Macro Ch 1
Let V1 equal the value of a variable in period 1 and V2 equal the value of the same variable in period 2. What is the rate of growth between periods 1 and 2?
((V2-V1)/V1) x 100
2nd year numbers - 1st year numbers divided by the 1st year numbers = percent change
2nd year numbers - 1st year numbers divided by the 1st year numbers = percent change
The Stogie Shop, a cigar store in the mall, sells hand−rolled cigars for $10.00 and machine−made cigars for $2.50 each. What is the opportunity cost of buying a hand−rolled cigar?
4 machine−made cigars
Which of the following is a normative economic statement?
Global warming should be at the top of every economic agenda.
Which of the following is a microeconomics question?
How will Apple decide on a selling price for the iPad?
Which of the following is a positive economic statement?
If the price of gasoline rises, a smaller quantity of it will be bought.
Which of the following covers the study of topics such as inflation or unemployment?
Macroeconomics
scarcity
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
Which of the following statements about positive economic analysis is true ?
Positive analysis uses an economic model to estimate the costs and benefits of different course of actions.
________ is a problem that occurs when someone concludes that a change in variable X caused a change in variable Y when, in fact, it is a change in variable Y that caused a change in variable X.
Reverse causality
Which of the following is a normative economic statement?
The price of milk is too high.
The prevalence of Alzheimer's dementia is very high among residents living in nursing homes. A student concludes that it is likely that living in a nursing home causes Alzheimer's dementia. What is the flaw in the student's reasoning?
The student is drawing a false conclusion; he is making the error of reverse causality.
Which of the following statements is false?
Trade−offs do not apply when the consumers purchase a product for which there is excess supply, such as a stock clearance sale.
Which of the following is a macroeconomics question?
What determines the minimum wage?
Which of the following is a macroeconomics question?
What determines the unemployment rate?
a time-series graph.
Y- axis is percentage tax , X-axis is year
Economic models
are simplified versions of reality.
Skeeter's Skeeball Castle has seen its business slow down ever since Kerrie's Off−Key Karaoke opened up next door. Since the opening of Kerrie's Off−Key Karaoke, the opportunity cost of playing skeeball at Skeeter's has
increased
Positive analysis
is concerned with what is
normative analysis
is concerned with what ought to be.
Economics
is the study of the choices people make to attain their goals, given their scarce resources.
When Dr. Goldfinger decides on the companies in which he will invest, a ________ issue is being addressed.
microeconomic
If a straight line passes through the point x = 12 and y = 4 and also through the point x = 4 and y = 8, the slope of this line is
negative one half.
Allocative efficiency
occurs when a good or service is produced at the lowest possible cost.
Productive efficiency
occurs when production is in accordance with consumer preferences.
Every society faces economic trade−offs. This means
producing more of one good means less of another good can be produced
Opportunity cost
the highest valued alternative that must be give up to engage in an activity.
Opportunity cost is defined as
the highest valued alternative that must be given up to engage in an activity.
Suppose that there are three variables involved in the graph to the right: (1) quantity, (2) price, and (3) a third variable. Which of those variables causes the quantity to change from point C to point D in the graph?
the third variable
Consider the following economic agents: a. the government b. consumers c. producers Who, in a modern mixed economy, decides what goods and services will be produced with the scarce resources available in that economy?
the government, consumers, and producers
Scarcity refers to the situation in which
unlimited wants exceed limited resources.
The slope of a straight line equals the change in value on the ____________ axis ____________ by the change in the value on the other axis between any two points on the line.
vertical; divided
Economics is about neutral analysis
which measures the costs and benefits of different courses of action.
Which of the following shows a negative nonlinear relationship?
y= 99/x
At a recent company meeting, Geraldine Erwin, sales manager of Dastoria, a flavored-beverage producer announced, "We have increased our sales by 8 percent in just six months." Suppose six months ago, its sales amounted to $452,000, what is the value of its sales today?
$488,160
In 2015, Peelville consumed 30,000 bananas. In 2016, banana consumption rose to 35,000. Calculate the percentage change in banana consumption.
16.67%
In 2015, Smileytown consumed 50,000 tubes of toothpaste. In 2016, toothpaste consumption rose to 62,000 tubes. Calculate the percentage change in toothpaste consumption.
24%
Economics is the study of the ________ people make to attain their goals, given their ________ resources.
choices; scarce