ECON: Chapter 7, 8, & 9

The table gives data about​ Northland's economy in 2018. What is the value of GDP in Northland in 2018​? Consumption expenditure: $720B Wages: $652B Indirect taxes less subsidies: $148B Investment: $235B Net exports of goods and services: $54B Profit: $171B Government expenditure on goods and services: $282B

$1,291B

The table gives data about​ Northland's economy in 2018. What is the value of GDP in Northland in 2018​? Consumption expenditure: $760B Wages: $688B Indirect taxes less subsidies: $155B Investment: $261B Net exports of goods and services: $52B Profit: $189B Government expenditure on goods and services: $298B

$1,371B

When Mark's produces its new​ profit-maximizing output, the number of haircuts it produces is $__ an hour. Mark's profit-maximizing price is ​$__ a haircut. Mark's economic profit is ​$__.

$3; $9; $0

Dave sells 4 gallons of milk at​ $5 per gallon. If he increases his sales to 5 gallons at the same price per​ gallon, calculate​ Dave's marginal revenue from selling milk.

$5

In​ 2015, the price of a coconut is ​$2.50 and the quantity produced is 300. In 2019​, the price of a coconut is ​$3.00 and the quantity produced is 350. 2015 is the base year. What is real GDP in 2019​?

$875

GDP in the United States increased between 2018 and 2019. Which of the following could NOT account for this​ increase? A. Our disposable income increased. B. We paid lower prices for our goods and services and production remained constant. C. We produced more goods and services and prices remained relatively constant. D. A combination of producing more goods and services and paying higher prices for our goods and services occurred.

B. We paid lower prices for our goods and services and production remained constant.

Which of the following is included in the measure of U.S.​ GDP? A. the flour purchased by Interstate Bakeries and used to make Wonder Bread B. a loaf of Wonder Bread produced and sold in the United States C. a loaf of Wonder Bread produced in Canada by Canadians D. a loaf of Wonder Bread produced in Mexico by American workers

B. a loaf of Wonder Bread produced and sold in the United States

Which of the following statements about the business cycle is​ true? a. The expansion stage of the business cycle is not the usual condition of the economy. B. An expansion ends when the economy reaches a recession. Your answer is not correct. C. A business cycle is periodic but irregular. D. During an​ expansion, real GDP is equal to potential GDP.

C. A business cycle is periodic but irregular.

Which of the following is an example of​ investment? A. a person investing $ 250 a month in the stock market B. a student increasing his human capital by attending college C. a firm adding unsold output to inventory D. a person depositing $ 100 a week to her savings account

C. a firm adding unsold output to inventory

Which of the following is an example of​ investment? A. a person money adding money to his retirement fund B. a person's annual medical checkup C. the purchase of new buses by Greyhound D. a student increasing his human capital by attending college

C. the purchase of new buses by Greyhound

In​ 2008, J was ​$1.0 ​trillion, R was ​$2.0 ​trillion, Z was −$1 trillion, Q was ​$12.0 ​trillion, and U was ​$4.0 trillion. Calculate saving and consumption expenditure.

Consumption expenditure is ​$8.0 trillion. Saving is ​$2.0 trillion.

Which of the following is an example of a ​price-discriminating monopoly​?

IMAX charges​ $6 per movie ticket for children younger than​ 8, and​ $8.50 per movie ticket for adults

Which of the following is an example of regulation​?

The Surface Transportation Board influences the prices on interstate railroads.

In 2014​, U.S. exports of goods and services are ​$2,335 billion and imports of goods and services are ​$2,899 billion. What is the value of net​ exports?

The value of net exports in 2014 is −564 billion dollars.

There is one newspaper publisher in the town of​ Sparta, and it is a monopoly. The table shows the total revenue and total cost schedules of the publisher. What is the​ publisher's profit-maximizing​ output?

The​ publisher's profit-maximizing output is 120 newspapers per day.

The figure shows the flows of expenditure and income on Lotus Island. In​ 2016, R was ​$5 ​billion; W was ​$36 ​billion; U was ​$13 ​billion; J was ​$17 ​billion; and Z was ​$6 billion. Calculate total expenditure and total income.

Total expenditure is $72B. Total income is $72B.

The National Collegiate Athletic Association​ (NCAA) controls the market for college athletes. It sets the amounts paid to these athletes below what they would be in a competitive market and ensures that colleges do not violate the rules that it lays down. Is the NCAA a natural​ monopoly, a legal​ monopoly, or​ neither?

a legal monopoly that oversees all college athletics in areas such as rule making and national championships

Sugar purchased from Angelo's bakery to make pies and cakes is an example of ____. (final​ good, an intermediate​ good, or neither.)

an intermediate good

Perfect competition is a market in which no advantage is established​ to firms; and buyers and sellers​ _____ about prices.

are well informed

Sue's Surfboards is the sole renter of surfboards on Big Wave Island. If marginal revenue is positive at the actual number of surfboard rentals made each​ hour, then​ _______.

at that quantity the demand for surfboard rentals is elastic

f the monopoly is​ regulated, what is the consumer​ surplus? Question content area bottom left The consumer surplus generated by​ _______ cost pricing rule is​ _______.

a​ marginal; $80 million per month

Which of the following is included in the measure of U.S.​ GDP? a. hyundai imported into the US b. 2013 Grand Am produced and sold as a new car in US in 2013 c. tires purchased by GM and installed on a Cadillac d. GM car assembled in Mexico

b. 2013 Grand Am produced and sold as a new car in US in 2013

What is or is not included in the measurement of​ GDP? a. We include a measure of political freedom and social justice in GDP b. The underground​ economy, which is not included in GDP is the part of the economy that is hidden from the view of the government. c. We include a measure of good health and life expectancy in GDP d. The underground​ economy, which is included in GDP is difficult to describe but easy to measure.

b. The underground​ economy, which is not included in GDP is the part of the economy that is hidden from the view of the government.

How can GDP increase at a rate of 4.6 percent if consumption expenditure increased at a rate of 6.7​ percent? a. Z is net exports and R is government expenditure on goods and services b. U is government expenditure on goods and services and J is investment c. J is investment and ​V+W is consumption expenditure d. V is consumption expenditure and Z is net exports e. W is government expenditure on goods and servcies and V is consumption expenditure

b. U is government expenditure on goods and services and J is investment

It is possible for GDP to increase by only 4.6 percent when consumption expenditure grew at a 6.7 percent rate because​ _______. a. total expenditure does not equal total income b. the sum of investment and net exports grew at a negative rate c. there is a measurement error d. the sum of investment and exports​ increased, but by less than 2.1 percent e. intermediate goods are included in the measurement of GDP

b. the sum of investment and net exports grew at a negative rate

Which of the following is an example of a ​single-price monopoly​? a. Electric companies charge a higher electricity price per unit during peak times of the day. b. Safeway sells most of its products at a higher price than Kroger. c. DeBeers sells diamonds of the same quality to all its customers at the same price. d. Glaxo can raise the price of some of its drugs due to an increase in demand.

c. DeBeers sells diamonds of the same quality to all its customers at the same price.

Which of the following statements describes a firm in a perfectly competitive​ market? a. produces as much as it can and either makes a profit or incurs a loss in the short run but breaks even in the long run b. faces a perfectly inelastic demand for its​ product, so it can select the price that maximizes its profit c. is a price taker and produces the quantity that maximizes its profit in both the short run and the long run d. can influence the price that it charges in the short run but not in the long run

c. is a price taker and produces the quantity that maximizes its profit in both the short run and the long run

in the short​ run, a firm​

can make a positive economic​ profit, incur an economic​ loss, or make zero economic profit

legal monopoly is a market in which​ _____ by the granting of a public​ franchise, government​ license, patent, or copyright.

competition and entry are restricted

A barrier to entry is any constraint that protects a firm from​ _____.

competitors

Perfect price discrimination is the price discrimination that extracts the entire​ _____ surplus by charging the​ _____ price that​ _____ are willing to​ _____ for each unit.

consumer; highest;​ consumers; pay

Sammie's Shiny Shoes is a firm that operates in a competitive market. The number of firms in the​ shoe-shining market increases. What decision will​ Sammie's make in the short​ run?

cut back on the number of shoes he shines

Marginal cost pricing rule is a rule that sets price​ _____ marginal cost to achieve​ _____ output.

equal​ to; an​ efficient;

Average cost pricing rule is a rule that sets price​ _____ average​ _____ cost to enable a regulated firm to avoid economic loss.

equal​ to; total

The industry that produces portable CD players is in​ long-run equilibrium. Some firms will​ _______ the​ market, and the market supply curve will shift​ _______.

exit; leftward

When do net exports of goods and services​ increase?

exports of goods and services increase by more than imports of goods and services increase

The market supply curve in the short run is

horizontal at the shutdown price and upward sloping at prices above the shutdown point

Perfect competition is a market in which each firm is selling​ _____ product;

identical

The industry that produces portable CD players is in​ long-run equilibrium. Then the demand for portable CD players decreases permanently. Firms in the market will _______

incur an economic loss

In​ long-run equilibrium, each firm is

making zero economic profit

Perfect competition is a market in which there are​ _____ firms,

many;

Checking account is an example of ___. (final​ good, an intermediate​ good, or neither.)

neither an intermediate nor final good

Monopoly is a market in which one firm sells a good or service that has​ _____ substitutes and​ _____ blocks the entry of new firms.

no close; a barrier

Omar is a potato farmer and the world potato market is perfectly competitive. The market price is ​$23 a basket. Omar sells 700 baskets a week and his marginal cost is ​$24 a basket. Is Omar maximizing​ profit? Why or why​ not?

not maximizing profit because marginal cost is greater than marginal revenue

Rick is an oyster farmer and the world oyster market is perfectly competitive. The market price is ​$19 a crate. Rick sells 400 crates a week and his marginal cost is ​$24 a crate. Rick is ______

not maximizing profit because marginal cost is greater than marginal revenue

Perfect competition is a market in which there are many buyers; ____ ______ to the entry of new firms into the​ industry;

no​ barriers;

a. ​ Coca-Cola cuts its price below that of​ Pepsi-Cola in an attempt to increase profit. b. A single​ firm, protected by a barrier to​ entry, produces a personal service that has no close substitutes. c. A barrier to entry​ exists, but the good has some close substitutes. d. A museum offers discounts to students and seniors. e. A firm can sell any quantity it chooses at the going price. f. A firm experiences economies of scale even when it produces the quantity that meets the entire market demand. The firm described in​ _____ can price discriminate because​ _____.

statement​ b; a personal service cannot be resold

a. ​ Coca-Cola cuts its price below that of​ Pepsi-Cola in an attempt to increase profit. b. A single​ firm, protected by a barrier to​ entry, produces a personal service that has no close substitutes. c. A barrier to entry​ exists, but the good has some close substitutes. d. A museum offers discounts to students and seniors. e. A firm can sell any quantity it chooses at the going price. f. A firm experiences economies of scale even when it produces the quantity that meets the entire market demand. The firm described in​ _______ is a natural monopoly. The firm described in​ _______ is a monopoly and it may be a legal monopoly.

statement​ f; statement b

The graph shows the demand curve for the good that a firm produces. How do we know that the firm is a perfectly competitive​ firm?

the firm can vary the quantity it sells without affecting the price it receives for the good it produces

What is gross national​ product?

the market value of all the final goods and services produced anywhere in the world in a given time period by the factors of production supplied by the residents of that country

A natural monopoly is a monopoly that arises because one firm can meet the entire market demand at a lower average​ _____ cost than two or more firms could.

total

When some firms exit an industry in which firms are incurring economic​ losses, the market supply curve shifts​ _______ and the market price​ _______.

​leftward; rises