Eco Midterm 2018

Jason purchased a new printer for $150 although he was willing to pay $175. The minimum price acceptable to the seller, Jasmine, was $145. The results of this transaction area consumer surplus of:

$25 and a producer surplus pf $5

Jackie finds a pair of jeans that she likes but the price tag is missing. She us willing to buy it as long as its not more than $100. The cashier informs Jackie that the price is $72. Jackie buys the jeans, and therefore achieved a consumer surplus of:

$28, the difference between what she was willing to pay and the price

When a recession gets under way:

firms start to lay off workers to reduce costs.

Another way of referring to a market economy is as a:

price system

Suppose that a customer's willingness to pay for a product is $5, and the seller's willingness to sell is $4. If the negotiated price is $3, how much is the consumer surplus?

$2

If the price index is 200, how much did a $12 pizza (today) cost in the base year?

$6.00

If real GDP increased from $10billion to $11billion from the first quarter of 2016 to the first quarter of 2017, but had increased by 4% from the fourth quarter of 2016 to the first quarter of 2017, the BEA would report first quarter of 2017 GDP growth as _____ using the year-over-year method and _____ using the annualised method.

10%; 16%

Suppose of a market basket of goods costs $10,000 in 2009, the base period, and that same basket of goods now costs $11,200. What is the consumer price index for the current period?

112.0

Which statement is TRUE about markets?

They can contain legal or illegal activity conducted by any individual or business

If a country's population increases at a slower rate than the growth in its real GDP:

GDP per capita has increased

Which headline would be LEAST likely to be studied in macroeconomics?

GM expands car sales in China

Which statement about short-run economic growth is NOT true?

It is likely to occur when obstacles preventing resources from being used are put in place.

Which of the following persons is considered part of the labour force>

Joe, a senior in high school who works part-time on weekends at the ice cream shop

Which of the following is a part of a planned economy?

Most of the productive resources are owned by the state

In the market economy, the primary channel through which buyers and sellers communicate with each other is:

Price

Which of the following is included in the consumer price index?

Price of gasoline

Which statement is NOT true when a market is in equilibrium?

Sellers have enough inventory to satisfy all buyers and some left over for future demand

Which of the following statements does NOT describe a problem in measuring the consumer price index (CPI)?

The CPI includes new products in its basket

The Leading Economic Index is produced by:

The Conference Board

Which of the following is NOT true?

The consumer price index is a cost-of-living index.

One of the most important ingredients in bubble tea is the tapioca pearls that are added to the tea. If the price of tapioca flour increase, what will happen to the supply of the bubble tea, all else being equal?

The supply of bubble tea will decrease.

Which is NOT a basic economic question that societies must answer?

Why are these goods and services being produced?

A business cycle recovery that doesn't reach its long-term trend can lead to:

a double-sip recession

Trade is:

a driver of economic growth

The National Bureau of Economic Research is:

a nonprofit research organisation that dates business cycles in the United States

Which of the following reasons does not contribute to a higher level of unemployment?

a reduction in union bargaining activites

Which policy is MOST likely to contribute to improved standards of living over time?

adding after-school art and music programs to promote creativity

The official unemployment rate as commonly reported by the Department of Labour each month does not include people who:

are underemployed

The idea that all the income ultimately goes to households, which then use it to buy goods and services from firms, is a central idea of the the:

circular flow diagram

Macroeconomics focuses on:

decisions affecting the entire economy

Simon Kuznets:

devised the gross national product as a way of measuring a nation's economic output.

Willingness to pay ______ from person to person and ______ under varying circumstances.

differs; differs

We should most likely expect a recession if the Leading Economic Index:

falls for three months in a row

Inflation is a:

general rise in prices

In a communist state, the _______ decide(s) what a society wants, but in a capitalist economy, the ______ decide what products they want.

government; consumers

Paying a salesperson more for increased sales is an example of:

incentive

In the national income and product accounts system, the two main approaches to measuring the size of the economy are:

income and expenditure

An economic recovery that produces top few jobs to significantly reduce the unemployment rate is know as a(n):

jobless recovery

Which of the following is NOT an example of an intellectual property right?

land deed

Physical capital includes:

manufactured products that are used to produce other goods and services

Consumer surplus is the difference between the:

maximum price the buyer is willing to pay and the market price

In the circular flow diagram, the counterclockwise direction shows the flow of _____, where households supply and businesses supply______.

money; labour; goods and services

IKEA produces desks that are made in Poland. The value of these imported desks sold at an IKEA store in the USA counts toward:

neither GDP nor GNP

A market exists when:

people exchange money for goods and services

Economics is BEST defined as the study of how:

people make rational decisions

When an economy uses the most efficient means of farming to grow as much corn as possible, this economy has achieved:

production efficiency but not necessarily allocative efficiency

To avoid double-counting output in GDP measures, ______ are excluded in GDP

raw materials

In the market for online tutoring, there is an increase in the supply of online tutors during finals week, but there is an even larger increase in the demand for online tutors. These events will cause the equilibrium price of online tutoring to ____ and equilibrium quantity to _____.

rise; rise

Frictional unemployment is:

short-term unemployment associated with people who are switching jobs.

GDP can be found either by adding up all of the _____ or all of the ______ in the economy.

spending; income

Which of the following occurrences is the key explanation for the high economic growth in the United States in the past century?

technology improvements

Human capital includes:

the improvements to labour capabilities from training, education, and apprenticeship programs.

In which market is government most likely to intervene to prevent a market failure?

the market for college education

In a market-based economy, scarce resources are allocated by:

the price system

Tim woke up this morning with a stomachache and decided to skip class in order to get more rest. What is the opportunity cost of Tim's decision to sleep in?

the value of attending the class he decided to miss

Which of the following is NOT an effective tool used by government to promote economic growth?

trade barriers to protect domestic industries

Unemployment tends to be highest during the _____ stage of the business cycle while there is a greater risk of high demand leading to inflation during the ____ stage of the business cycle.

trough; peak

Macroeconomics is concerned with issues such as:

unemployment

Business cycles:

vary in duration and magnitude

Because of scarcity:

we face tradeoffs in nearly every choice we make

Microeconomics is concerned with issues such as:

which job to take

Reasons to study economics include all of these EXCEPT that you:

will learn exactly how to invest your cash short term for the highest return on investment