Econ 110 final
consider the data above (in billions of dollars) for an economy: gross domestic product (in billions of dollars) for this economy equal
$1,200
macroeconomics, as opposed to microeconomics, includes the study of what determines the level of
employment in the economy
in the circular flow model, the value of total production for an economy __________ the value of total expenditures on final goods and services
equals
____________ occurs when economic benefits are distributed fairly
equity
in the circular flow diagram, market k represents
factor markets
Accumulating a greater number of inputs will ensure that an economy will experience economic growth.
false
consumers make all economic decisions in a mixed economy
false
countries without well-developed financial systems are able to sustain high levels of economic growth
false
eliminating frictional unemployment would be good for the economy
false
for most goods and services, the burden of a tax is on the sellers
false
if Blake can pick more cherries in one hour than Cody, then blake has a comparative advantage in cherry picking
false
if nominal GDP is less then real GDP, then the GDP deflator will be greater than 100
false
if the demand curve for a product shifts to the right and the supply curve for the product shifts to the left, equilibrium price and equilibrium quantity will both increase
false
paying efficiency wages are a way for a company to cut costs and become more efficient, and are therefore lower than market wages
false
residential investment includes spending by firms on office buildings
false
the difference between consumer surplus and producer surplus in a market is equal to the deadweight loss
false
the term "market" refers only to trading arrangements that have been approved by the government
false
when the government faces a budget deficit, which usually causes Crowding-in phenomena
false
the basic economic problem of scarcity
has always existed and will continue to exist
which of the following is not an example of a transfer payment
health insurance payments to an army private
labor productivity will increase if the ________ increases and ___________
quantity of capital per hour worked; technology improves
a good measure of the standard of living is
real GDP per capita
in a market economy, those who are willing and able to buy what is produced
receive the most of what is produced
the period between a business cycle peak and a business cycle trough is called
recession
India's rapid growth can be explained by
reduced regulations and market-based reforms
the supply curve for umbrellas
shows the relationship between the price of umbrellas and the quantity of umbrellas supplied
which of the following is a result of government price controls
some people win and some people lose
people who lost their jobs as hand-drawn animators because of the popularity of computer-generated 3D animation are examples of persons who are suffering
structural unemployment
the processes used to produce goods and services describes
technology
comparative advantage means
the ability to produce a good or service at a lower opportunity cost than any other producer
what does the PPI measure
the average of the prices received by producers of goods and services at all stages of the production process
if the price of gasoline increases, what will be the impact in the market for public transportation
the demand curve for public transportation shifts to the right
Liquidity refers to
the ease with which a financial security can be traded for cash.
the graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D1 and S1 (point A). if the price of motorcycle engines increases, the wages of motorcycle workers increase, how will the equilibrium point change?
the equilibrium point will move from A to B
opportunity cost is defined as:
the highest valued alternative that must be given up to engage in an activity
a consumer is willing to purchase a produce up to the point where
the marginal benefit is equal to the price of the product
the production possibilities frontier shows
the maximum attainable combinations of two products that may be produced in a particular time period with available resources
which of the following is a normative economic statement
the price of milk is too high
one would speak of a movement along a supply curve for a good, rather than a change in supply, if
the price of the good changes
the circular flow model demonstrates
the roles played by households and firms in the market system
to calculate GDP using the value-added method, one would add up
the value added by each firm involved in the production of final goods and services
suppose in 2018, you purchase a house built in 2003. which of the following would be included in the gross domestic product of 2018?
the value of the services of the real estate agent
when the labor market is at full unemployment
there is no cyclical unemployment in the economy
if the price is $25
there is surplus of 300 units
without technological advancement, how can a nation achieve economic growth?
through an increase in supplies of factors of production
an increase in the unemployment rate may be represented as a movement from a point on the production possibilities frontier to a point inside the frontier
true
housing is the largest component of the U.S. CPI market basket
true
if consumers believe the price of hybrid vehicles will decrease in the future, this will cause the demand for hybrid vehicles to decrease now
true
if inflation is higher than expected, this helps borrows (by reducing the real interest rate they pay) and hurts lenders (by reducing the real interest rate they receive)
true
if the population increases and input prices increase, the equilibrium price if a product will definitely increase
true
the division of the burden of a tax between buyers and sellers in a market is called tax incidence
true
the household survey asks adults about their employment status and is used to compile the monthly unemployment rate
true
to reduce the bias in the consumer price index, the Bureau of Labor Statistics
updates the market basket every two years, rather than every 10 years
the consumer price index implicitly assumes that the demand curve for each good and service in the representative market basket
vertical
which of the following is a macroeconomic question
what determines the unemployment rate?
brett buys a new cell phone for $100. he receives consumer surplus of $80 from the purchase. how much does Brett value his cell phone?
$180
how much of the tax is paid by buyers
$3
what is the value of the deadweight loss after the imposition of the price floor
$600
suppose your grandfather earned a salary of $12,000 in 1964. if the CPI is 31 in 1964 and 219 in 2018, then the value of your grandfathers salary in 2018 dollars is approximately
$84,775
if the economy is currently producing at point E, what is the opportunity cost of moving to point B?
0 spoons
if Vidalia chooses to produce 40 dozen orchids, how many roses can it produce to maximize production
100 dozen roses
assume the market basket of the consumer price index has two products -meat and potatoes- with the following values in 2013 and 2018 for price and quantity: the consumer price index for 2018 equals
141
consider the following values of the consumer price index for 1996, 1997, and 1998: the inflation rate for 1997 was equal to
2.5 percent
imagine that you borrow $1,000 for one year and at the end of the year you repay the $1,000 plus $100 of interest. if the inflation rate was 7%, what was the real interest rate you paid?
3 percent
using the table above, what is the approximate growth rate of real GDP form 2017 to 2018
3 percent
using marginal analysis, how many hours should Julius extend his shop's hours of operation
4 hours
If real GDP per capita doubles between 2005 and 2020, what is the average annual growth rate of real GDP per capita?
4.7%
if the number of unemployed workers is 19 million, the number in the working-age population is 500 millions, and the unemployment rate is 4%, how many workers are in the labor force?
475 million
at a price of $25, how many units will be sold?
500
given the information above, calculate the rate of increase in the price level from 2017-2018
8.6%
what are represents producer surplus at P2
B+D
which of the following statements is true? Wilma Betty statues 12 14 benches 4 7
Betty has a comparative advantage in making benches and Wilma is making statues
a technological advancement would be represented by a movement from
S1 to S2
if society decides it wants more of one good and __________, then it has to give up some of another good and incur some opportunity costs
all resources are fully utilized
if a decrease in income leads to an increase in the demand for macaroni, than macaroni is
an inferior good
the Bureau of Labor Statistics would categorize a person as ________ if they were temporarily away from their job because they were ill
employed
voluntary exchange increases economic efficiency
because neither the buyer nor the seller would agree to a trade unless they both benefit
in Venezuela, the government attempted to control rising food prices by implementing price ceilings in the market. these price ceilings were set __________ the market price, which resulted in __________ of food
below; shortages
which of the following describes the accuracy of the Consumer Price Index
changes in the CPI overstate the true rate of inflation
which of the following prices indices comes closest to measuring the cost of living of the typical household
consumer price index
the largest component of spending in GDP is...
consumption spending
economics promotes which of the following as the way to make the best decision?
continue an enjoyable activity up to the point where its marginal benefit equals its marginal cost
if the price level rose in three consecutive years form 100 to 120 to 140, then the annual inflation rate over those years would
decrease
consider the following data for a closed economy: Y=$12 trillion, C=$8 trillion, I=$2 trillion, TR=$2 trillion, T=3 trillion. based on the information above, what is the level of public saving
deficit of $1 trillion
which of the following causes the unemployment rate to understate the true extent fo joblessness
discouraged workers are not counted as unemployed
gross domestic product in the economy is measured by the...
dollar value of all final goods and services produced in the economy
a(n) _________ is represented by a rightward shift of the demand curve while a(n) ____________ is represented by a movement along a given demand curve
increase in demand; increase in quantity demanded
the U.S. unemployment insurance program
increases the amount of time the unemployed spend searching for a job
the law of demand implies, holding everything else constant, that as the price of the yogurt
increases, the quantity of yogurt demanded will decrease
gross domestic product understates the total production of final goods and services because of the omission of
intermediate goods
an advantage of the establishment survey over the household survey of the labor market is that the establishment survey
is based on actual payrolls, rather than on unverified answers
because minimum wage is a price floor
it will create a deadweight loss
the quantity of goods and services that can be produced by one worker or by one hour of work is referred to as
labor productivity
which of the following labor market statistics best indicates the amount of labor that is available to the economy from a given working-age population
labour force participation ratio
economic surplus is maximized in a competitive market when
marginal benefit equals marginal cost
the income effect of a price change results in a
movement along the demand curve due to a change in purchasing power brought about by the price change
which of the following is consist with the graph depicted
new government regulations decrease the profitability of new investment
based on the graph of the labor market above, if a minimum wage is set at $5 per hour, which of the following will occur
none of the above will occur (a. the unemployment rate will rise b. the unemployment rate will fall c. the level of unemployment will rise, but the percentage of the labor force unemployed will not change)
real GDP will increase
only if the quantity of final foods and services produced rises
If the production possibilities frontier is linear, then
opportunity costs are constant as most of one good is produced