Macroeconomics Test 1 (Quiz Questions)

If a farmer in Indiana can produce 200 pounds of beets and no corn or no beets and 100 pounds of corn, and he faces a linear production possibility frontier, the opportunity cost of producing a additional pound of beets is ________pounds of corn

0.5

Suppose the economy consists of two goods cheese and yogurt. If their production possibility frontier is a straight line it tells us that the opportunity cost of producing one more unit of cheese is

A constant amount of yogurt

Suppose that a decrease in construction projects in the Euro area results in a decrease in demand in Europe for Chinese produced steel. All else remaining equal, this should lead to which of the following?

A decrease in demand for Chinese yuan

Suppose new legal barriers are enacted in the Euro area to restrict imports of manufactured goods produced in the United States. All else remaining equal, this should lead to which of the following?

A decrease in supply of Euro

Complements

A decrease in the price of one good lead to an increase in the demand for the other

Substitutes

A decrease in the price of one good leads to a decrease in demand for the other

Suppose new legal barriers are enacted in the United States to restrict imports on manufactured goods produced in China. All else remaining equal, this should lead to which of the following

A decrease in the supply of US dollars

In a situation in which there a technological improvements we generally see

A shift in the production possibility, frontier, outward

Given that people usually exploit opportunities to make themselves better off, which of the following policies is most likely to reduce road congestion in Los Angeles

A toll road that requires each car to pay congestion fee to enter the city center

The trade-off between equity and efficiency occurs because

Allocating resources fairly may lead to inefficiency

Suppose there is an increase in demand in Europe for US produced automobiles. All else remaining equal, this should lead to which of the following?

An increase in demand for US dollars

Suppose there is an increase in demand in the Euro area for grain produced in Russia, all else remaining equal, this should lead to which of the following?

An increase in demand for the Russian Ruble

Which factor would shift the demand curve for new computers to the right?

An increase in student enrollment in college (anything that doesn't have to do with price shifts, anything having to do with price moves along the demand curve)

Suppose legal barriers in the United States are reduced to allow more imports of electronic consumer goods produced in Japan. All else remaining equal, this should lead to which of the following?

An increase in supply of US dollars

Which factor would cause a supply curve to shift to the left?

An increase in the cost of an input used to produce a good

When Brazil engages in trade with Germany

Both Germany and Brazil will be better off

If an economy must sacrifice increasing amounts of cheese, for each additional unit of yogurt produced than its production possibility frontier is

Bowed out

Inferior good

Demand decreases when income increases

Normal good

Demand increases when income increases

Which decision is the best example of making a choice at the margin?

Drinking another cup of matcha tea

In soccer, when one coach decides the sun in a substitute, the other manager, often adjust her lineup and response that change. This sometimes causes the first manager to send in a different player. Once both managers decide that no more player substitutions will benefit their team the situation has reached

Equilibrium

If Isabella drive to a Kansas City, 120 miles from Manhattan, Kansas (home of Kansas State University) to do her back to school shopping

Hurt Isabella's community because Isabella spending will be an income for people in the large city

An inferior good is one for which a ____ in buyers incomes causes _____

Increase; decrease in demand

Suppose Canada is producing on its production possibility frontier, and it decides to increase the production of aluminum and decrease the production of iced wine. The powder production possibility frontier suggests an opportunity cost of steel.

Increasing

The effect of a decrease in productive input, such as labor and capital can be shown by a

Inward shift of the production possibility frontier

The cost of postponing the Tokyo Olympics to 2021 in the week of the COVID-19 virus outbreak ________an opportunity cost of hosting the 2020 Olympic Games _______

Is; if the cost of postponing the Tokyo games would not occur unless Tokyo was hosting the 2020 Olympic Games

A decrease in efficiency means that an economy has

Made more people worse off without making others better off

Buying locally sourced vegetables from community growers, benefits, the entire community, because

One's persons local spending will increase another local persons income

During the coronavirus pandemic of 2020 consumers and producers in the United States, dramatically reduce, are spending relative to the quantity of goods and services available at the time. Which economic principle does the statement best represent

Overall spending sometimes gets out of line with the economy's productive capacity

Suppose China reduces trade barriers that allow its citizens to import more products from Europe and with lower taxes/ tariffs. As a result

The Chinese yuan will depreciate against the Euro

How will an interest rate increase in the United States affect equilibrium in the foreign exchange market?

The US dollar will appreciate, and the equilibrium quantity of dollars traded cannot be determined.

How will an interest rate decrease in the United States affect equilibrium in the foreign exchange​ market?

The US dollar will depreciate, and the equilibrium quantity of dollars traded cannot be determined

Suppose Pennsylvania produces only steel and barley with fixed amount of land, labor, and capital resources. Which scenario best set the stage for economic growth?

The percentage of Pennsylvania residents with the university degree rises from 15% of 23%

Suppose there is a decrease in interest rates in Europe and Japan, but the decrease in interest rates is smaller in Japan. Which of the following would happen in the foreign exchange market between Euros and Japanese Yen as a result?

There will be an increase in demand for Japanese

Suppose there is an increase in interest rates in Europe and Japan, but the increase in interest rates is greater in Japan. Which of the following would happen in the foreign exchange market between Euros and Japanese Yen as a result?

There will be an increase in demand for Japanese Yes and a decrease in demand for Euros

Ralph is offered a free ticket to a Yankees game -a ticket he cannot resell. His opportunity cost of going to the baseball game is.

Whatever Ralph would have done had he not gone to the game

Emma spends 40,000 for one year's tuition at University. The opportunity cost of one year at university for Emma is.

Whatever she would have purchased with the 40,000+ whatever she would have earned had she not attended university

If the price is above the equilibrium price, then

a surplus exists

In much of the country, car owners choose to operate their vehicles using gasoline or electricity, both of which are normal goods. Which factor would cause an increase in the demand for gasoline?

an increase in consumer incomes

A technological improvement has been developed in the production of mangos. At the same time, scientists have discovered that mangos have significant health benefits. This will result in

an increase in the equilibrium quantity, and an uncertain effect on the equilibrium price of mangos.

If people demand more Netflix subscriptions when the price of Hulu subscriptions falls, then Netflix and Hulu are

complements

Suppose a new technological improvement lowers the cost of producing guava candy. At the same time, the preference for guava candy decreases. The equilibrium quantity of guava candy will

increase, decrease, or stay the same depending on the relative magnitudes of the shifts of the demand and supply curves.

An increase in demand and an increase in supply will lead to a ____ in the equilibrium quantity and a ____ in the equilibrium price.

increase; indeterminate change

If the market for bison meat is in equilibrium, the price of bison meat will probably ____ in the near future

not change

If the production possibility frontier is a straight line

opportunity costs are constant

If the economy booms and people's income rise, then the demand curve for a normal good like a new automobile will ____, and the equilibrium quantity of new automobiles produced will _____

shift the the right; increase

In the market for barley, if the price of ethanol (which is made from corn, a crop that competes with barley for farmland) increases dramatically; the ____ barley would _____

supply of; decrease

You notice that the price of computers has risen and that the quantity of computers sold decreased. These observations suggest that the ____ curve for computers has shifted to the ____

supply; left

Suppose Euro-area countries reduce trade barriers that allow its citizens to import more products from China and with lower taxes/tariffs. As a result

the Chinese yuan will appreciate against the Euro

Suppose the incomes rise in Europe, but there is no change in incomes in the United States. As a result, Europeans demand more products produced in the United States and in Europe. As a result.

the Euro will depreciate relative to the US dollar.

Suppose incomes rise in the United States, but do not change in Europe. As a result, Americans demand more products produced in the United States and in Europe. As a result.

the US dollar will depreciate relative to the Euro

Excess demand will exist if

the price is below the equilibrium price

Suppose there is an excess supply of qualified architects in the United States, overtime, we would expect

the salaries of architects to fall