Econ 201 Final

A bakery operating in competitive markets sells its output for $20 per cake and hires labor at $10 per hour. To maximize profit, it should hire labor until the value of the marginal product of labor is ___ of cakes per hour.

10

In 2012, the Bureau of Labor Statistics (BLS) announced that of all adult Americans, 142,496,000 were employed, 12,506,000 were unemployed, and 88,310,000 were not in the labor force. What is the adult population? (Enter a numeric value without commas.)

243312000

Leadbelly Co. sells pencils in a perfectly competitive product market and hires workers in a perfectly competitive labor market. Assume that the market wage rate for workers is $80 per day. At the profit-maximizing level of output, the marginal product of the last worker hired is 20 boxes of pencils per day. The price of a box of pencils is $ ___. (Enter a numeric value as x below.)

4

Suppose GDP is $12 trillion, taxes are $3.6 trillion, private saving is $1.5 trillion, and public saving is $0.8 trillion. Assuming the economy is closed, what is consumption? (Numbers should be rounded to the nearest decimal, e.g. 5.1)

6.9

In 2012, the Bureau of Labor Statistics (BLS) announced that of all adult Americans, 142,496,000 were employed, 12,506,000 were unemployed, and 88,310,000 were not in the labor force. The size of the labor force is 155,002,000. What is the labor force participation rate is? (Enter a percentage. For example 53.505% should be entered as 53.51 below without a percent sign.)

63.71

In 2012, the Bureau of Labor Statistics (BLS) announced that of all adult Americans, 142,496,000 were employed, 12,506,000 were unemployed, and 88,310,000 were not in the labor force. What is the unemployment rate? (Enter a percentage. For example 53.505% should be entered as 53.51 below without a percent sign.)

8.07

The ________ conducts the _________ each month, which uses _________ sampling to reflect the social and economic distribution in the US by only surveying 60,000 households.

BLS CPS stratified

The market for fertilizer is perfectly competitive. Firms in the market are producing output but are currently making economic losses in the short run. Which of the following statements is true about the price of fertilizer? Select one or more: a. The price of fertilizer must be less than average variable cost. b. The price of fertilizer must be greater than marginal cost. c. The price of fertilizer must be greater than average total cost.

a

The fall in total surplus that results when a tax (or some other policy) distorts a market outcome is called _______________

a deadweight loss

All else equal, if there are diminishing returns, then which of the following is true if a country increases its capital by one unit? Select one: a. Output will rise by more than it did when the previous unit was added. b. Output will rise but by less than it did when the previous unit was added. c. Output will fall by more than it did when the previous unit was added. d. Output will fall but by less then it did when the previous unit was added.

b

If government regulations make a certain job less dangerous, then we'd expect that the supply of labor for that job would Select one: a. decrease, which by itself would reduce the wage for that job. b. increase, which by itself would reduce the wage for that job. c. increase, which by itself would raise the wage for that job. d. decrease, which by itself would raise the wage for that job.

b

Other things the same, if a country increased its saving rate, in 40 years or so it would likely have Select one: a. higher productivity, and a higher growth rate of real GDP. b. higher productivity, but not a higher growth rate of real GDP. c. the same productivity and growth of real GDP it began with. d. None of the above is correct.

b

Suppose that a labor economist claims that recipients of economics PhDs gain little in terms of acquired productive skills from their graduate studies but that, instead, the degree simply reflects a high level of inherent mathematical ability. Which one of the following characterizes the labor economist's perspective on the link between education and wages? Select one: a. Human capital b. Signaling c. The superstar phenomenon d. Compensating differentials

b

The city government is considering a tax proposal to reduce burger consumption : a tax of $1 per burger, paid by producers of hamburgers. Which of the following statements is true as a result of the per-burger tax? Select one or more: a. Average total cost will remain unchanged. b. Average variable cost will increase. c. Marginal cost will increase.

b

Which of the provisions of the health insurance reform attempts to solve the problem of adverse selection in the health insurance market? Provisions: A. Insurance companies must offer health insurance to everyone who applies and charge them the same price regardless of a person's preexisting health condition. B. Everyone must buy health insurance or pay a penalty for not doing so. Select one: a. A b. B

b

Suppose that the president proposes a new law aimed at reducing healthcare costs: All Americans are required to eat one apple daily. Which of the following statements correctly describes the effect of this apple-a-day law? (Think about how the demand(or)supply for apples changes and how the demand(or)supply for apple pickers changes.) Select one or more: a. The marginal product of apple pickers increases. b. The equilibrium price of apples increases. c. The demand for apple pickers remains unchanged. d. The demand for apples remains unchanged. e. The wage of apple pickers increases. f. The value of the marginal product of apple pickers increases.

b e f

According to the human-capital view, education Select one: a. alters work ethic. b. has no effect on lifetime earnings. c. enhances productivity. d. is an indicator of natural ability.

c

What is the opportunity cost of investing in capital? Select one: a. Improved technology that leads to faster growth b. Higher taxes c. The loss of consumption that results from redirecting resources toward investment

c

When a society decides to increase its quantity of physical capital, the society Select one: a. can avoid the usual need to face trade-offs. b. is apparently not very concerned about its rate of economic growth in the future. c. is in effect deciding to consume fewer goods and services in the present. d. is in effect deciding to save less of its current income in the present.

c

Societies choose what share of their resources to devote to consumption and what share to devote to investment. Some of these decisions involve private spending; others involve government spending. For each form of private spending, indicate whether it represents consumption or investment. People buying washing machines Firms buying automobiles for delivery services People buying automobiles Firms buying machines

consumption investment consumption investment

Which of the following is a determinant of productivity? Select one: a. human capital per worker b. physical capital per worker c. natural resources per worker d. All of the above are correct.

d

Charles, a full-time college student, graduates and is immediately employed. Unemployment Rate __________ Labor-Force Participation Rate ____________

decreases increases

Gilberto has a birthday, becomes an adult, and starts working in a restaurant. Unemployment Rate _______ Labor-Force Participation Rate __________

decreases increases

Adam Smith wrote, "Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things." True or False: Low taxation would lead to slower economic growth because it encourages citizens and businesses to consume more and invest less.Other things the same, if a country increased its saving rate, in 40 years or so it would likely have

false

True or False: A profit maximizing monopolist sets price equal to MR.

false

True or False: Because MC is always falling ATC increases.

false

True or False: If insurance companies have to charge all applicants the same price, health insurance premiums would likely fall.

false

True or False: The value of the marginal product of labor is defined as the marginal product (items produced) produced by an additional unit of labor times the cost of that labor.

false

Suppose the demand for coffee is relatively elastic compared to the supply of coffee. Then the supply of coffee shifts in because of major hurricanes. The equilibrium price will ____, the quantity demanded will ____ and total expenditures on coffee will ____.

increase decrease decrease

Lorenzo, a construction worker, dies in an accident at work. Unemployment Rate ________ Labor-Force Participation Rate _________

increases decreases

For each form of government spending, indicate whether it represents consumption or investment. Buying medical equipment Building hospitals Paying workers to administer government programs Building roads

investment investment consumption investment

A more elastic supply of loanable funds would result in investment changing by ____________ as a result of the increase in government borrowing. The more elastic the demand for loanable funds, the __________ the change in investment as a result of the increase in government borrowing.

less smaller

Consumer Surplus and Producer Surplus are used in estimating ____________

market efficiency

The _______ rate of unemployment is 5 percent. Workers who are in between jobs but searching add to _________ unemployment, while changes in the types of jobs available and the skills needed for them add to _________ .

natural frictional structural

If demand is inelastic, a drought around the world would ___________ the total revenue that farmers receive from the sale of grain.

raise

Suppose the government borrows $20 billion more next year than this year. The following graph shows the market for loanable funds before the additional borrowing for next year. As a result of this policy, the equilibrium interest rate ___________ . The equilibrium quantity of loanable funds (and therefore, investments) will ___________ by less than $20 billion.

rises decreases

Dina is on maternity leave and will resume working in two months. Unemployment Rate _________ Labor-Force Participation Rate_________

stays the same stays the same

Suppose there is a decrease in the minimum wage. True or False: The amount of unemployment in this industry falls as a result of the decrease in the minimum wage.

true

True or False: A competitive, profit-maximizing firm hires workers up to the point at which the value of the marginal product of labor equals the market wage.

true

True or False: A profit maximizing monopolist chooses the quantity produced by where MR = MC.

true

True or False: A proposed increase in the minimum wage would decrease the total wage payments to unskilled workers if the demand for unskilled labor were elastic.

true

True or False: As a result of an increase in the earnings gap between skilled and unskilled jobs, the incentive to get a college education has been increasing.

true

True or False: For a firm operating in a perfectly competitive industry, marginal revenue and average revenue are equal.

true