ECON 1202 Midterm

Every society faces​ trade-offs because we live in a world of scarcity. Suppose a​ student-athlete has the opportunity to earn ​$600,000 next year playing for a minor league baseball​ team, ​$700,000 next year playing for a European professional football​ team, or​ $0 returning to college for another year. The opportunity cost of the​ student-athlete returning to college next year is ​​(Enter your response as an​ integer.)

$700,000

Limited liability becomes more important for firms trying to raise funds from a large number of​ investors, rather than from a small number of​ investors, because A. investors that have a large investment and who can exercise control in the​ firm, do not want to be responsible for the​ firm's debts. B. the shareholders are usually very confident that the firm they have invested in is not at risk to fail. C. investors that make a small investment in a firm may be unwilling to risk all their personal assets if the firm fails. D. investors that make a small investment in a firm are willing to risk all their personal assets if the firm fails.

C. investors that make a small investment in a firm may be unwilling to risk all their personal assets if the firm fails.

Limited liability means that A. corporations have only limited responsibility for their actions. B. corporations have limited accountability for their debts and obligations. C. shareholders in a corporation cannot lose more than their investment in the firm. D. shareholders in a corporation must pay some but not all of the liabilities of the firm.

C. shareholders in a corporation cannot lose more than their investment in the firm.

____ is unemployment caused by a recession.

Cyclical unemployment

In February 2018​, the nominal interest rate on the​ one-year Treasury bill was 1.90 percent. From February 2018 to February 2019​, the consumer price index rose from 249.4 to 253.1. If you bought the​ one-year Treasury bill in February 2018​, the interest rate you earned over the following​ 12-month period was ___​%. ​(Enter your answer rounded to two decimal places and include a minus sign if​ necessary.)

(final consumer price index - initial consumer price index)/(initial price index) = inflation rate x 100 = inflation percent (253.1-249.4)/249.4 = 0.0148 x 100 = 1.48 nominal interest rate - inflation rate = real interest rate 1.90 - 1.48 = 0.42% Final answer: 0.42%

All of the following are problems in measuring the unemployment rate except that A. people on active military service are included as unemployed. B. lack of verification of​ people's responses in the household survey. C. ​part-time workers are included as employed. D. discouraged workers are not included in the labor force. When there are part minus time workers, the official BLS measure of the unemployment rate ___ the true degree of unemployment.

A. people on active military service are included as unemployed. understates

The equilibrium price and quantity of a product was​ $100 and​ 1,000 units per month in 2017 and is​ $150 and 800 units per month in 2018. ​1.) Use the line drawing tool to draw new demand and supply curves illustrating the changes described above. Properly label the lines. ​2.) Use the point drawing tool to plot the 2018 equilibrium. Properly label the point. From 2017 to​ 2018, A. supply increased more than demand decreased. B. supply increased more than demand increased. C. supply decreased more than demand increased. D. supply decreased more than demand decreased.

C:\Users\kitty\OneDrive\Documents\UConn\Spring 2019\ECON 1202\ch 5 Q1 graph.png C. supply decreased more than demand increased.

In the diagram to the​ right, illustrating a​ per-unit tax equal to P2 minus P3​, tax revenue is represented by the areas ___ and the excess burden of the tax is represented by areas ___ C:\Users\kitty\OneDrive\Documents\UConn\Spring 2019\ECON 1202\ch 5 Q2 graph.png

D and F E and G

The true cost of borrowing and lending is best measured by A. the inflation rate. B. the​ three-month U.S. Treasury bill rate. C. the nominal interest rate. D. the real interest rate.

D. the real interest rate.

Suppose a bond makes ​$60 coupon payments at the end of the next two​ years, at which time the face value of ​$1,000 is repaid. If the interest rate is 5 ​percent, then what is the present value of the​ bond? The present value​ (PV) of the bond is ​____

(coupon payment/(1+i)) + (coupon payment/(1+i)^t) + (face value/(1+i)^t) = present value ($60/1.05) + (60/1.05^2) + (1,000/1.05^2) = $1,018.59

The government grants limited liability to the owners of corporations A. to limit shareholder risk and thus encourage investment in corporations. B. to make market economies more equitable and efficient. C. to allow the corporation to borrow money in the form of bonds. D. because the owners do not run the corporation and thus should not be responsible for its debts.

A. to limit shareholder risk and thus encourage investment in corporations.

Which of the following is an example of structural​ unemployment? A. Upper A worker moves to California and searches for a new job. B. Due to technological change comma typewriter workers lose jobs and must retrain to find jobs in other industries. C. Workers in the tourism industry in Maine are laid off during the winter. D. In an economic downturn comma a manufacturing plant reduces production and temporarily lays off workers.

B. Due to technological change comma typewriter workers lose jobs and must retrain to find jobs in other industries.

The​ employment-population ratio measures the A. percentage of the working age population that is in the labor force. B. percentage of the working age population that is employed. C. portion of the total population that is employed. D. percentage of the working age population that is not employed.

B. percentage of the working age population that is employed.

The unemployment rate is calculated as​ follows: A. Unemployment Rate = (Number of Unemployed)/(Number of Employed + Labor Force) B. Unemployment Rate = Number of Unemployed/Populationx100 C. Unemployment Rate = Number of Unemployed/Labor Forcex100 D. Unemployment Rate = Number of Unemployed/Number of Employed x 100

C. Unemployment Rate = Number of Unemployed/Labor Forcex100

Which of the following statements about positive analysis is​ correct? A. Positive analysis involves value judgments. B. Positive analysis is concerned with what ought to be. C. Positive analysis can be used to determine whether policies are good or bad. D. Positive analysis is concerned with what is.

D. Positive analysis is concerned with what is.

The natural rate of unemployment tends to be lower when A. firms pay efficiency wages. B. a greater percentage of the work force is unionized. C. unemployment insurance benefits are paid for fewer weeks. D. the minimum wage is higher than the market wage.

C. unemployment insurance benefits are paid for fewer weeks.

College football​ attendance, especially student​ attendance, has been on the decline. In​ 2016, home attendance at major college football games declined for the sixth consecutive year and was the lowest since 2000. The opportunity cost of engaging in an activity is the value of the best alternative that must be given up to engage in that activity. ​Source: Jon​ Solomon, "College Football Attendance in​ 2016: Crowds Decline for Sixth Straight​ Year," cbssports.com, December​ 16, 2016. Your opportunity cost of attending a game compared with the opportunity cost facing a college student 10 years ago is A. ​lower, because games are usually viewed on​ high-definition television today. B. ​lower, because of social media. C. ​higher, because more games are televised today. D. ​higher, because the cost of cable TV is higher today. Can this change in opportunity cost account for the decline in college football​ attendance? Briefly explain. A. ​No, because opportunity costs do not involve an actual payment of money. B. ​No, because the price of the game ticket is the only thing that matters. C. ​Yes, because sports fans are rarely rational. D. ​Yes, because these changes increase the opportunity cost of watching football games in person.

C. ​higher, because more games are televised today. D. ​Yes, because these changes increase the opportunity cost of watching football games in person.

The labor force participation rate is calculated by A. the percentage of the retired population that is in the labor force or Retired people/Labor force x 100 B. the percentage of the labor force that is in the​ working-age population or (Working - age population) / Labor force x 100 C. the percentage of the employed workers that is in the labor force or Employed / Labor force x 100 D. the percentage of the​ working-age population that is in the labor force or Labor force / (Working - age population) x 100

D. the percentage of the​ working-age population that is in the labor force or Labor force / (Working - age population) x 100

Which of the following statements about the idea that people are rational is​ correct? A. The idea assumes that consumers and firms use all available information as they act to achieve their goals. B. The idea assumes that consumers and firms take into account the costs of their actions but ignore the benefits. C. The idea assumes that consumers and firms always make correct decisions. D. The idea assumes that consumers and firms take into account the benefits of their actions but ignore the costs.

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

Refer to the graph to the right. Which of the following represents the deadweight loss when the price of tea is​ $2.20 per​ cup? C:\Users\kitty\OneDrive\Documents\UConn\Spring 2019\ECON 1202\ch 3 Q5 graph.png A. Area C​ + E B. Area B​ + D C. Area A D. Area A​ + B​ + D

A. Area C​ + E

Which equation represents the relationship between GDP and the four major expenditure​ components? A. Y = C + I + G + NX B. Y = C(I +G +NX) C. Y = (C + I) - (G + NX) D. Y = (C + I)/(G + NX)

A. Y = C + I + G + NX

A production possibilities​ frontier: A. shows the maximum attainable combinations of two goods that may be produced with available resources. B. shows how unlimited wants exceed the limited resources available to fulfill those wants. C. shows how participants in the market are linked. D. shows the market for a good or service. E. shows the act of buying and selling.

A. shows the maximum attainable combinations of two goods that may be produced with available resources.

Which of the following statements about normative analysis is​ correct? A. Normative analysis measures the costs and benefits of different courses of action. B. Normative analysis is concerned with what ought to be. C. Normative analysis should not involve value judgments. D. Normative analysis is concerned with what is

B. Normative analysis is concerned with what ought to be.

Why are models based on​ assumptions? A. Because models are only concerned about questions of​ equity, not question of efficiency. B. Because models have to be simplified to be useful. C. Because models are not intended to analyze​ real-world events. D. Because models are very different from theories.

C. Because models are not intended to analyze​ real-world events.

What do we mean by the separation of ownership from control in large​ corporations? A. Shareholders own the​ corporation, but it is controlled by the government. B. Shareholders control the​ corporation, but it is owned by the government and by taxpayers. C. Shareholders own the​ corporation, but it is controlled by managers. D. Shareholders control the​ corporation, but it is owned by managers.

C. Shareholders own the​ corporation, but it is controlled by managers.

The production possibilities frontier will shift outward A. if resources are not used in production. B. if production occurs outside the production possibilities frontier. C. if technological advances occur. D. if resources are used to produce consumption goods. E. if resources are not used to produce capital goods.

C. if technological advances occur.

In the diagram to the​ right, point Upper F indicates an C:\Users\kitty\OneDrive\Documents\UConn\Spring 2019\ECON 1202\ppf quiz 2 graph.png A. unattainable result. B. efficient result. C. inefficient result.

C. inefficient result.

When the federal government crafts environmental policies that make it less expensive for firms to follow green​ initiatives, A. the policies are likely to be more successful than policies that cost firms​ more, but they do not recognize economic incentives. B. pollution is likely to increase. C. the policies are consistent with economic incentives. D. the policies are futile because where the environment is​ concerned, it has been repeatedly shown that firms do not respond to economic incentives.

C. the policies are consistent with economic incentives.

Refer to the graph to the right. When​ 15,000 cups of tea are produced and consumed per​ month, which of the following is​ true? C:\Users\kitty\OneDrive\Documents\UConn\Spring 2019\ECON 1202\ch 3 Q3 graph.png A. The level of output is economically efficient. B. The sum of consumer and producer surplus is maximized. C. The marginal benefit to buyers of the last cup of tea is equal to the marginal cost of producing the last cup of tea. D. All of the above are true.

D. All of the above are true.

Which of the following is not one of the conditions someone needs to meet to be counted as​ unemployed? A. They must not have worked in the week previous to the survey week. B. They were available for work in the week previous to the survey week. C. They had actively looked for work at some time during the previous four weeks. D. They had worked only one hour per week during the previous four weeks.

D. They had worked only one hour per week during the previous four weeks.

Consider an organization that exists to help the poor. The members of the organization are discussing alternative methods of aiding the​ poor, when a proponent of one particular method asserts​ that: ​"If only one poor person is helped with this​ method, then all our time and money would have been worth​ it." If you were a member of the​ organization, what reply best represents clear economic​ thinking? This attitude A. acknowledges the importance of considering all the alternatives. B. is the most logical because it is focused on helping even one person. C. recognizes the fact that since the organization is a​ charity, there is an opportunity cost based on the square root of other​ peoples' needs. D. ignores the fact that the cost of helping that one person has an opportunity cost of what those funds could have been used for to help other people

D. ignores the fact that the cost of helping that one person has an opportunity cost of what those funds could have been used for to help other people

Consider the demand for condominiums illustrated in the figure to the right. What demographic change would likely result in the demand curve for condominiums shifting to the left​? C:\Users\kitty\OneDrive\Documents\UConn\Spring 2019\ECON 1202\ch 3 Q1 graph.png The demand curve for condominiums would likely shift to the left if the A. number of senior citizens increases. B. ethnic characteristics of homeowners become more heterogeneous. C. ratio of males to females becomes more balanced. D. portion of the population that is elderly decreases. E. size of the population increases.

D. portion of the population that is elderly decreases.

Suppose the United States and Mexico both produce hamburgers and tacos. The combinations of the two goods that each country can produce in one day are presented in the table below. C:\Users\kitty\OneDrive\Documents\UConn\Spring 2019\ECON 1202\ch 2 table Q5.png Which country has an absolute advantage in producing​ tacos? Which country has a comparative advantage in producing​ tacos? Suppose the United States is currently producing 200 tons of hamburgers and 60 tons of tacos and Mexico is currently producing 40 tons of hamburgers and 50 tons of tacos. If the United States and Mexico each specialize in producing only one good​ (the good for which each has a comparative​ advantage), then a total of __ additional​ ton(s) of hamburgers can be produced for the two countries combined and a total of __ additional​ ton(s) of tacos can be produced.

The United States Mexico 60 40

As output​ (GDP) is​ increasing, the amount of cyclical unemployment would ____

decrease

A flow of funds from savers to borrowers through financial intermediaries such as banks is ___ ​finance, while a flow of funds from savers to firms through financial​ markets, such as the New York Stock Exchange is ___ finance.

indirect; direct

A simple economy produces two​ goods, Corn Bread and Technical Manuals. Price and quantity data are as​ follows: C:\Users\kitty\OneDrive\Documents\UConn\Spring 2019\ECON 1202\ch 8 Q6 table.png In Year​ 2, nominal GDP is equal​ to: ​$___, and real GDP is ​$___

nominal GDP = Q x P (131.25x4.50) + (900x60) = $54590.63 real GDP = Q(current year) x P(base year) (131.25x3) + (900x30) = $27393.75

Which of the following is not a cost created by high​ inflation? A. Inflation causes the real wage to fall which means that firms have to pay more for workers. B. Inflation causes the real interest rate to change which can make it more difficult to borrow and lend money. C. Inflation changes​ firms' prices which causes firms to have to use resources to physically change the marked​ prices, often referred to as menu costs. D. Inflationary impacts are not distributed evenly across the​ population, therefore, inflation causes the economy to redistribute income across households.

A. Inflation causes the real wage to fall which means that firms have to pay more for workers.

Use the graph to the right to help determine which of the following statements regarding the labor force participation rates of adult men and women since 1950 is false. C:\Users\kitty\OneDrive\Documents\UConn\Spring 2019\ECON 1202\ch 9 Q11 graph.png A. The labor force participation rates of adult men and adult women were equal in 1990. B. The labor force participation rate of adult women has increased significantly since 1950. C. The overall labor force participation rate is higher today than it was in 1950. D. The labor force participation rate of adult men has declined gradually since 1950.

A. The labor force participation rates of adult men and adult women were equal in 1990.

State whether each of the following events will result in a movement along the demand curve for​ McDonald's Big Mac hamburgers or whether it will cause the curve to shift. The price of Burger​ King's Whopper hamburger increases. This will cause A. demand for​ McDonald's Big Mac hamburgers to increase. B. demand for​ McDonald's Big Mac hamburgers to decrease. C. a movement along the demand curve for​ McDonald's Big Mac hamburgers. ​McDonald's eliminates ​$1.00 off coupons. This will cause A. demand for​ McDonald's Big Mac hamburgers to shift to the left. B. demand for​ McDonald's Big Mac hamburgers to shift to the right. C. a movement along the demand curve for​ McDonald's Big Mac hamburgers. The price of fries increases due to a potato shortage. This will A. decrease the demand for McDonald's Big Mac hamburgers. B. increase the demand for McDonald's Big Mac hamburgers. C. cause a movement along the demand curve for​ McDonald's Big Mac hamburgers. The U.S. economy enters a period of decline in incomes. This will cause A. demand for​ McDonald's Big Mac hamburgers to shift to the left if they are inferior goods. B. demand for​ McDonald's Big Mac hamburgers to shift to the right if they are inferior goods. C. a movement along the demand curve for​ McDonald's Big Mac hamburgers if they are normal goods.

A. demand for​ McDonald's Big Mac hamburgers to increase. C. a movement along the demand curve for​ McDonald's Big Mac hamburgers. A. decrease the demand for McDonald's Big Mac hamburgers. B. demand for​ McDonald's Big Mac hamburgers to shift to the right if they are inferior goods.

Which of the following terms refers to what occurs when a person gets a vaccination against a disease and that action reduces the chances that other people will contract that​ disease? A. positive externality B. moral hazard C. adverse selection D. negative externality The marginal social benefit from vaccinations is greater than the marginal private benefit to people being vaccinated. A. True B. False

A. positive externality A. True

A column in the Wall Street Journal titled​ "Three Mistakes Investors Keep Making Again and​ Again" listed​ "trying to forecast what stocks will do​ next" as one of the three mistakes. ​Source: Morgan​ Housel, "Three Mistakes Investors Keep Making Again and​ Again," Wall Street Journal​, September​ 12, 2014. Trying to forecast stock prices would be a mistake for the average investor because A. stock prices are based on expected future profitability which is very unpredictable. B. the average investor is not very intelligent. C. the average investor will typically underestimate their willingness to take risk. D. the average investor has no access to information about the stock.

A. stock prices are based on expected future profitability which is very unpredictable.

If you deposit​ $20,000 in a savings account at a bank, you might earn 3 percent interest per year. Someone who borrows​ $20,000 from a bank to buy a new car might have to pay an interest rate of 8 percent per year on the loan. Knowing​ this, why​ don't you just lend your money directly to the car​ buyer, cutting out the​ bank? A car buyer would not be willing to borrow​ $20,000 from you. B. Since you would be loaning all of your savings to one​ borrower, it would be extremely risky. C. It is not legal to make individual loans to​ borrowers; these loans must be made through banks. D. You would find it difficult to find someone who wished to borrow money from you.

B. Since you would be loaning all of your savings to one​ borrower, it would be extremely risky.

What is the difference between the value of a​ firm's final product and the value added by the firm to the final​ product? A. The value of a​ firm's final product is the difference between the sale price and the price of intermediate​ goods; value added is the sale price. B. The value of a​ firm's final product is the sale​ price; value added is the difference between the sale price and the price of intermediate goods. C. There is no difference between the value of a​ firm's final product and the value added by the firm to the final product. D. The value of a​ firm's final product is​ profit; the value added is the total cost of production.

B. The value of a​ firm's final product is the sale​ price; value added is the difference between the sale price and the price of intermediate goods.

Tax incidence indicates A. who is not legally required to send a tax payment to the government. B. the actual division of the burden of a tax. C. who is legally required to send a tax payment to the government. D. the burden of a tax on producers. E. the burden of a tax on consumers.

B. the actual division of the burden of a tax.

Equity is A. an exactly equal distribution of income. B. the fair distribution of economic benefits. C. when poorer​ people's income is growing more rapidly than more wealthy​ people's income. D. always achieved by the market

B. the fair distribution of economic benefits.

We can show economic​ inefficiency: A. with points on the production possibilities frontier. B. with points inside the production possibilities frontier. C. with points inside and on the production possibilities frontier. D. with points outside the production possibilities frontier. E. with points on and outside the production possibilities frontier.

B. with points inside the production possibilities frontier.

​Trade-offs force society to make​ choices, particularly when answering the following three fundamental​ questions: A. ​One, what goods and services will be​ produced? Two, how will the goods and services be​ produced? Three, is the distribution of goods and services​ fair? B. ​One, what goods and services will be​ produced? Two, how will the goods and services be​ produced? Three, who will receive the goods and services​ produced? C. ​One, what goods and services will be produced​ domestically? Two, how will the goods and services be​ produced? Three, is the distribution of goods and services​ fair? D. ​One, what goods and services will be produced in foreign​ countries? Two, who will produce the goods and​ services? Three, who will receive the goods and services​ produced?

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

In 1975​, the price of a Big Mac was​ $0.50. Use the information in the table below to find the price of a Big Mac in 2006 dollars. C:\Users\kitty\OneDrive\Documents\UConn\Spring 2019\ECON 1202\ch 9 Q6 table.png The value of a 1975 Big Mac in 2006 dollars is ___ ​(Round your answer to two decimal​ places.) The actual price of a Big Mac in 2006 was approximately​ $2.99. Thus the price of Big Macs has risen ___ the cost of living.

Base Price x CPI(current year) / CPI(base year) = value during current year $0.50 x 201.6 / 53.8 = $1.87 faster than

What does increasing marginal opportunity costs​ mean? A. Increasing the production of a good requires decreases in the production of another good. B. Production is not occurring on the production possibilities frontier. C. Increasing the production of a good requires larger and larger decreases in the production of another good. D. The economy is unable to produce increasing quantities of goods and services. E. Increasing the production of a good requires smaller and smaller decreases in the production of another good. What are the implications of this idea for the shape of the production possibilities​ frontier? A. The production possibilities frontier will have a positive slope. B. The production possibilities frontier will be bowed outward. C. The production possibilities frontier will have a negative slope. D. The production possibilities frontier will be bowed inward. E. The production possibilities frontier will be a straight line.

C. Increasing the production of a good requires larger and larger decreases in the production of another good. B. The production possibilities frontier will be bowed outward.

Is the value of intermediate goods and services produced during the year included in Gross Domestic Product (GDP)? For​ example, is a computer chip used to produce a new PC included in​ GDP? ​(Note that this question does not ask whether a computer chip is directly counted in GDP but rather whether the production is included in GDP.​) A. No. If we include intermediate goods in​ GDP, we would be counting the value of the good three​ times: once when the computer chip is​ produced, once when it is sold to the​ manufacturer, and again when the PC is sold to the consumer. B. No. There is no value added in the production of a computer chip. ​Therefore, production is not included in the​ value-added method of measuring GDP. C. Yes. The value of the computer chip is not directly counted in​ GDP, but the production of a computer chip is included in the​ value-added method of measuring GDP. D. Yes. The value of both final goods and intermediate goods is included in the calculation of GDP.

C. Yes. The value of the computer chip is not directly counted in​ GDP, but the production of a computer chip is included in the​ value-added method of measuring GDP.

During the spring of​ 2015, the United Kingdom experienced a brief period of deflation. According to an article in the Wall Street Journal​, ​"The U.K.'s history of sticky and​ hard-to-control inflation suggests that a short period of falling prices will be taken as a reprieve for​ consumers, not as a signal to defer​ purchases." ​Source: Richard​ Barley, "U.K. Deflation More Curiosity Than​ Concern," Wall Street Journal​, May​ 19, 2015. Consumers could see deflation as a​ "signal to defer​ purchases" because if deflation is expected to​ continue, A. producers may increase product quality in the future. B. producers may offer more to choose from in the future. C. prices would be lower in the future. D. prices would be higher in the future. Lower prices usually cause consumers to buy​ more, not less.​ However, in this​ case, consumers may A. expect prices to rise sooner rather than later. B. purchase so much​ now, there would be less available in the future. C. delay buying until prices fall​ further, so current lower prices would not have the usual effect. D. want to wait and see if there are any quality changes.

C. prices would be lower in the future. C. delay buying until prices fall​ further, so current lower prices would not have the usual effect.

What are the four major components of expenditures in​ GDP? A. ​Consumption, Intermediate​ Goods, Goods and​ Services, and Net Exports B. ​Consumption, Investment, Government​ Purchases, and​ Non-Durable Expenditures C. ​Consumption, Investment, Government​ Purchases, and Net Exports D. ​Consumption, Intermediate​ Goods, Government​ Purchases, and New Expenditures

C. ​Consumption, Investment, Government​ Purchases, and Net Exports

Proposals have been made to increase government regulation of childcare businesses​ by, for​ instance, setting education requirements for childcare workers. Suppose that these regulations increase the quality of childcare and cause the demand for childcare services to increase. At the same​ time, assume that complying with the new government regulations increases the costs of childcare businesses. Given the above​ developments: ​1.) Use the line drawing tool to draw a new demand curve. Label this line ​'D2​'. ​2.) Use the line drawing tool to draw a new supply curve. Label this line ​'S2​'. Carefully follow the instructions​ above, and only draw the required objects. Given these​ changes, the net effect on equilibrium price is ___, and the effect on equilibrium quantity is ___

C:\Users\kitty\OneDrive\Documents\UConn\Spring 2019\ECON 1202\ch 5 Q7 graph.png an increase; uncertain

How is the separation of ownership from control related to the​ principal-agent problem? A. The agents​ (firms) may pursue their own interests rather than the interests of the principals​ (consumers). B. The agents​ (shareholders) may pursue their own interests rather than the interests of the principals​ (managers). C. The agents​ (consumers) may pursue their own interests rather than the interests of the principals​ (firms). D. The agents​ (managers) may pursue their own interests rather than the interests of the principals​ (shareholders).

D. The agents​ (managers) may pursue their own interests rather than the interests of the principals​ (shareholders).

When an unemployed person drops out of the labor​ force, it A. affects the​ employment-population ratio. B. does not affect the labor force participation rate. C. does not affect the unemployment rate. D. does not affect the​ employment-population ratio.

D. does not affect the​ employment-population ratio.

When an unemployed person drops out of the labor​ force, the unemployment rate A. is not affected by the existence of such workers. B. becomes more reliable as all the potential erroneous data are removed. C. overstates the true degree of joblessness in the economy. D. understates the true degree of joblessness in the economy.

D. understates the true degree of joblessness in the economy.

We can show economic​ efficiency: A. with points inside the production possibilities frontier. B. with points inside and on the production possibilities frontier. C. with points outside the production possibilities frontier. D. with points on the production possibilities frontier. E. with points on and outside the production possibilities frontier.

D. with points on the production possibilities frontier.

The following data for 2015 are from the Organization for Economic​ Co-operation and Development​ (OECD). C:\Users\kitty\OneDrive\Documents\UConn\Spring 2019\ECON 1202\ch 8 Q1 table.png The average German worker worked about 400 fewer hours per year and earned nearly​ $14,000 less than did the average worker in the United States. Can we conclude anything about the​ well-being of the average German worker versus the​ well-being of the average worker in the United States from these​ data? What other measures would you like to see in evaluating the​ well-being of workers in these two​ countries? ​Source: stat.oecd.org. Can we conclude anything about the​ well-being of the average German worker versus the​ well-being of the average worker in the United States from these​ data? A. ​Yes, the German worker is worse off because they earned less per year. B. ​Yes, the German worker is better off because they worked less per year. C. ​No, because we do not have information about the relative value of the currencies. D. ​No, because although the German worker earned less per​ year, they also worked less per year. What measures besides average number of hours worked and real per capita GDP would you like to have to evaluate the​ well-being of workers in OECD​ countries? A. Indicators of​ pollution, crime and other social​ problems, and the distribution of income. B. Indicators of population​ density, the distribution of​ income, and average energy use. C. Indicators of social​ programs, transportation, and crime. D. Indicators of population​ density, transportation, and average energy use.

D. ​No, because although the German worker earned less per​ year, they also worked less per year. A. Indicators of​ pollution, crime and other social​ problems, and the distribution of income.

Do the people who are legally required to pay a tax always bear the burden of the​ tax? Briefly explain. A. No. Producers always bear the burden of the tax. B. No. Those who are legally required to send a tax payment to the government never bear the burden of the tax. C. Yes. Those who are legally required to send a tax payment to the government bear the burden of the tax. D. No. Consumers always bear the burden of the tax. E. No. Whoever bears the burden of the tax is not affected by who legally is required to pay the tax to the government.

E. No. Whoever bears the burden of the tax is not affected by who legally is required to pay the tax to the government.

What goods and services will be​ produced, how the goods and services will be​ produced, and who will receive the goods and services are​ determined: A. in centrally planned economies by the government. B. in market economies by the decisions of households and firms interacting in markets. C. in market economies partly by the decisions of buyers and sellers interacting in markets and partly by the government. D. in mixed economies by the decisions of buyers and sellers interacting in markets. E. both a and b are true.

E. both a and b are true.

C:\Users\kitty\OneDrive\Documents\UConn\Spring 2019\ECON 1202\ch 8 Q4 table.png In​ 2011, the value of the GDP deflator is ____ In​ 2012, the value of the GDP deflator is ____

GDP deflator = (nominal GDP/real GDP) x 100 13495 / 11919 x 100 = 113 14241 / 12007 x 100 = 119

Below are four supply curve​ diagrams, each of which represents a change in supply or a change in quantity supplied C:\Users\kitty\OneDrive\Pictures\ch 3 Q4 graphs.png Match each scenario with the appropriate diagram. a. To take advantage of high prices for snow shovels during a snowy​ winter, Alexander​ Shovels, Inc., decides to increase output. b. The success of​ Pepsi's LIFEWTR and​ Coke's smartwater leads more firms to begin producing premium bottled water. c. In the six months following the Japanese earthquake and tsunami in​ 2011, production of automobiles in Japan declined by 20 percent.

a. 4 b. 3 c. 1

Imagine that the next time the New England Patriots play the Miami Dolphins at Gillette Stadium in​ Foxborough, Massachusetts, Patriots star quarterback Tom Brady has a temporary lack of judgment and plans to sell Patriots memorabilia during the game because he realizes that he can sell five times more Patriots products than anyone in the stadium sports gear store.​ Likewise, imagine that you are a creative and effective manager at work and that you tell your employees that during the next six​ months, you plan to clean the offices because you can clean five times better than the cleaning staff. Both you and Tom are making an error in judgment by assuming that specialization should be based upon ____? You​ shouldn't necessarily do what you are better than anyone else at doing A. unless your advantage in that activity is greater than advantages you possess in other activities. B. because others may come to resent your superiority. C. because it detracts from your ability to become​ self-sufficient. D. because it may not be your favorite activity.

absolute advantage A. unless your advantage in that activity is greater than advantages you possess in other activities.

Price indexes can be used to compare prices across different periods. Suppose that a year of tuition for college at public institutions averaged a cost of ​$1,819 in 1989 and that the CPI index was 128 in 1989. If the CPI index was 223 in​ 2009, then the cost of tuition in​ 2009, as the result of​ inflation, would equal ​$____ Suppose that the actual average cost of tuition in 2009 was ​$6,808. Relative to the expected cost computed​ above, the cost of tuition increased by ____ the amount of inflation.

cost(of tuition) x CPI(current year) / CPI(base year) = inflation $1819 x 223 / 128 = $3169.04 more than

Suppose that many cities begin to pass taxes on carbonated​ sodas, while at the same time scientists discover a cure for citrus​ greening, which is reducing orange crops in Florida and Brazil. Can we use this information to be certain whether the equilibrium price of orange juice will increase or​ decrease? Can we use this information to be certain whether the equilibrium quantity of orange juice will increase or​ decrease? In the market for orange​ juice, the effect of a tax on carbonated sodas is the demand curve will ___ In the market for orange​ juice, the effect of a cure for citrus greening is the supply curve will ___ The new market equilibrium will be where A. the original demand curve intersects the new supply curve. B. the new demand curve intersects the new supply curve. C. the new demand curve intersects the original supply curve. D. the new demand curve intersects the original demand curve. The equilibrium quantity of orange juice ___ and the equilibrium price of orange juice ____

shift right shift right B. the new demand curve intersects the new supply curve. will increase; may increase or decrease

You are considering purchasing stock. The stock is expected to pay a dividend of ​$11 per share. The consensus of investors is that these dividends will increase at a rate of 4 percent per year for the indefinite​ future, and the interest rate is 12 percent. The price of the stock should be ​$_____

stock price = Dividend/ (i-growth) $11/(.12-.04) = $137.50

Years​ ago, an apple producer argued that the United States should enact a​ tariff, or a​ tax, on imports of bananas. His reasoning was​ that: ​"the enormous imports of cheap bananas into the United States tend to curtail the domestic consumption of fresh fruits produced in the United​ States." ​Source: Quoted in Douglas A.​ Irwin, Peddling​ Protectionism: Smoot-Hawley and the Great​ Depression, Princeton,​ NJ: Princeton University​ Press, 2011, p. 22. This producer apparently assumed apples and bananas to be ___ In a graph​ (not shown) of the banana market in the United​ States, the imposition of a tariff on banana imports would A. shift demand​ leftward, decreasing equilibrium price and equilibrium quantity. B. shift supply​ leftward, decreasing equilibrium price and increasing equilibrium quantity. C. not shift any curve but raise the equilibrium price because taxes are always passed on to the consumer. D. shift supply​ leftward, increasing equilibrium price and decreasing equilibrium quantity. In the graph to the right do the​ following: ​1.) Use the line drawing tool to draw and label the apple demand and supply curves before the tariff is imposed on bananas. ​2.) Use the point drawing tool to identify and label the initial equilibrium in the apple market. ​3.) Use the line drawing tool to draw and label the new curve or curves in the apple market to reflect the impact on the apple market. ​4.) Use the point drawing tool to identify and label the new equilibrium point in the apple market.

substitutes D. shift supply​ leftward, increasing equilibrium price and decreasing equilibrium quantity. C:\Users\kitty\OneDrive\Documents\UConn\Spring 2019\ECON 1202\ch 5 Q5 graph.png