Economics CH 1 Homework

Economists often are interested in percentage change from one period to the next. The percentage rate of change of gross domestic product​ (GDP) is an important macroeconomic variable. If in 2010 GDP was​ $11,150 billion​ dollars, and GDP increased to ​$11,712 billion in​ 2011, what is the growth rate of the U.S. economy in​ 2011? nothing​%. ​(Enter your response rounded to one decimal​ place.)

% change = Value in the 2nd period - value in the 1st period Divided by value in the 1st period x 100 11,712 - 11,150 % 11,150 X 100 = 5.0

Refer to the graph on the right What percentage of the marbles are​ blue? nothing​% ​(Enter your response as a percent rounded to one decimal​ place.)

% of blue marbles = # of blue marbles % total # of marbles X 100 11 % 60 X 100 = 18.3

What fraction of the marbles are​ red? ​(Enter your response as a decimal rounded to two decimal​ places.)

12 --- = .12 100

What fraction of the marbles are​ yellow? nothing ​(Express your answer as a​ fraction.)

23 --- 60

The pie chart illustrates hypothetical data for the market share for the United States automobile market. The percentage of the U.S. market that U.S. auto firms control is nothing​%. ​(Enter your response as an​ integer.)

40%

The diagram to the right illustrates a hypothetical demand curve representing the relationship between price​ (in dollars per​ unit) and quantity ​(in ​1,000s of units per unit of time​). Total revenue is ​$nothing. ​(Enter your response as an​ integer.)

45 x 45 = 2025

The bar graph to the right illustrates hypothetical data for the market share for the United States automobile market. The percentage of the U.S. market that U.S. auto firms control is nothing​%. ​(Enter your response as an​ integer.)

65%

The diagram to the right is an example of A. a​ time-series graph. B. a pie chart. C. a bar graph. D. an economic map.

A. a​ time-series graph.

Any model is based on making assumptions because A. we cannot analyze an economic issue unless we reduce its complexity. B. models have to be simplified to be useful. C. both a and b. D. neither a nor b.

C. both a and b.

_________ ​decide(s) what goods and services will be produced.

Consumers, firms, and the government

Economists use the word marginal to mean an extra or additional benefit or cost of a decision. An optimal decision occurs when A. marginal cost is zero. B. marginal benefit is maximized. C. marginal benefit is greater than marginal cost. D. marginal benefit equals marginal cost.

D. marginal benefit equals marginal cost.

One of the basic facts of life is that people must make choices as they try to attain their goals. This unavoidable fact comes from a reality an economist calls A. the market. B. economics. C. rationality. D. scarcity.

D. scarcity.

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 futile because where the environment is​ concerned, it has been repeatedly shown that firms do not respond to economic incentives. D. the policies are consistent with economic incentives.

D. the policies are consistent with economic incentives.

The diagram to the right represents a demand curve for apples. The original demand curve is D1. If a factor other than price which affects demand​ changes, causing demand to increase​, the resultant demand curve is represented by .

D2

_______ is the study of the choices people make to attain their​ goals, given their scarce resources.

Economics

In the United​ States, who receives the goods and services produced depends largely on

How income is distributed

Complete the following​ table: ​(Enter your responses rounded to two decimal​ places.) Initial value 165 New value ? Percentage change 16.97

New Value = Initial value X Percent change % 100 + Initial Value 165 X 16.97 % 100 + 165 = 193.00

Complete the following​ table: ​(Enter your responses rounded to two decimal​ places.) Initial value 166 New value 114 Percentage change ?

New value - Initial value % Initial value X 100 = Percent Change 114 - 166 % 166 X 100 = 31.33

The diagram to the right illustrates a supply curve. As with all supply ​curves, this​ curve's slope is .

Positive

The diagram to the right shows a hypothetical demand curve for apples. The slope of this curve is nothing. ​(Enter your response rounded to two decimal places. Include a minus sign if​ appropriate.)

The formula for slope​ is: Slope =Change in the value on the vertical axis % Change in the value on the horizontal axis = Δy ---- Δx. 10 - 80 -------- = -1.16 80 - 20

The slope of a curve is defined as the _____ divided by the _____ ​(Assume the Y values are on the vertical axis and the X values are on the horizontal​ axis)

The slope of a curve is defined as the Δy divided by the Δx

A market is a group of _____ of a good or service and the institution or arrangement by which they come together to trade.

buyers and sellers

A ______ economy is an economy in which most economic decisions result from the interaction of buyers and sellers in markets but in which the government plays a significant role in the allocation of resources.

mixed

In the diagram to the​ right, the curve labeled​ "S" is apparently​ _____, while the curve labeled​ "D" is apparently​ _____. A. ​nonlinear; linear B. ​static; dynamic C. ​dynamic; static D. ​linear; nonlinear

A. ​nonlinear; linear

Societies organize their economies in two main ways to answer the three questions of​ what, how, and who. A society can have a centrally planned _____economy in which the government decides how economic resources will be allocated. Or a society can have a ____ economy in which the decisions of households and firms interacting in markets allocate economic resources.

centrally planned market

Microeconomics is the study of A. firms as individual units excluding how these firms interact with one another. B. how households and firms make​ choices, how they interact in​ markets, and how the government attempts to influence their choices. C. the economy as a​ whole, including topics such as​ inflation, unemployment, and economic growth. D. ​"small" (less than​ $100,000) economic transactions in the economy.

B. how households and firms make​ choices, how they interact in​ markets, and how the government attempts to influence their choices.

Opportunity cost is A. the idea that because of​ scarcity, producing more of one good or service means producing less of another good or service. B. the highest valued alternative that must be given up to engage in an activity. C. when unlimited wants exceed the limited resources available to fulfill those wants. D. when consumers and firms use all available information as they act to achieve their goals.

B. the highest valued alternative that must be given up to engage in an activity.

Economics is a social science because A. it applies the scientific method to the study of the interactions among individuals. B. it is based on studying the actions of individuals. C. it considers human behavior—particularly ​decision-making behavior. D. all of the above.

D. all of the above

Complete the following​ table: ​(Enter your responses rounded to two decimal​ places.) Initial value 75 New value 117 Percentage change ?

New value - Initial value % Initial value X 100 = Percent Change 117 - 75 % 75 X 100 = 56

______is concerned with what is​, and _______ is concerned with what ought to be. Economics is about _______ which measures the costs and benefits of different courses of action.

Positive, normative, positive

______ occurs when a good or service is produced at the lowest possible cost. _____ occurs when production is in accordance with consumer preferences.

Productive efficiency Allocative efficiency

When we graph the relationship between two​ variables, we often want to draw conclusions about whether changes in one variable are causing changes in the other variable. Doing​ so, however, can lead to incorrect conclusions. Reasons for drawing incorrect conclusions about cause and effect include A. reverse causality. B. an omitted variable. C. both a and b. D. none of the above.

C. both a and b.

1) In your economics​ class, you scored a 60 on the first​ quiz, a 91 on the second​ quiz, and an 73 on the third quiz. Your average quiz grade is nothing. ​(Enter your response rounded to one decimal​ place.) 2) On the fourth​ quiz, you scored an 80. Did the fourth quiz raise your​ average?

1) 60 + 91 + 73 = 224 divded by 3 = 74.6 2) 60 + 91 + 73 + 80 = 304 Divded by 4 = 76 YES

​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, who will receive the goods and services​ produced? B. ​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? C. ​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? D. ​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?

A. ​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?

The diagram to the right illustrates a hypothetical demand curve representing the relationship between price​ (in dollars per​ unit) and quantity​ (in 1,000s of units per unit of​ time). The area of the triangle shown on the diagram is ​$nothing. ​(Enter your response as an​ integer.)

Area of a triangle​ = ½ Base​ × Height. For the diagram​ below, because the curve is a demand​ curve, the area of the triangle is a specific dollar amount. The area of the triangle represents ​$242,000. We can calculate the area of the triangle by multiplying the base ​(50 − 28 — in​ 1,000s of​ units) and height ​($62−​$40​) and then divide by 2.

Which of the following covers the study of topics such as inflation or​ unemployment? A. Microeconomics B. Macroeconomics C. Both microeconomics and macroeconomics give equal emphasis to these problems. D. None of the above.

B. Macroeconomics

Microsoft charges a price of​ $599 for a copy of Windows 7. Is this pricing decision​ rational? A. ​Microsoft's choice cannot be​ rational: the price is clearly more than most people are willing and able to pay. B. When we assume the managers at Microsoft have used all available information and have weighed all known benefits and​ costs, we are assuming rationality. C. ​Microsoft's choice was​ rational: the price will maximize profit. D. We cannot assume that this pricing decision was rational because we do not have enough information to make an assumption.

B. When we assume the managers at Microsoft have used all available information and have weighed all known benefits and​ costs, we are assuming rationality.

The diagram to the right illustrates a very important relationship in economics between two​ variables: the price of a good and the quantity demanded of that good. The two variables in this diagram​ are: A. price​ (bushels per​ week) on the vertical axis and quantity​ (dollars per​ bushel) on the horizontal axis. B. price​ (dollars per​ bushel) on the vertical axis and quantity​ (bushels per​ week) on the horizontal axis. C. price​ (dollars per​ bushel) on the horizontal axis and quantity​ (bushels per​ week) on the vertical axis. D. none of the above.

B. price​ (dollars per​ bushel) on the vertical axis and quantity​ (bushels per​ week) on the horizontal axis.

The diagram to the right illustrates a common economic relationship. Economists know this relationship as marginal cost​ (MC). The diagram illustrates the relationship between the change in total cost and quantity produced. There are three lines​ (A, B, and​ C) drawn tangent to the MC curve. At line​ A, the MC curve has a​ _____ slope. Where lines B and C touch the MC​ curve, the slope is​ _____ and​ _____. A. ​positive; negative; decreasing B. ​negative; positive; increasing C. ​positive; negative; increasing D. ​negative; positive; decreasing

B. ​negative; positive; increasing

Macroeconomics is A. the study of firms as a group with special emphasis on how these firms interact with one another. B. the study of​ "large" (greater than​ $100,000) economic transactions in the economy. C. the study of the economy as a​ whole, including topics such as​ inflation, unemployment, and economic growth. D. the study of how households and firms make​ choices, how they interact in​ markets, and how the government attempts to influence their choices.

C. the study of the economy as a​ whole, including topics such as​ inflation, unemployment, and economic growth.

A hypothesis in an economic model is A. tested before it can be accepted​ (or not​ rejected). B. usually about a causal relationship. C. a statement that may be either correct or incorrect about an economic variable. D. all of the above.

D. all of the above.

Complete the following​ table: ​(Enter your responses rounded to two decimal​ places.) Initial value 5,188 New value 12,008 Percentage change ?

New value - Initial value % Initial value X 100 = Percent Change 12,008 - 5,188 % 5,188 X 100 = 131.46