for an office chair is $100 The minimum price that Frank is willing to accept for an office chair is $50 If they agree on a price of $90 to make an exchange, which is true? a. Produce surplus is $40 b. Consumer surplus is $25 c. Consumer surplus is $75 d. Total surplus is $100
a. Produce surplus is $40
Which of the following statements are accurate? a. The Consumer Welfare Standard is the current enforcement standard for anti-trust b. The Sherman Act was enacted in 1890 c. The Consumer Welfare Standard is attributed to Chief Justice Oliver Wendell Holmes d. Under the Consumer Welfare Standard mergers are rejected if the resulting firm will have more than 50% market share
a. The Consumer Welfare Standard is the current enforcement standard for anti-trust and b. The Sherman Act was enacted in 1890
Which of the following statements are accurate? a. The misery index is the summation of inflation and unemployment rates b. Inflation and Unemployment are generally positively correlated c. GDP includes intermediate goods d. Business cycles do not occur in regular intervals e. Yield Curve Inversions have predicted every recession since the Panic of 1907
a. The misery index is the summation of inflation and unemployment rates and d. Business cycles do not occur in regular intervals
Which of the following would like make the demand for a product more inelastic? a. The time to make a buying decision is compressed b. The time to make a buying decision is long c. The product is more of a want than a need d. The number of substitutes in a market is reduced
a. The time to make a buying decision is compressed and d. The number of substitutes in a market is reduced
Which of the following is likely to make a consumer demand for a product more inelastic? a. There are fewer suppliers in the market due to corporate consolidation b. The time horizon for making the decision becomes larger c. The product becomes more of a want than a need d. The time horizon for making the decision becomes smaller
a. There are fewer suppliers in the market due to corporate consolidation and d. The time horizon for making the decision becomes smaller
Based on the table below, if a price ceiling is set at $400 what is the market outcome? a. There will be a market of 120 units b. There will be a surplus of 20 units c. There will be a shortage of 20 units d. There will be a surplus of 120 units
a. There will be a market of 120 units
Which of the following statements are accurate? a. asymmetrical information can cause markets to fail. b. asymmetrical information occurs when one party has more information than another in a transaction. c. asymmetrical information is a cornerstone of neo-classical theory d. Carfax is an example of a free market solution to asymmetrical information.
a. asymmetrical information can cause markets to fail, b. asymmetrical information occurs when one party has more information than another in a transaction, and d. Carfax is an example of a free market solution to asymmetrical information.
Which of the following are neo-classical assumptions? a. people are rational b. People are irrational c. Asymmetrical information is prevalent in the market d. People are self-interested e. People have information to make decisions
a. people are rational, d. People are self-interested, and e. People have information to make decisions
Neo-classical theory assumes that economic actors are: a. self interest b. informed c. rational d. irrational
a. self interest, b. informed, and c. rational
What is the marginal utility at unit 4? a. 240 b. 40 c. 6 d. 180
b. 40
Assume the following data: Population over 16 (not institutionalized) = 500,000 Currently employed workers =300,000 Currently seeking employment in the past=100,000 What is the LFPR? a. 25% b. 80% c. 10% d. 90% e. 60%
b. 80%
Which of the following statements are accurate? a. Adam Smith was the first person to have economic thoughts b. Adam Smith wrote the Wealth of Nations c. The invisible hand is a metaphor attributed to Adam Smith d. Adam Smith was in favor of mercantilism
b. Adam Smith wrote the Wealth of Nations and c. The invisible hand is a metaphor attributed to Adam Smith
Why is it hard to apply anti-trust to "big tech" using the Consumer Welfare Standard a. Because their market share is too small b. Because prices are not increasing for the consumer c. Because the Sherman act was repealed in 1978 by Jimmy Carter d. Because the Sherman Act was repealed in 1972 by Richard Nixon
b. Because prices are not increasing for the consumer
Which of the following statement is true? a. The economic resources are land, labor, capital, and cash b. Economics is a discipline concerned with resource allocations. c. The curve on the PPF represents equal satisfaction at all points d. Opportunity cost is the next best thing forgone when making a choice
b. Economics is a discipline concerned with resource allocations and d. Opportunity cost is the next best thing forgone when making a choice
Which of the following statements are correct? a. GDP calculations have been occurring since 1865 b. GDP is calculated by the Bureau of Economic Analysis c. Real GDP is adjusted for inflation d. There is only one way to calculate GDP
b. GDP is calculated by the Bureau of Economic Analysis and c. Real GDP is adjusted for inflation
What are the components of GDP under the expenditures method a. Net Imports b. Investment c. Net Exports d. Consumption e. Government
b. Investment, c. Net Exports, d. Consumption, and e. Government
Which of the following are accurate? a. Full employment occurs when everyone wanting a job has one b. Labor force participation among women has increased since the 1970s c. Unemployment rates tend to be understated d. There are three major types of unemployment e. Labor force participation among men has increased since the 1970s
b. Labor force participation among women has increased since the 1970s, c. Unemployment rates tend to be understated, and d. There are three major types of unemployment
What are three ways to correct for a negative externality? a. Subsidize the product b. Limit Consumption of the product c. Tax the product d. Ban the product
b. Limit Consumption of the product, c. Tax the product, and d. Ban the product
"There's no such thing as a free lunch" refers to what economic concept? a. Marginalism b. Opportunity cost c. Scarcity d. Self-interest
b. Opportunity cost
What are two economic concepts that the PPF can be used to illustrate? a. Supply and Demand b. Opportunity costs and scarcity c. Price and value d. Neo-classical vs classical theory
b. Opportunity costs and scarcity
Which of the following statements are accurate? a. Markets always allocate resources in the most efficient manner b. Policymakers should tax behaviors they want to discourage c. Market externalities can lead to market failure if not adjusted for. d. Policymakers should subsidize behaviors they want to encourage
b. Policymakers should tax behaviors they want to discourage, c. Market externalities can lead to market failure if not adjusted for, and d. Policymakers should subsidize behaviors they want to encourage
What is an alternative measure to GDP that takes into additional factors like life expectancy, income inequality, access to healthcare, etc. a. The Gini Index b. The GPI c. The PPI d. The Lorenz Curve e. The LaSpayres Index
b. The GPI
Which of the following statements are accurate? a. The consumer welfare considers mergers within the framework of the resulting company size b. The current enforcement standard is the consumer welfare standard c. Enforcement of anti-trust has declined since the 1970s d. The first anti-trust law was the Sherman Act
b. The current enforcement standard is the consumer welfare standard, c. Enforcement of anti-trust has declined since the 1970s, and d. The first anti-trust law was the Sherman Act
Which of the following statements are accurate? a. The supply curve slopes down and to the right b. The law of demand states that price and quantity demand are inversely related, ceteris paribus c. At equilibrium supply and demand are equal d. The law of supply states that price and quantity supplied are directly related, ceteris paribus
b. The law of demand states that price and quantity demand are inversely related, ceteris paribus and d. The law of supply states that price and quantity supplied are directly related, ceteris paribus
If the supply remains unchanged in the market, identify which scenarios will cause the price in the market to increase a. The product is used cars and the price of new cars decreases substantially b. The product is Red Bull and the price of Monster (a substitute) increases substantially. c. The product is Red Bull and the price of Monster decreases substantially d. The product is used cars and the price of new cars increases substantially.
b. The product is Red Bull and the price of Monster (a substitute) increases substantially and d. The product is used cars and the price of new cars increases substantially.
Which of the following statements are correct? a. Unemployment will be highest at the peak of the business cycle b. There are four phases to the business cycle c. We evaluate business cycles on the basic of GDP d. The NBER determines when a recession has occurred e. Business cycles occur in regular intervals
b. There are four phases to the business cycle, c. We evaluate business cycles on the basic of GDP, and d. The NBER determines when a recession has occurred
Which of the following statements are accurate? a. The BLS is the agency responsible for identifying when a recession has occurred b. There are multiple business cycle theories c. Business Cycles have four phases d. GDP is calculated by the BEA e. Prices are usually higher when the economy is in a recession
b. There are multiple business cycle theories, c. Business Cycles have four phases, and d. GDP is calculated by the BEA
What economic cornerstones are illustrated by the PPF? a. inflation b. scarcity c. economic growth d. opportunity costs
b. scarcity, c. economic growth, and d. opportunity costs
Assume the following data: Population over 16 (not institutionalized) = 500,000 Currently employed workers =300,000 Currently seeking employment in the past=100,000 What is the unemployment rate? a. 90% b. 60% c. 25% d. 10% e. 80%
c. 25%
How many firms are in the HHI? a. 500 b. 100 c. 50 d. 10
c. 50
Which points represent productive efficiency on the PPF below? a. D b. C c. A d. B
c. A and d. B
Which of the following is likely to cause the supply curve for Starbucks to move to the left? a. People move away from the geographical location where the Starbucks is located b. Technology is introduced that increases the speed of production in a store. c. A severe frost event damages a significant portion of the coffee harvest d. Income levels increase in the area where the Starbucks is located.
c. A severe frost event damages a significant portion of the coffee harvest
Which of the following statements are accurate if the demand curve remains constant a. Equilibrium will occur where supply and demand are the same. b. A decrease in the supply curve will cause prices to decrease c. A severe shortage of coffee beans will cause the supply curve of drinks at Starbucks to move to the left. d. A decrease in the availability of new autos will cause the price to rise.
c. A severe shortage of coffee beans will cause the supply curve of drinks at Starbucks to move to the left and d. A decrease in the availability of new autos will cause the price to rise.
Which of the following statements are accurate? a. Barriers to entry allow competitive firms to earn long run economic profits b. Economic profits are larger than accounting profits c. Accounting profits do not consider opportunity cost d. Milton Freidman is associated with Shareholder Theory
c. Accounting profits do not consider opportunity cost and d. Milton Freidman is associated with Shareholder Theory
Which of the following statements are accurate? a. Adam Smith is considered a neo-classical economist b. Alfred Marshall is considered a classical economist c. Adam Smith is considered the father of economic thought d. Adam Smith is know for the "wealth of nations"
c. Adam Smith is considered the father of economic thought and d. Adam Smith is know for the "wealth of nations"
Which of the following statements is true? a. Alfred Marshall is best know for the invisible hand analogy b. The Wealth of Nations was first published in 1865 c. Adam Smith is the author of the Wealth of Nations d. David Hume was a staunch supporter of mercantilism
c. Adam Smith is the author of the Wealth of Nations
The branch of economic theory that considers the influence of psychological and sociological factors is the a. Austrian School of Economics b. Keynesian School of Economics c. Behavioral school of economics d. Neo-Classical School of Economics
c. Behavioral school of economics
Which of the following is true of price ceilings? a. They are an effective means to deal with perceived market failures long-term b. They create a perverse incentive for producers to overproduce c. If they are set below the market price then a shortage will ensue. d. if they are set below the market price then a surplus will ensue
c. If they are set below the market price then a shortage will ensue.
Which of the following are accurate? a. Underemployment helps to overstate the unemployment rate b. A lower unemployment rate is always indicative of a stronger labor market c. Labor force participation among males has been in a long term decline d. The BLS calculates unemployment rate using survey techniques e. The U3 is the unemployment rate most widely reported
c. Labor force participation among males has been in a long term decline, d. The BLS calculates unemployment rate using survey techniques, and e. The U3 is the unemployment rate most widely reported
Which of the following statements are accurate? a. Society has unlimited resources b. Society has limited wants c. The PPF is an economic model that can illustrate opportunity cost d. Economics is a social science concerned with resource allocations e. The "invisible hand" concept is credited to Adam Smith
c. The PPF is an economic model that can illustrate opportunity cost, d. Economics is a social science concerned with resource allocations, and e. The "invisible hand" concept is credited to Adam Smith
Which of the following is correct? a. The United States was completely socialist in the 1970s. b. The United States has always been a purely capital system. c. The United States is currently considered a mixed economic system. d. The United States has more government involvement in the economy during the Gilded Age than today.
c. The United States is currently considered a mixed economic system.
What is the opportunity cost of moving from point B to point A? a. 50k hats b. 25k hats c. 75 drones d. 25 drones
d. 25 drones
Referring to the price ceiling graph below, which statement is accurate? a. After the price ceiling there is a 500/mo surplus b. The price ceiling has increased the number of apartments being rented c. The price ceiling has caused quantity demanded for apartments to decrease d. After the price ceiling there is a 500/mo shortage
d. After the price ceiling there is a 500/mo shortage
Which of the following was a leading voice of Austrian economic theory? a. Alfred Marshall b. Adam Smith c. JM Keynes d. FM Hayek
d. FM Hayek
What is the impact of discouraged workers in the labor market? a. LFPR rises and the unemployment rate falls b. LFPR falls and the unemployment rate remains the same c. LFPR rises and the unemployment rate rises d. LFPR falls and the unemployment rate falls e. LFPR falls and the unemployment rate rises
d. LFPR falls and the unemployment rate falls
What city was studied in the Soda Tax video assignment? a. Chicago b. San Jose c. New York d. Philadelphia
d. Philadelphia
If he demand curve moves to the right and the supply curve remains unchanged, what will happen to price and quantity in the market? a. Price will decrease and quantity will decrease b. Price will increase and quantity will decrease c. Price and quantity will both decrease d. Price and quantity will both increase
d. Price and quantity will both increase
What is the major difference between chained and traditional CPI? a. Chained CPI doesn't include healthcare costs b. They are reported by different agencies c. Geographical locations d. Substitution effects
d. Substitution effects
The misery index is the addition of what macroeconomic statistics? a. GDP growth rate and inflation rate b. GDP growth rate and interest rate c. GDP growth and unemployment rate d. The inflation and unemployment rate
d. The inflation and unemployment rate
In simple terms, what is a yield curve inversion? a. When short term bond rates are lower than long term b. When the rate of return on bonds is higher than stock indices c. When the rate of return on stock indices is higher than bonds d. When long term bond rates are lower than short term
d. When long term bond rates are lower than short term
The idea that people will value something that they currently possess more than something they might be purchasing is the: a. anchoring effect b. perverse incentive effect c. risk aversion effect d. endowment effect
d. endowment effect
True or False: Investment is the largest share of GDP expenditures
False
Match the Business Cycle with the cause The overexpansion of railroads and subsequent downturn - The US housing bubble bursts - Knickerbocker Trust attempts to corner the copper market - The Bank War between Andrew Jackson and Nicholas Biddle - Options: The Great Recession, Panic of 1837, Panic of 1907, and Panic of 1873.
Panic of 1873 The Great Recession Panic of 1907 Panic of 1837
True or False: Inflation can be described as "too many dollars chasing too few goods"
True
True or False: Net investment is the Gross investment less the depreciation for the period
True
True or False: The Federal Reserve uses the PCE inflation measure because they consider it to be more accurate
True
What does each elasticity measure try to determine Income elasticity - Price Elasticity of Demand - Price Elasticity of Supply - Cross-Price Elasticity
- Whether goods are normal or inferior - How Qd for a good changes with Price - How Qs for a good changes with Price - Whether goods are complements or substitutes
Match the event with the time period. The neo-classical period advances - The affordable Care Act is created - Medicaid and Medicare are creates - Social Security is created - The classical period begins -
1890 - Principles of Economics is published The Great Recession era - 2008-2012 The 1960s - The Great Society The 1930s - The New Deal 1776 - The Wealth of Nations is published
Which of the following concepts are associated with the behavioral school of economics? a. The Endowment Effect b. Nudge Theory c. Anchor Prices d. Perfect Information
a. The Endowment Theory, b. Nudge Theory, and c. Anchor Prices
Assume the following: The maximum price that Joe is willing to pay for an office chair is $100 The minimum price that Frank is willing to accept for an office chair is $50 If they agree on a price of $90 to make an exchange, which is true? a. Produce surplus is $90 b. Consumer surplus is $75 c. Total surplus is $50 d. Consumer surplus is $25
c. Total surplus is $50
The curved lines below are referred to as: a. The PPF b. budget lines c. indifference curves d. Optimality curves
c. indifference curves
