macro econ final exam

what are the institutions that help foster the appropriate incentives for economic growth?

a dependable legal system, property rights, and competitive and open markets

a decrease in demand refers to:

a leftward shift of the demand curve

wealthy countries tend to have ____ physical capital per worker and ____ human capital per worker.

a lot of; a lot of

an increase in supply refers to:

a rightward shift of the supply curve

which of the following choices contains only factors that cause the supply curve to shift to the right?

a rise in technology, a fall in the costs of production, a fall in taxes on output

what's the difference between a shift in the demand curve and a movement along the demand curve?

a shift implies a change in the whole demand curve; a movement does not

inflation is:

an increase in the general level of prices

when two people voluntarily trade with each other:

both of them will be better off

vernon smith tested the supply and demand model in the laboratory and found that

buyers and sellers quickly converged on the predicted equilibrium

economists believe people make decisions by

comparing marginal costs with marginal benefits

the quantity demanded of a good or service is the amount that:

consumers are willing and able to buy at a given price

if scientists discover a new form of energy that cuts the cost of producing electricity to the equivalent of a $10 barrel, what will happen to the market for oil?

demand for oil will decrease over time since no one will pay more than $10 for a barrel of oil to produce energy

since improved technology continually lowers the cost of discovering and producing oil, how can rising oil prices in recent years be explained?

demand has increased more than supply has increased, raising prices

the ___ has the power to regulate the money supply in the US

federal reserve

two major policies used by the government to affect economic conditions are:

fiscal and monetary policy

booms and busts refer to the:

fluctuations in economic activity over time

when markets don't align self interest with social interest:

governments may improve the situation by changing incentives.

which of the following would increase the demand for beef

higher consumer income

which of the following best explains why economists want to understand the determinants of economic wealth?

higher levels of wealth tend to generate better health and human rights outcomes across countries

the most important tools in economics, according to the text book, are supply, demand, and the:

idea of equilibrium

several states offer rebates on the purchase of electric vehicles. this practice highlights the idea of:

incentives

the quantity supplied:

is the amount that sellers are willing and able to sell at a particular price.

South Korea became much richer than North Korea as a result of:

its economic systems and incentives

deciding whether to study for an additional hour for an exam by comparing the additional benefits to the additional costs of an extra hour of study is an example of:

marginal thinking

which statement is correct regarding the federal reserve?

most economists believe that the federal reserve does more good than harm

a person has a comparative advantage in activity x when that person's:

opportunity cost is lower for him than for other trading partners

Adam Smith's "invisible hand" refers to

people's pursuit of their own self- interest.

technological advances have increased the supply of digital cameras. as a result, the:

quantity demanded for digital cameras will increase

in a free market setting where quantity supplied is 40 units and quantity demanded is 50 units, price will

rise

the equilibrium price is:

stable because at this price the quantity demanded equals the quantity supplied

total producer surplus equals:

the area above the supply curve and beneath the market price

the covid-19 pandemic caused many consumers to be quarantined in their homes. the supply and demand model would predict which of the following events in the market for craft supplies sold by online craft stores?

the demand for craft supplies sold by online retailers would increase, resulting in higher equilibrium price and a higher equilibrium quantity.

gains from trade are maximized when:

the market price is equal to equilibrium price

when the price of a good decreases

the quantity demanded increases

the supply curve illustrates:

the relationship between the quantity supplied and the price of a good

laboratory experiments by vernon smith support

the supply and demand models usefulness in predicting changes in a free market

new production technology in the manufacture of 4K ultra-high-definition TV screens has reduced the cost of production. what effect will this have in the market for TV's?

the supply curve will shift to the right

the opportunity cost of a choice is:

the value of the next best opportunity foregone

which statement explains why the federal reserve has a tough job?

there are lags in the effects of monetary policy, and economic conditions continuously change

what does the law of supply state

there's a positive relationship between price and quantity supplied

the great economic problem is how to arrange our scarce resources:

to satisfy as many of our wants as possible