econ
Mary buys three goods: A, B, and C. When her income rises she buys less of good A and more of goods B and C. When the price of good C rises she buys more of good B and less of good A. Which goods are complements?
A and C
Consider the market for gasoline. Which of the following shifts the supply curve for gasoline rightward?
A decrease in the price of a resource used to produce gasoline, such as crude oil.
When people buy durable goods such as cars, this counts in what category of GDP? [ Select ] ["consumption spending", "investment spending"] When firms buy durable goods such as cars, this counts in what category of GDP? [ Select ] ["investment spending", "consumption spending"] When firms buy new tires for their delivery trucks, this counts in what category of GDP?
Answer 1:consumption spending Answer 2:investment spending Answer 3:investment spending
Mary buys three goods: A, B, and C. When her income rises she buys less of good A and more of goods B and C. When the price of good C rises she buys more of good A and less of good B. Which goods are normal?
C and B
Suppose Jake and Tim can both produce two goods: football helmets and baseball bats. Which of the following is not possible?
Jake has a comparative advantage in producing both goods.
In which of the following situations would an individual be most harmed by a positive rate of inflation?
Joe is a minimum wage earner and the minimum wage has not changed for the last five years.
Suppose students like to eat pepperoni pizza, bean and rice burritos, and hamburgers (made from beef) from the food establishments on campus. Which of the following is most likely to increase the quantity of hamburgers sold?
The price of pepperoni increases
A change in which factor does not cause a shift of the supply curve?
a change in the price of the good
A decrease in the demand for labor can be expected to cause _____ in the equilibrium wage and _____ in the equilibrium quantity labor employed, all else the same.
a decrease : a decrease
Suppose you observe that the price of hamburgers (a normal good) has gone up. Which of the following would not be a valid explanation of the increase in the price of hamburgers?
a popular new diet claims beef is bad for you
Congress decides to increase the minimum wage from $7.25 per hour to $12.00 per hour, and they will phase in this change over the next three years. This is likely to cause:
an increase in structural unemployment.
Which of the following would cause a leftward shift of the demand curve?
an increase in the price of a complementary good
The price of gas rises during the summer because more people take vacations and so they drive more miles. In the market for gas, this is best represented by:
an upward movement along the supply curve
According to the circular flow diagram, households are _____ in the market for goods and services and are _____ in the market for factors of production.
buyers : sellers
When people in the U.S. buy new clothing, they find the clothing was often produced in a foreign country. In this case, how would the purchase of the new clothing affect U.S. GDP? Select the most correct answer.
consumption spending will increase and net export spending will decrease
In the market for a particular good there is an excess supply at the current price. Which of the following is likely to occur?
firms will have an incentive to lower the price of the good
Suppose one observes that when the price of good X increases, the demand for good Y decreases. One must conclude that
goods X and Y are complements.
All else the same, when the population in the country decreases then we can expect the equilibrium wage to ____ and the equilibrium level of employment to _____.
increase : decrease
According to the law of demand there is a(n)
inverse relationship between price and quantity demanded.
A country should specialize in producing the goods for which
it has a comparative advantage.
Suppose you observe that the price of ice cream has gone up. Which of the following would be a valid explanation of the increase in the price of ice cream?
it is summer time
An increase in the wages the firm must pay to its employees causes a(n)
leftward shift of the supply curve.
According to the supply/demand model:
price will rise if quantity supplied is less than quantity demanded.
Transfer payments are:
spending that transfers resources from the government to individuals.
Assume the GDP deflator falls from 162 to 157. This means that
the average price level has fallen.
The price of a good has gone down. What would be a good explanation of this?
the cost of a key input used to produce the good has declined.
A price index measures:
the current cost of a fixed quantity of goods divided by the base cost of a fixed quantity of goods.
A campus organization provides a free lunch to all students. In this case
the explicit cost of eating the lunch is zero.
To compare the well being of people in two different countries it is best to compare
the value of GDP per capita in each country.
Suppose that the equilibrium price of coffee decreases but the equilibrium quantity of coffee sold stays the same. The best explanation for these observations is
there has been a decrease in demand and an increase in supply of coffee.
When full time students with no job graduate from college and begin looking for work they are counted as:
unemployed and part of the labor force
To calculate GDP using the income approach we would add up:
wages + interest + rent + profits.
