Test 1 Macro
base on the Ivan example; his marginal benefit is __ and his marginal cost is __
$20 and $25
suppose that sam's club buys a pound of prime cut filet mignon from a local rancher at $10 per pound. The manager of a local restaurant, Sycamore, buys the filet at $15 per pound for sam's club to serve in his restaurant. his restaurant serves a pound of the filet for $25 as a valentine's day special. how much do these economic activities contributed to GDP in a given time period?
$25
the value of each automobile in gross domestic product equals
$25,000
the value added by the auto manufacturer equals
$8000
Suppose that a small country, party-land, produces only pom-pons and margaritas and their quantities and prices are shown in the table for the years 2011 and 2012. Base year is 2011. Nominal GDP in 2012 is __. Real GDP in 2012 is __.
(7 x 6500) + (5 x 3000); (8 x 6500) + (10 x 3000)
suppose in mizzou land the frictional unemployment rate is 4%, the structural unemployment rate is 2% and the cyclical unemployment rate is 4%. The unemployment rate is__ and the natural rate of employment is__ in mizzou land.
10%; 6%
suppose in Mizzou land the frictional unemployment rate is 2.5%, the structural unemployment rate is 3%, the cyclical unemployment rate is 4%,and the seasonal unemployment rate is 1.5%. The unemployment rate is __ and the natural unemployment is __ in Mizzou land.
11%; 7%
in the land of macrolovers, using prices of 2009, GDP in 2009 was $200 and GDP in 2010 was $240. using priced of 2012, GDP was $300 and GDP in 2010 was $330. The bureau of economic analysis of the land of macrolovers will calculate __ percent as the growth in real GDP between those years.
15
Suppose that the population of the US grows by 3.5 percent and its real GDP grows by 2.4 percent from last to this year. The change in the standard of living in the US measured by growth in real GDP per person, must be changed by:
2.4 - 3.5 = -1.1 percent
The opportunity cost of producing 1 ton of pineapples in Costa Rica is __ and in Guatemala is __. __ has a comparative advantage in the production of pineapples and __ has a comparative advantage in the production of coconuts.
3/2 tons of coconuts 2 tons of coconuts; Costa Rica Guatemala
Scenerio: Ivan bought a jewelry store. He is deciding how long to stay open. With a wage rate of $25/hour. How many hours should the store stay open?
5 hours
Suppose that in 1980 an Apple Computer was sold for $4000 and a bottle of vodka was sold for $10. Today, an identical Apple Computer sells for $1000 whereas the bottle of vodka is sold for $20. We are therefore able to conclude that the relative price of an Apple Computer
Has decreased from 400 bottles of vodka to 50 bottles of vodka
The US has experienced __ due to an increase in the average education level of US workers. In addition, the US has experienced __ as a result of discovery of crude oil in Alaska.
Intensive growth; extensive growth
Which of the following transactions would take place in the "underground economy"?
Jordan makes chain-link and necklaces and sells them at a local flea market for cash to avoid paying taxes.
suppose that the figure below represents the production possibilities frontier in the U.S. In what way could point A be considered more economically efficient than point B?
Point A could be considered more economically efficient than point B if it represents a combination of automobiles and computers that US consumers would prefer. (the higher on up on the curve that more efficient)
In cities with rent control, people have an incentive to list their apartments on sites such as Airbnb at rents__ the controlled rates, because rent control causes a __ of apartments.
above; shortage
GDP may understate the economy's welfare because GDP does not account for the:
amount of leisure increasing
which is the following in incorrect according to the lecture or text?
an efficient tax is a tax that imposes an equal tax burden on buyers and sellers
Farmers can raise either llamas or sheep on their land. Which of the following would cause the supply of llamas to decrease?
an increase in the price of sheep
which of the following countries does not come close to the free market benchmark?
cuba
In the first half of 2011, automobile sales in the United States were lower than they were in the first half of 2010. The decrease in the auto sales impacts GDP because new automobiles are counted as __ when purchased by households and __ when purchased by business.
durable good consumption expenditure; investment expenditure
Suppose that two events occur simultaneously in the market for health care, a normal good: 1) a dramatic improvement in medical imaging technology and 2) the economy enters a recession (which decreases consumers income). An economist would predict with certainty that
equilibrium price will fall
Marla is an architect who is designing a home for Chuck. Chuck is paying Marla $150 per hour to design his new home. When Chuck and Marla get married, Marla continues to work on designing the home, but she no longer Chuck for her work. As a result, GDP__ because __.
falls; Marla's architectural design services are no longer bought by Chuck once they're married
which of the following is false according to lecture or text?
for developing countries like the unites states, GDP will always exceed GNP
blake just told his boss that he things his boss is an idiot. it is likely that blake will experiencing __ unemployment in the near future
frictional
which of the following is not considered a cost of unemployment?
higher inflation rates
which of the following is false according to lecture or/and the text?
if the federal government implements programs so that the unemployment are more quickly matched with jobs, then the natural rate of unemployment will increase
As job opportunities for women and the wages those jobs pay have increased, the opportunity cost of doing housework has __, so many families have chosen to hire specialists in households chores, such as cleaning services and lawn care services, because the cost of these specialists is __ than the cost of the wife performing those chores.
increased; lower
The U.S. has experienced __ due to increase in the productivity of US workers and __ due to an increase in new immigrant workers.
intensive growth; extensive growth
overtime worked by a Macy's associate is considered__, a factor of production, and she earns for her hours of work and effort
labor; wages
__ unemployment benefits __ the opportunity cost of not working, so some job seekers may decide to __ their job searches
lower, raise, increase
which of the following is false about rational choice as discussed in lecture?
no one makes a rational choice since everyone makes mistakes and regrets things they have done
assuming that every in the question below is in the adult population, which of the following is an example of a worker experiencing cyclical unemployment
paul, a freightliner employee, who got laid off because of the recession of 2007-2009
Which of the following is an example in the category of "Not in the labor force"?
pierce, an 18 year old full-time student at MU, who is not looking for a job and Ashlie, a 32 year old daycare provider, who quits her job to go back to school to pursue a nursing degree
Dummas really values getting a good night's rest. In fact, he values it so much that he rarely shows up to his 9:30am Economics lecture on time. One day, at the end of class, Professor Lee announces that she will begin deducting one percentage point from a student's final grade for every minute that they are late to class. Dummas never comes late to another class. Dummas most likely started coming to class on time because:
professor lee greatly increased the marginal cost of being late
which of the following is the best indicator of the standard of living?
real GDP per capita
many firms pay their workers efficiency wages (wages above the equilibrium level) to :
recruitment highly productive workers and encourage greater worker productivity
According to lecture, laws, customs, conventions,and other institutional element that sustain an economy fall under the category of
rules of the game
suppose that the economy of sparta is operating at full employment. this would mean that:
some unemployment may exist but that economy of sparta is healthy and producing its potential level of output
a lumber jack loses his job because timber cutting restrictions were imposed by the EPA to protect the spotted owl habitat. This lumberjack would be considered as __. By offering training to workers whose firms laid them off because of competition from foreign firms, the federal government is attempting to reduce__
structurally unemployed; structural unemployment
which of the following would cause GDP to overstate the economy's welfare?
the amount of leisure decreases
Which of the following is correct according to the lecture or text?
the cost of unemployment could include a loss of income and a loss of human capital
Increases in the minimum wage are intended to raise the incomes of low skilled and uneducated workers. Many economists favor a different policy to achieve this goal, a policy that avoids the deadweight losses that result from the minimum wage. Which of the following is an example of such policy?
the earned income tax credit
suppose the unemployment rate goes down, which of the following would be a reason to not interpret this as good news?
the number of underemployed workers increases
suppose that Sang-ha sells a house he has owned for 15 years. to make it more marketable, he buys carpeting and has it professionally installed, and buys wallpaper that he hangs himself. which items would be included in this year's GDP?
the sale price of the wallpaper and carpeting and the installation fee for the carpet
which of the following is the best example of an intermediate good?
the steel used to make refrigerators
According to a recent study, "stricter college alcohol policies, such as imposing severe sanctions for drinking in dormitories or banning alcohol on campus, decrease the number of students who use marijuana." On the basis of this information, how would you describe the relationship between alcohol and marijuana?
the two goods are complements in consumption
which of the following groups is included in the labor force?
the unemployed
Which of the following items is not counted as part of government purchases?
the unemployment insurance benefit paid to Hillary's sister, who lost her job as secretary.
Suppose that two events occur simultaneously in the labor market for news journalists: 1) a dramatic improvement in internet technology enables more people to report new form anywhere in the world and 2) the cost of hiring either part or full time journalists dramatically rises due to the health insurance mandate. An economist would predict with certainty that
the wage for journalists will fall
Which of the following is a reason why government is a participant in a market-oriented economy?
to enforce contracts and to protect private property rights
caleb is a painter. four months ago, caleb lost his job with certa pro, a national painting franchise. during this unemployment spell, caleb actively searched for work, but recently took a job that paid cast "under the table" while he continued to search and collect unemployment payments. caleb would be considered __ by the bureau of labor statistics, but this would cause the officially reported unemployment rate to__ the true unemployment rate.
unemployed, overestimated
according to text or lecture, which of the following is incorrect?
unemployment and inflation are not related
which of the following transactions would be included in the official calculation of GDP?
your mother buys a brand new Singer sewing machine to make a quilt for you brother
Assume that prior to specialization and trade, Costa Rica produced the combination of 50 tons of pineapples and 75 tons of coconuts and Guatemala produced the combination of 45 tons pineapples and 90 tons of coconuts. If these two nations now specialize completely in accordance with comparative advantage, the total gains from trade specialization and the trade will be:
5 tons of pineapple and 15 tons of coconuts.
In a small country, using prices of 2012, GDP in 2012 was $200 and GDP in 2013 was $210. Using prices of 2013, GDP in 2012 was $300 and GDP in 2013 was $330. The country's BEA will calculate __ percent as the growth in real GDP between those years.
7.5
According to the Theory of Specialization and Trade, which of the following would be feasible terms for trade between Costa Rica and Guatemala?
7/4 tons of Coconuts
suppose the total population of the land of "dumb and dumber" equals 30000; the civilian non-institutional population equals 15000; there are 7000 employed persons and 1000 unemployment persons. How many people are considered "not in the labor force"?
7000
Madison likes making pizzas and has a budget of $200 to spend on food each month. When the price of pizza rises she buys fewer pizzas. Which of the following best describes her behavior?
All are correct Madison buys fewer pizzas because a rise in the price of pizzas has increased the opportunity cost of consuming it. Thus, Madison is likely to substitute another good for pizzas. Law of Demand describes. Madison buys fewer pizzas because she can't afford to buy the same quantity of pizzas anymore due to a decrease in the purchasing power of her income.
which of the rolling is the best indicator of the standard of living?
Read GDP per capita
Suppose that millions of illegal immigrants from Mexico enter the United States. This has reduced the supply of unskilled labor in Mexico and increased the supply of unskilled labor in the United States. Assume that the demands for labor in Mexico and the United States are unchanged. As a result, the wages of unskilled laborers in Mexico must __ and the wages of unskilled laborers in the Unites States must__
Rise; fall
Scott likes hotdogs. He has a budget of $100 to spend on food each month. When the price of hotdogs rises he buys fewer hotdogs. Which of the following best describes his behavior?
Scott buys fewer hotdogs because a rise in the price of hotdogs has increased the opportunity cost of consuming it. Thus, Scott is likely to substitute another good for hotdogs. Law of demand describes this. Scott buys fewer hotdogs because he can't afford to buy the same quantity of hotdogs anymore due to a decrease in the purchasing power of his income.
After taken econ 1015 from Dr. Lee, Madeleine, a US citizen, decides to learn about S. Korea by participating in the study abroad program during her sophomore year of college. She transfers to Korea University, a sister school in Seoul. While there, Madeleine acquires a right to work permit and starts teaching English to Koreans in the Social Welfare Center in Seoul for some extra spending money. We know that Madeleine is contributing to the GNP of and the GDP of
The US; S Korea
In February, market analysts predict that the price of titanium will fall in March. What happens in the titanium market in February, holding everything else constant?
The supply curve shifts to the right and the demand curve shifts to the left.
when a us citizen buys a bottle of Chardonnay made in South Africa for $6, what will happen to US GDP?
US consumption increases by $6, US net exports decrease by $6, and US GDP does not change
Production by Stihl, a German manufacturer of chainsaws and other handheld power equipment, in Virginia in the United States, is included in __ GDP and production Starbuck Corporation, a US firm, in Tokyo Japan is included in __ GDP
US; Japanses
Figure below shows various points on three different production possibilities frontiers for a nation. A movement from __ could occur because of an influx of immigrant labor. A movement from __ is the result of advancements in plastic production technology.
X to Y; Y to Z
suppose sophia gives up a $50000 per year job to stay at home to take care of her garden and the house. By doing so, Sophia saves $20000 in lawn care and house cleaning services which she now performs herself. The effect of her decision on GDP is
a decrease of $70000
which of the following is a positive statement?
a dramatic improvement in tracking technology to extrude crude oil and natural gas has led to decreases in the price of crude oil and natural gas
Which of the following is a factor of production?
a janitor hired by columbia public library
Hurricane Katrina damaged a large portion of refining and pipeline capacity when it swept through the Gulf coast states in August 2005. As a result of this, many gasoline distributors were not able to maintain normal deliveries. In order to protect consumers, the price of gasoline was regulated by the government at the pre-hurricane equilibrium price. We would expect to see:
a shortage of gasoline
which of the following is true according to lecture and the text?
because of activity in the underground or "shadow" economy, GDP statistics understate the true volume of economic activity
It is observed that consumers buy more Sushi on Saturdays when there is "Ladies night" special of 1/2 price on all drinks at the local restaurant, Geisha. Given the ceteris paribus assumption, you conclude that drinks and sushi are:
complements