Study chapters 1-6
We have the following information for the economy of Machinland for the year 2009. All data are in billion dollars.
$1,230,00 billion $1,131,60 billion
PC Bell, a computer manufacturer that sells computer systems directly to customers, buys a computer chip for $99 software for$300and a printer for $50 .If the value added by PC Bell from selling this system (including the printer and the software) is $1 comma 400 ,what is the price at which the system is sol
$1,849
The following data on capital stock (plant, equipment, housing and inventory) are available for the Republic of Capita for the year of 2009.Stock of capital on January 1, 2009:$12,000 billion. Stock of capital on December 31, 2009: $12 comma 750 billion From this one can conclude that in 2009, the level of net investment?
$900 billion
The following national income accounting data for the year 2009 are available for a country. All data are in billion dollars. for this country, GDPbillion and Final Sales = $ 10,000.00 billion.
1) $9,975.00 2)10,000.00 billion
the diagram to the right illustrates the supply curve for hot dogs by Frank's Frankfurters, a local hot dog producer. Calculate the dollar value of producer surplus if equilibrium price is $0.20 per doze
1) 1 million hot dogs per month
Consumer sovereignty is more likely to be observed in what type of economic system? Free enterprise is more likely to be observed in what type of economic system?
1) A mixed system 2) A mixed system
For each of the following situations, identify the full cost (opportunity cost) involved: 1)Monique quits her $60 comma 000per-year job as an accountant to become a full-time volunteer at a women's shelter. 2)he Agrizone Corporation invests $14.0million in a new inventory tracking system 3)Taylor receives $500from his grandmother for his birthday and uses it all to buy shares of stock in Harley-Davidson, Inc. 4)Hector decides to spend the summer backpacking across Europe after he graduates from Yale ColumbiaUniversity. 5)After receiving her master's degree, Molly chooses to enter the doctoral program in Political Scienceat the University of Texas 6)Sanjay chooses to use his vacation time to paint the exterior of his house 7)After a night of karaoke, Tiffany forgets to set her alarm and sleeps through her Calculus final exam
1) All of the above 2)he opportunity cost of investing in a new inventory tracking system is any other projects Agrizone could have invested in. 3)A and B only 4)All of the above. 5)he opportunity cost of entering a doctoral program is the time Molly could have spent on other activities 6)all of the above 7)he opportunity cost of Tiffany's decision is a better grade on the exam
During a recession,output unemployment, and employment
1) Falls, Increases, Falls
Government policies that deal with taxes and spending are known aswhile other policies dealing with the control of the nation's short-terminterest rates are called
1) Fiscal Policy 2) Monetary Policy
Classical economists believed that unemployment would not persist because prices and wages are flexible , while Keynesians believe that they are sticky , therefore unemployment will persist without government intervention to spur aggregate demand.
1) Flexible 2) Sticky
The market for lobster is shown in the diagram to the right. Assume that in 2011, 15,000 square miles of lobstering waters off the coast of Maine were closed. 1.) Using the line drawing tool, illustrate the effects of the closure. Properly label this line. 2.) Using the point drawing tool, identify the new equilibrium. Label this point 'B'.Part 2Carefully follow the instructions above and only draw the required objects. Part 3After the closure of the lobstering waters, at the original equilibrium price of $5.00 per pound, quantity supplied is less than quantity demanded. Part 4This shortage is eliminated as prices rise .
1) Less than 2) shortage 3)Rise
With increased access to wireless technology and lighter weight, the demand for tablet computers has increased substantially. Tablets have also become easier and cheaper to produce as new technology becomes available.When consumers purchase tablet computers, the interaction and exchange occurs in themarket, while the resources used to produce the tablets are bought and sold in
1) Product 2) Factor
the economy of Tuland produces only two products fish and calculators. The following information is available for production and prices of Tuland's products for the years 2009 and 2010
1)3000.00 2)330.00 3)3570.00 4)3946.50 5)10.55% 6)11.00% 7)10.77%
How many inches are in one foot?
12
Every Friday night, Gustavo pays $39.99to eat nothing but crab legs at the all-you-can-eat seafood buffet at the M Resort in Las Vegas. On average, he consumes 20crab legs each Friday.
2.00- the avarage cost $2- the marginal cost
The following equations describe the supply and demand for crude oil in the United States in the mid-1980s: Upper Q Subscript s=minus2 (1/2)PUpper Q Subscript d=15minus (1/4)Pwhere price is giv
8.75
The following national income accounting data for the year 2009 are available for a country. All data are in billion dollars.
9,040.00 9,000.00
The fundamental decision-making units in a market economy are:
A AND B ONLY
In order for an economy to be successful, there must be some form of organization. Firms produce products that are marketed and sold. There must be people who desire to purchase and consume the products that are produced by the firms. This group of individuals that consumes the products that are produced in a market economy are known as households . Which of the following is true in a market economy?
A household demands goods and services from the market and supplies factor inputs
The condition that exists when quantity supplied exceeds quantity demanded at the current price is:
A surplus or excess supply
is an organization that transforms resources into products.
A) A FIRM B) Are the primary producing units in a market economy
Which of the following is a reason to study economics?
All of the above
A person who organizes, manages, and assumes the risks of a firm, taking a new idea or a new product and turning it into a successful business is known as
An Entrepreneur
The diagram to the right illustrates a demand curve . Economists have learned the most important factor in determining an individual's demand for a single product is the relationship between price and quantity demanded . The demand curve depicts the specific relationship between price and quantity demanded. This is known as the law of demand. How do economists define the law of demand?
A negative, or inverse, relationship between quantity demanded and price
Short-run fluctuations of an economy are called
Business cycle
Which field of economics deals primarily with the problems faced by low-income countries?
Economic development
"In general, profit opportunities are rare. At any time, many people are searching for them, and as a consequence, few exist
Efficient Market
On a time series graph, time is measured along the vertical scale
False
During the 1960's, many economists believed that the government could regulate both unemployment and inflation atthe same time. This is known asthe macroeconomy.
Fine-Tuning
What two important functions does a market system perform?
It provides an automatic mechanism for distributing scarce goods and services and determines both the allocation of resources among producers and the final mix of outputs
Much of modern macroeconomics has roots in the works of
John Maynard Keynes
Consumer surplus:
is the difference between the maximum amount a person is willing to pay for ag good and its current market price
When considering the circular flow of economic activity, households supply resources (inputs) such that the resources supplied by the households may be thought of as being provided in individual markets.
In the labor market, households earn wages by supplying labor to firms that demand it.
What is the primary difference between income and wealth?
Income is a flow variable; wealth is a stock variable
A World Bank brief entitled Natural Capital Accounting contains the following statement: "(A) major limitation of GDP is the limited representation of natural capital. The full contribution of natural capital like forests, wetlands, and agricultural land does not show up."
Increase Do not increase or decrease
During the late eighteenth and early nineteenth centuries, increases in the productivity of agriculture, new manufacturing technologies, and the development of more efficient modes of transportation led many people in England to move from the countryside to the city.This period of massive economic change is generally referred to as the
Industrial revolution
The term 'stagflation' was created in the 1970's to describe an economy experiencing both
Inflation and economic stagnation
There are three important properties to remember about demand curves . Describe these properties
It has a negative slope, which intersects the X, or quantity, axis, and intersects the Y, or price, axis
The field of economics that deals primarily with the factors that determine wage rates, employment, and unemployment is called:
Labor economics
Which of the following statements uses the concept of equity to argue against the legalization of casino gambling? Part 2
Legalized casino gambling places an unfair burden on nongamblers, who must now tolerate the increased traffic that the activity necessarily produces.
A formal statement of theory, usually a mathematical statement of a presumed relationship is called a MODEL . A VARIABLE can change over time or across observations. between two or more variables, is called
MODEL, VARIABLE, C- It allows researcher to isolate the effect of one event on another without the influence of outside variables
Which of the following describes the economic system in the United States?
mixed economy
W hen words are insufficient to explain the quantitative relationship between two variables (i.e., stimulus and response, cause and effect), economists often use Mathematical equations This quantitative relationship between variables can also be presented using graphs
Mathematical equations & Graphs
Determine whether each of the following is covered by microeconomics or macroeconomics.
Microeconomics, Macroeconomics ,Microeconomics, Macroeconomics
Your college bookstore receives a shipment of new economics texts for $60,000. This transaction is
Not included in GDP calculation, since books bought by the bookstore are intermediate goods.
When a price ceiling is imposed, the price system is prohibited from rationing the product in the market in which the ceiling was imposed. What other alternative rationing methods are available to determine who receives the scarce commodity?
Queuing, favoring customers, and ration coupons
he Economics in Practice describes prosperity and recession as they are depicted in literature. In mid-2009, there was a debate about whether the U.S. economy had entered an economic expansion. Look at the data on real GDP growth and unemployment and describe the pattern since 2007. The debate about whether the U.S. economy had entered an economic expansion in mid-2009 occurred because there was a
a) Drop in employment but a rise in real GDP
The process of converting inputs into useful output is called production . These inputs are also known as the factors of production . Part 2 Which of the following is not included in this list of inputs?
a) Production b) the factors of production c) Energy
What is the opportunity cost of spending 2 hours studying for a biology exam?
Time spent studying for one of your other classes
When graphing two variables, if the line slopes upward as you move from left to right then the variables exhibit a positive relationship
True
Toyota, a Japan-based company manufactures a Camry automobile in Kentucky, USA and sells it in Japan. This transaction is included in
U.S. GDP under exports
If price is increasing as quantity increases, the slope of the line representing different prices and their corresponding quantities will be positive. If the value of X changes from 16 to 24 when the value of Y changes from 12 to 8, the slope of the line between those two points is
a) True B) -0.5
When graphing two variables, the point at which the graph intersects the horizontal axis is called the
X-intercept.
The diagram to the right illustrates a supply curve. The development of the supply curve will be studied when you know a little more about costs. For now, assume that as price increases, revenues increase, and, ceteris paribus, profits rise. Therefore, firms will supply a greater quantity. The supply curve depicts the specific relationship between price and quantity supplied, known as the law of supply. How do economists define the law of supply?
a POSITIVE relationship between Quantity supplied and price
Deflation is a phenomenon that describes
a decrease in the overall price level
Since 1970, the longest recession in the United States began in Since 1970, the highest unemployment rate in the United States occurred during the recession that began in
a) 1980 b)1980
Problem statement: right arrowThe line labeled D1in the graph to the right shows the number of cups of lemonade that Caroline and Emily can sell at their lemonade stand at various prices. Caroline and Emily have noticed that they sell more lemonade when it's hotter.lick anywhere on the graph to open a window with a control labeled Temperature. If you use the slider to change the temperature, the line will shift. Change the temperature from 80 degrees to 90degrees.At a price of $0.50, how many more or fewer cups of lemonade do Caroline and Emily sell when the temperature is 90degrees than when the temperature is 80 degrees?
a) 5
There are 8 innings in a typical baseball game. The sun revolves around the earth. 3x(4+1)=15
a) 9 b) False c)15
Macroeconomists tend to combine many markets into one. For example, the behavior of all households and firms together is called
aggregate behavior
Consider the following statement: "Statistics tell us that ice cream sales increase during the summer months. It is also the case that reported burglaries increase during the same period. We can conclude, therefore, that increased ice cream sales cause an increase in burglaries. The conclusion of this statement:
falls victim to "post hoc, ergo propter hoc."
Ford Motor Co. produces a Focus automobile in its factory in Germany and sells it in India. This transaction is added to
german GSP under exports
In the circular flow of economic activity, there are two kinds of markets in which firms and households interact. In the product market
goods or services are exchanged
The fundamental difference between microeconomics and macroeconomics is that microeconomics analyzes the decisions made by HOUSEHOLD AND FIRMS while macroeconomics deals primarily with
hOUSEHOLD AND FIRMS & the Economy as a whole
Transfer payments are not included in GDP calculation because these are
income received, but not as payment for providing current goods and services
In the base year , nominal GDP
is always equal to real GDP
Producer surplus:
is the difference between the current market price and the cost of production for the firm.
To fund its budget deficit, the government can borrow by
selling treasury bills to the public
A circular flow diagram shows
the income received and payments made by each sector of the economy, firms, households, government, and the rest of the world
In the circular flow of economic activity, there are two kinds of markets in which firms and households interact. In the factor market:
the resources used to produce goods and services are exchanged
An economic system is a social system in which
the three basic economic questions are addressed
One reason why GDP is not a good measure of national well-being is that it fails to take into account
value of leisure
In a laissez-faire economic system:
government's role is limited to protecting and enforcing property rights and providing public goods.
