ECO2201: Unit 1

_________ are now the largest single component of the supply side of GDP, representing over half of GDP.

Services

How do apple growers react to the news of medical research findings that suggest that eating apples leads to greater health benefits than were previously known?

They increase the quantity of apples supplied.

The opportunity cost of attending university is likely to include all except which of the following? Select one: a. the cost of haircuts received during the school term b. the income you forgo in order to attend classes c. tuition fees d. the cost of required textbooks

a. the cost of haircuts received during the school term

Increased education adds to the stock of human capital, not unlike building factories adds to the stock of physical capital.

high rate of economic growth.

Which of the government policies below is most unlikely to encourage per capita economic growth? a.high taxes on companies that spend a lot on capital formation b.the use of tax revenues for investment and capital formation c.special subsidies for capital-intensive forms of production d.promotion of education and training programs for workers

high taxes on companies that spend a lot on capital formation

(Price) D1 D2 S1 S2 $12 5 9 19 14 $10 8 12 17 12 $8 11 15 15 10 $6 13 18 13 8 $4 16 21 11 6 $2 18 24 9 4 Refer to Table 4-1. If D2 and S2 represent the demand and supply schedules in a particular market, then the equilibrium price and quantity are __________ and __________, respectively.

$10; 12

GDP in the United States in 2012 was about __________. a.$162 billion b.$16.2 trillion c.$162 trillion d.$1.62 trillion

$16.2 trillion

(Price) D1 D2 S1 S2 $12 5 9 19 14 $10 8 12 17 12 $8 11 15 15 10 $6 13 18 13 8 $4 16 21 11 6 $2 18 24 9 4 Refer to Table 4-1. If D1 and S1 represent the demand and supply schedules in a particular market, then the equilibrium price and quantity are __________ and __________, respectively. a. $6; 13 b. $8; 15 c. $4; 16 d. $4; 11

$4; 16

Middle-income countries, which include much of Latin America, Eastern Europe, and some countries in East Asia, have per capita GDP in the range of ___________. a.$6,000 to $12,000 b.$600 to $1200 c.$60,000 to $120,000 d.$60 to $120

$6,000 to $12,000

(Price) D1 D2 S1 S2 $12 5 9 19 14 $10 8 12 17 12 $8 11 15 15 10 $6 13 18 13 8 $4 16 21 11 6 $2 18 24 9 4 Refer to Table 4-1. If D2 and S1 represent the demand and supply schedules in a particular market, then the equilibrium price and quantity are __________ and __________, respectively.

$8; 15

The change in inventories, a component of aggregate supply, comprises roughly __________ of GDP. a.0.5% b.20% c.1% d.10%

0.5%

Andy views beer and pizza as complements to one another. If the price of pizza decreases, economists would expect: a.Andy's demand for pizza to decrease. b.Andy's demand for pizza to increase. c.Andy's demand for beer to increase. d.Andy's quantity of pizza demanded to decrease.

Andy's demand for beer to increase.

Which of the following is correct?

Increased education adds to the stock of human capital, not unlike building factories adds to the stock of physical capital.

Which of the following best describes the relationship between economic growth and literacy? a.Increased literacy initially stimulates economic growth by raising labor productivity, but as the economy grows and the opportunity cost of education rises, literacy declines. b.As the economy grows, literacy declines because it becomes less and less useful in a developed economy. c.There is no correlation between economic growth and literacy. d.Increased literacy stimulates economic growth by raising labor productivity, and as the economy grows, people consume more education.

Increased literacy stimulates economic growth by raising labor productivity, and as the economy grows, people consume more education.

Which of the following best describes the relationship between economic growth and literacy? a.Increased literacy initially stimulates economic growth by raising labor productivity, but as the economy grows and the opportunity cost of education rises, literacy declines. b.There is no correlation between economic growth and literacy. c.Increased literacy stimulates economic growth by raising labor productivity, and as the economy grows, people consume more education. d.As the economy grows, literacy declines because it becomes less and less useful in a developed economy.

Increased literacy stimulates economic growth by raising labor productivity, and as the economy grows, people consume more education.

The supply curve of textbooks (which are produced using paper made from trees) will shift to the left in response to:

a sharp increase in the demand for and construction of wood-frame homes.

After widespread press reports about the dangers of contracting "mad cow disease" by consuming beef from Canada, the likely economic effect on the U.S. demand curve for beef from Canada is: a.a shift of the demand curve for beef to the right. b.a shift of the demand curve for beef to the left. c.a movement down along the demand curve for beef to the right. d.no change; only the supply curve for beef is likely to be affected.

a shift of the demand curve for beef to the left.

The imposition of a price ceiling on a market often results in: a.a surplus b.a decrease in discrimination on the part of sellers. c.a shortage d.an increase in investment in the industry.

a shortage

If imports exceed exports, as in recent years, then __________ exists. a.a trade deficit b.a trade surplus c.a trade imbalance d.trade disequilibrium

a trade deficit

(Price) D1 D2 S1 S2 $12 5 9 19 14 $10 8 12 17 12 $8 11 15 15 10 $6 13 18 13 8 $4 16 21 11 6 $2 18 24 9 4 Refer to Table 4-1. If D2 and S2 represent the demand and supply schedules in a particular market, then the equilibrium price and quantity are __________ and __________, respectively.

a. $10; 12

For most high-income countries of the world, GDP _________________ over time. a.has risen gradually b.has declined slightly c.has sharply risen d.has proven to be stable

has risen gradually

For most high-income countries of the world, GDP _________________ over time. a.has risen gradually b.has proven to be stable c.has declined slightly d.has sharply risen

has risen gradually

In the long run, the most important source of increase in a nation's standard of living is a: a.high rate of economic growth. b.high rate of consumption. c.zero rate of population growth d.high rate of labor force growth.

high rate of economic growth.

The "law of supply" functions in labor markets; that is, a higher __________ for labor leads to a higher quantity of labor supplied. a.price b.demand c.supply d.quantity

price

In contrast to goods and services markets, _____________ are rare in labor markets, because rules that prevent people from earning income are not politically popular. a.price ceilings b.living wage laws c.price floors d.minimum wages

price ceilings

______________ are enacted when discontented sellers, feeling that prices are too low, appeal to legislators to keep prices from falling. a.Price ceilings b.Subsidies c.Price floors d.Rent controls

price floors

The downward slope of the demand curve again illustrates the pattern that as _____________ rises, _________________ decreases. a.quantity supplied, quantity demanded b.price, quantity demanded c.quantity demanded, price d.price, quantity supplied

price, quantity demanded

The value of what businesses provide to other businesses is captured in the final products at the end of the __________ chain.

production

Over the long run, ____________ per hour is the most important determinant of the average wage level in any economy. a.dollars b.demand c.productivity d.supply

productivity

The value of what is produced per worker, or per hour worked, is called ____________. a.productivity b.GDP per capita c.economic growth d.human capital

productivity

To achieve a high standard of living, a nation should: a.increase the tax deduction for child dependents. b.increase welfare payments to the poor. c.promote economic growth. d.use less capital and more labor in the production process.

promote economic growth.

A more efficient means of processing algae to produce an anticancer drug is discovered. As a result, the supply curve for the drug will: a.shift to the left, decreasing the price of the drug. b.shift to the right, decreasing the price of the drug c.shift to the left, increasing the price of the drug. d.shift to the right, increasing the price of the drug.

shift to the right, decreasing the price of the drug

Which of the following is not counted as a part of GDP? a.the purchase of 100 shares of AT&T stock by your grandfather. b.the purchase of a snow plough by the city of Minneapolis. c.the unsold additions to inventory at an appliances store d.the purchase of a loaf of bread by a consumer

the purchase of 100 shares of AT&T stock by your grandfather.

Whenever there is a surplus at a particular price, the quantity sold at that price will equal: a.(quantity demanded plus quantity supplied)/2. b.the quantity supplied minus the quantity demanded. c.the quantity supplied at that price. d.the quantity demanded at that price.

the quantity demanded at that price.

According to the law of supply: a.there is a direct relationship between price and quantity demanded. b.there is a direct relationship between price and the quantity supplied. c.there is an inverse relationship between price and the quantity supplied. d.there is an inverse relationship between price and quantity demanded.

there is a direct relationship between price and the quantity supplied.

Refer to Figure 4-1. The movement from __________ to __________ is consistent with a decrease in the price of cotton (a substitute).

Point A; Point H

Any given demand or supply curve is based on the ceteris paribus assumption that ___________________. a.everything is variable. b.all else is held equal c.no one knows which variables will change and which will remain constant. d.what is true for the individual is not necessarily true for the whole.

all else is held equal

In 2010, Americans had about _____________ outstanding in credit card debts not paid on time.

$900 billion

Once every __________, the Census Bureau does a comprehensive survey of housing and residential finance.

10 years

In the United States, a typical credit card interest rate ranges from ______________ per year.

12% to 18%

The United States has approximately ___________ credit card holders.

180 million

During the last two centuries, the average rate of growth of GDP per capita in the leading industrialized countries has averaged about _________ per year. a.22% b.12% c.2% d.32%

2%

Of the world's population of 6.7 billion people, _________ are scraping by on incomes that average less than $2 per day. a. 6.2 billion b. 5 billion c. 260 million d. 2.6 billion

2.6 billion

Assuming a country's economy maintains an 8% rate of growth, young adults starting at age 20 would see the average standard of living in their country more than double by the time they had reached age __________. a.30 b.60 c.50 d.40

30

In certain African countries like Niger, Tanzania, Nigeria, and Sudan, for example, GDP per capita at the start of the 2000s was still less than $___________. a.3000 b.30,000 c.300 d.30

300

Durable goods and non-durable goods comprise approximately ________ of the supply side of the GDP. a.1% b.45% c.80% d.20%

45%

Consumption in the United States is about ____________ of GDP, and it moves relatively little over time.

68%

On the supply side of the GDP, Structures account for around __________ of U.S. GDP. a.37% b.7% c.57% d.17%

7%

On the supply side of the GDP, Structures account for around __________ of U.S. GDP. a.7% b.17% c.37% d.57%

7%

In the early 2000s, the illiteracy rate for girls between the ages of 15 and 24 was __________ and the illiteracy rate for males in this age group was ______________. a.80%; 83% b.78%; 75% c.72%; 69% d.67%; 70%

78%; 75%

Which of the following is included in the calculated Gross Domestic Product? a.Suzanne buys a love seat and chair for $85 at the yard sale on the corner. b.Mr. Farkle buys a used lawn mower from his neighbor, Mr. Sparkle. c.A local ice cream store sells $17,000 worth of cones and sundaes on July 1. d.Farmer Freddie sells his second tractor to his son.

A local ice cream store sells $17,000 worth of cones and sundaes on July 1.

On April 1, 2009, in the middle of a recession, the government of the province of Ontario, Canada increased the provincial minimum wage from $8.75 to $9.50. What will the likely effect of this policy be? a.Low income workers will be better able to survive the recession at the new, higher wage rate. b.The higher wage will increase the supply of labor offsetting the effects of the recession. c.Both the leftward shift in the labor demand curve and the higher minimum wage will lead to an increase in the unemployment rate. d.More people will be hired at the higher wage rate offsetting the effects of the recession.

Both the leftward shift in the labor demand curve and the higher minimum wage will lead to an increase in the unemployment rate.

___________ is about two-thirds of the demand side of GDP, but it moves relatively little over time. a.Services b.Investment c.Government d.Consumption

Consumption

_______________, which can be approximated by the growth of gross domestic product, ultimately determines the prevailing standard of living in a country. a.Inflation b.Education c.Trade balance d.Economic growth

Economic growth

A nation's prosperity is sometimes measured in terms of ___________. a.GNP b.economic output c.GDP d.GDP per capita

GDP per capita

An economy's rate of productivity growth is closely linked to the growth rate of its ______________, although the two aren't identical.

GDP per capita

When discussing economic growth, it is often useful to focus on ____________, to avoid studying changes in the size of GDP that represent only having more people in the economy, and focus on those increases in GDP which represent an actual rise in the standard of living on a per person basis. a.economic growth b.consumption and expenditures c.living standards d.GDP per capita

GDP per capita

Some prominent members of the slow-economic growth country club include a high-income country like _________. a.Somalia b.Germany c.Nigeria d.Bolivia

Germany

If an increase in the price of Good X causes a decrease in the demand for Good Y, we can conclude that: a.the price of Good Y will increase. b.Goods X and Y are complement goods. c.Goods X and Y are normal goods. d.Goods X and Y are substitute goods.

Goods X and Y are complement goods.

____________ is a term which refers to the widespread use of power-driven machinery and the economic and social changes that resulted in the first half of the 1800s. a.Industrial Revolution b.Capital deepening c.Living standard d.Technology

Industrial Revolution

___________ is a small category that refers to the goods produced by one business that have yet to be sold to consumers, and are either still sitting in warehouses and on store shelves. a.Structures b.Inventories c.Durable goods d.Services

Inventories

Which of the following did not result in economic growth? a.Installing a network of irrigation ditches and pumping stations in order to grow fruits and vegetables in parts of southern California. b.Many citizens emigrating from Zimbabwe when a politically repressive regime took office. c.The invention of a threshing machine for harvesting grains. d.Increased government funding of post-secondary education.

Many citizens emigrating from Zimbabwe when a politically repressive regime took office.

_________ is calculated by taking _________ and then subtracting the value of how much physical capital is worn out, or reduced in value because of aging, over the course of a year. a.GDP; NNP b.NNP; GNP c.GNP; NNP d.NNP; GDP

NNP; GNP

_________ is output per hour in the business sector. a.Net exports b.Investment c.GDP per capita d.Productivity

Productivity

Are markets always in equilibrium? a.Yes, they are always at the equilibrium point, or very close to it. b.Yes, because very few things tend to alter supply and demand. c.No, they never "settle down" into a stable price and quantity. d.No, but if there is no outside interference, they tend to move toward equilibrium.

No, but if there is no outside interference, they tend to move toward equilibrium.

Refer to Figure 4-1. The movement from __________ to __________ is consistent with a successful advertising campaign that claims wool keeps you warm. a. Point A; Point H b. Point A; Point D c. Point A; Point B d. Point A; Point F

Point A; Point F

Interpret the following statement: "An increase in the price of wheat will encourage farmers to increase the quantity of wheat supplied to the market." a.The statement would be correct if "quantity of wheat demanded" were substituted for "quantity of wheat supplied." b.The statement would be correct if it read that a "decrease in the price of wheat will encourage farmers to increase the quantity of wheat supplied to the market." c.The statement is correct. d.The statement is incorrect because it confuses a change in quantity supplied with a change in supply.

The statement is correct.

Steel mill wage costs increase by 18 percent over a year. What is the likely economic effect on the market for steel?

There is an increase in the cost of producing steel, which shifts the supply curve of steel to the left, thereby increasing the price of steel.

Increased investment alone will guarantee economic growth. a.This is a true statement, because growth occurs only with savings. b.This is a true statement, because money is the only resource needed for growth. c.This is a false statement, because an economy must rely on capital injections from abroad. d.This is a false statement, because economic growth hinges on the quality and type of investment as well as the human capital and improvements in technology.

This is a false statement, because economic growth hinges on the quality and type of investment as well as the human capital and improvements in technology.

(Price) D1 D2 S1 S2 $12 5 9 19 14 $10 8 12 17 12 $8 11 15 15 10 $6 13 18 13 8 $4 16 21 11 6 $2 18 24 9 4 Refer to Table 4-1. Suppose that D1 and S2 are the demand and supply schedules for Product A. If the government imposes a price ceiling of $4, then: a. a 10 unit surplus will result. b. a 5 unit shortage will result. c. a 10 unit shortage will result. d. a 5 unit surplus will result.

a 10 unit shortage will result.

A change in price of a good or service typically causes ___________________________ for that specific good or service. a.a change along the supply curve b.a decreased demand c.a new equilibrium price d.the supply curve to shift

a change along the supply curve

Possibility A I II III Economics (94) (87) (77) History (76) (84) (91) Refer to Table 2-1. A student has only a few hours to prepare for two different exams tomorrow morning. The above table shows alternative possible exam outcomes with three alternative uses of the student's time. The opportunity cost of scoring an 84 on the history exam rather than 76 is: Select one: a. 7 points on the economics exam b. 12 points on the economics exam c. 10 points on the economics exam d. 8 points on the history exam

a. 7 points on the economics exam

Refer to Figure 2-2. When the economy moves from Point A to Point B in the diagram above: Select one: a. All of the above occur. b. the economy begins using its resources efficiently to produce both food and clothing. c. the economy increases production of both clothing and food. d. the economy operates at its productive capacity once it reaches Point B.

a. All of the above occur.

In which of the following countries will the national government have the greatest influence with respect to the nation's economy? Select one: a.Cuba b.China c.Canada d.Chile

a. Cuba

Refer to Figure 2-1. The most inefficient point depicted is: Select one: a. Point G b. Point C c. Point D d. Point A

a. Point G

Which of the following lies primarily within the realm of macroeconomics? Select one: a.a study of how tax cuts stimulate aggregate production b.a study of the impact of "mad cow" disease on the price of beef worldwide c.an analysis of supply and demand conditions in the electricity market d.a study of the demand for gasoline

a. a study of how tax cuts stimulate aggregate production

Marginal thinking is best demonstrated by: Select one: a.choosing to spend one more hour studying economics because you think the improvement in your score on the next quiz will be worth the sacrifice of time. b.acquiring the information relevant to a choice before making that choice c.deciding to never purchase a coat made with animal skins or furs d.measuring all of the costs of a meal against all of the benefits when deciding whether to order a second milkshake

a. choosing to spend one more hour studying economics because you think the improvement in your score on the next quiz will be worth the sacrifice of time.

Economic models like the _____________________ are not physical models, but instead are diagrams or graphs or even mathematical equations that represent economic patterns or theories. Select one: a.circular flow diagram b.financial capital market c.Specialization Model d.financial investment market

a. circular flow diagram

Regardless of whether you are looking through the microeconomics microscope or the macroeconomics telescope, the fundamental subject material of the interconnected ___ doesn't change. Select one: a. economy b. market c. production d. firm

a. economy

Regardless of whether you are looking through the microeconomics microscope or the macroeconomics telescope, the fundamental subject material of the interconnected ___ doesn't change. a. economy b. market c. production d. firm

a. economy

Which of the following is generally accepted as a valid criticism of the production of useful goods and services? Select one: a.environmental pollution b.the black market c.government involvement d.economic freedom

a. environmental pollution

The two main tools of macroeconomic policy include monetary policy, and fiscal policy, which involves __________ spending. Select one: a.government b.capital market c.business d.household

a. government

Which of the following best describes a monetary policy tool? Select one: a.interest rates b.household savings c.taxes d.government spending

a. interest rates

Macroeconomics: Select one: a.is concerned with the expansion and contraction of the overall economy. b.is narrower in scope than microeconomics. c.analyzes mergers and acquisitions between firms. d.is concerned with the expansion of a small business into a large corporation.

a. is concerned with the expansion and contraction of the overall economy.

Refer to Figure 2-2. At Point A in the production possibilities graph shown above, the economy: Select one: a. is not using its resources efficiently. b. is using its resources efficiently while producing clothing but no food. c. is using its resources efficiently while producing clothing but no food. d. is using its resources efficiently to produce both food and clothing.

a. is not using its resources efficiently

Most real-world choices aren't about getting all of one thing or another, instead, most choices involve _________________, which involves comparing the benefits and costs of choosing a little more or a little less of a good. Select one: a.marginal analysis b.opportunity cost c.benefit analysis d.utility

a. marginal analysis

"If I didn't have class tonight, I would save the $4 campus parking fee and spend four hours at work where I earn $10 per hour." The opportunity cost of attending class this evening is: Select one: a.$44 b.$4 c.$40 d.$0

a.$44

The term "ceteris paribus" means that: a.no one knows which variables will change and which will remain constant. b.all variables except those specified are constant. c.what is true for the individual is not necessarily true for the whole. d.everything is variable.

all variables except those specified are constant.

In macroeconomics, the connection from inputs to outputs for the entire economy is called _______________. a.a production function b.an aggregate production function c.physical capital d.human capital

an aggregate production function

To compare the GDP of two different countries with different currencies, it is necessary to use _________________________.

an exchange rate

Which of the following results in a rightward shift of the market demand curve for labor?

an increase in demand for the firm's product

Which of the following will not result in a rightward shift of the market supply curve for labor?

an increase in labor productivity

Which of the following factors contribute to economic growth? a.a decrease in the productivity of labor b.an increase in the proportion of the population that is college educated c.an increase in the standard of living d.an increase in the average wage rate paid to workers

an increase in the proportion of the population that is college educated

Which of the following will not result in a leftward shift of the market demand curve for labor? a.an increase in the wage rate b.a decrease in demand for the firm's product c.a decrease in labor productivity d.a decrease in the firm's product price

an increase in the wage rate

Which of the following are most likely classified by economists as consumer durable goods?

automobiles, furniture

"If I didn't have class tonight, I would save the $4 campus parking fee and spend four hours at work where I earn $10 per hour." The opportunity cost of attending class this evening is: Select one: a.$40 b.$44 c.$4 d.$0

b. $44

Possibility A I II III Economics (94) (87) (77) History (76) (84) (91) Referring to Table 2-1: A student has only a few hours to prepare for two different exams this afternoon. The above table shows alternative possible exam scores with three alternative uses of the student's time. The opportunity cost of scoring a 94 on the economics exam rather than a 77 is: Select one: a. 8 points on the history exam. b. 15 points on the history exam. c. 14 points on the history exam. d. 17 points on the history exam.

b. 15 points on the history exam.

Why is there scarcity? Select one: a. Because theory dictates it. b. Because our unlimited wants exceed our limited resources c. Because human wants are limited d. Because the opportunity set determines this

b. Because our unlimited wants exceed our limited resources

Which of the following best characterizes the circular flow of income? Select one: a.Businesses buy resources from the government, and households buy goods and services from businesses. b.Businesses buy resources from households, and households use their income from the sale of resources to buy goods and services from businesses. c.Households buy factors of production from businesses, and businesses buy goods and services from households. d.The government purchases resources from businesses and households and then sells goods and services to businesses and households.

b. Businesses buy resources from households, and households use their income from the sale of resources to buy goods and services from businesses.

In which of the following countries will the national government have the greatest influence with respect to the nation's economy? Select one: a.Canada b.Cuba c.China d.Chile

b. Cuba

_____________ a term referring to the fact that for many goods, as the level of production increases, the average cost of producing each individual unit declines. Select one: a. Skill b. Economies of scale c. Specialization d. Division of labor

b. Economies of scale

The choice on a production possibilities set that is socially preferred, or the choice on an individual's budget constraint that is personally preferred, will display _____________________. Select one: a. the production possibilities frontier b. allocative efficiency c. scarcity d. trade-offs

b. allocative efficiency

The model that economists use for illustrating the process of individual choice in a situation of scarcity is the _________________, sometimes also called the opportunity set, a diagram which shows what choices are possible. Select one: a. consumption set b. budget constraint c. original budget d. income cap

b. budget constraint

The slope of the _________________ is determined by the relative price of the two goods, which is calculated by taking the price of one good and dividing it by the price of the other good. Select one: a.productive efficiency b.budget constraint c.production possibilities frontier d.Opportunity cost

b. budget constraint

The law of ____________________________ explains why people and societies rarely make all-or-nothing choices. Select one: a. marginal analysis b. diminishing marginal utility c. consumption d. utility

b. diminishing marginal utility

In the first chapter of The Wealth of Nations, Smith introduces the idea of the __________, which means the way in which the work required to produce a good or service is divided into a number of tasks that are performed by different workers. Select one: a.modern economy b.division of labor c.task economy d.interconnected economy

b. division of labor

The circular flow diagram of economic activity is a model of the: Select one: a.interaction among taxes, prices, and profits. b.flow of goods, services, and payments between households and firms. c.role of unions and government in the economy. d.influence of government on business behaviour.

b. flow of goods, services, and payments between households and firms.

In a command economy, the __________ either makes most economic decisions itself or at least strongly influences how the decisions are made. Select one: a.firm b.government c.business sector d.market

b. government

Which of the following best describes a fiscal policy tool? Select one: a.bank lending b.government spending c.household spending d.financial capital markets

b. government spending

Which of the following best describes a fiscal policy tool? Select one: a.financial capital markets b.government spending c.bank lending d.household spending

b. government spending

The basic difference between macroeconomics and microeconomics is: Select one: a.microeconomics concentrates on individual markets while macroeconomics focuses primarily on international trade. b.microeconomics concentrates on the behaviour of individual consumers and firms while macroeconomics focuses on the performance of the entire economy. c.microeconomics explores the causes of inflation while macroeconomics focuses on the causes of unemployment. d.microeconomics concentrates on the behaviour of individual consumers while macroeconomics focuses on the behaviour of firms.

b. microeconomics concentrates on the behaviour of individual consumers and firms while macroeconomics focuses on the performance of the entire economy.

In many cases, it is reasonable to refer to the ________________ as the price. Select one: a.budget constraint b.opportunity cost c.budget constraint d.sunk cost

b. opportunity cost

In a discussion of economics, which of the following would exert the most influence on an individual firm's decision to hire workers? Select one: a.wage levels b.the macroeconomy c.household income d.the firm's income

b. the macroeconomy

The general pattern that consumption of the first few units of any good tends to bring a higher level of _______ to a person than consumption of later units is a common pattern. Select one: a. sunk costs b. utility c. opportunity cost d. marginal benefit

b. utility

Many cooks view butter and margarine to be substitutes. If the price of butter rises, then in the market for margarine: a.the equilibrium price will rise and the equilibrium quantity will decrease. b.both the equilibrium price and quantity will rise. c.the equilibrium price will fall and the equilibrium quantity will fall. d.the equilibrium price will rise, while the change to equilibrium quantity is indeterminate.

both the equilibrium price and quantity will rise.

The nature of demand indicates that as the price of a good increases: a.buyers desire to purchase less of it. b.suppliers wish to sell less of it. c.more of it is desired. d.more of it is produced.

buyers desire to purchase less of it.

Possibility A I II III Economics (94) (87) (77) History (76) (84) (91) Referring to Table 2-1: A student has only a few hours to prepare for two different exams this afternoon. The above table shows alternative possible exam scores with three alternative uses of the student's time. The opportunity cost of scoring a 94 on the economics exam rather than a 77 is: Select one: a. 17 points on the history exam. b. 8 points on the history exam. c. 15 points on the history exam. d. 14 points on the history exam.

c. 15 points on the history exam.

Possibility A I II III Economics (94) (87) (77) History (76) (84) (91) Refer to Table 2-1. A student has only a few hours to prepare for two different exams tomorrow morning. The above table shows alternative possible exam outcomes with three alternative uses of the student's time. The opportunity cost of scoring an 84 on the history exam rather than 76 is: Select one: a. 8 points on the history exam b. 12 points on the economics exam c. 7 points on the economics exam d. 10 points on the economics exam

c. 7 points on the economics exam

Refer to Figure 2-2. When the economy moves from Point A to Point B in the diagram above: Select one: a. the economy increases production of both clothing and food. b. the economy begins using its resources efficiently to produce both food and clothing. c. All of the above occur. d. the economy operates at its productive capacity once it reaches Point B.

c. All of the above occur.

Why is there scarcity? Select one: a. Because human wants are limited b. Because theory dictates it. c. Because our unlimited wants exceed our limited resources d. Because the opportunity set determines this

c. Because our unlimited wants exceed our limited resources

Refer to Figure 2-1. An economy is operating at full employment, and then workers in the bread industry are laid off. This change is portrayed in the movement from: Select one: a. A to B b. G to F c. C to F d. B to E

c. C to F

Which of the following would most likely shift the production possibilities curve inward? Select one: a.an increase in the production of capital goods b.an increase in the number of hours factories are in use c.a decrease in the average number of hours worked per week as the labor force chooses to enjoy more leisure time d.technological progress

c. a decrease in the average number of hours worked per week as the labor force chooses to enjoy more leisure time

Which of the following is most likely a topic of discussion in macroeconomics? Select one: a.an increase in the wage rate paid to automobile workers b.an increase in the price of a hamburger c.a decrease in the unemployment rate d.a decrease in the production of DVD players by a consumer electronics company

c. a decrease in the unemployment rate

Which of the following lies primarily within the realm of macroeconomics? Select one: a.an analysis of supply and demand conditions in the electricity market b.a study of the impact of "mad cow" disease on the price of beef worldwide c.a study of how tax cuts stimulate aggregate production d.a study of the demand for gasoline

c. a study of how tax cuts stimulate aggregate production

In a market-oriented economy, the amount of a good that is produced is primarily decided by the interaction of: Select one: a.producers and input suppliers. b.producers and government planning committees. c.buyers and sellers. d.all consumers.

c. buyers and sellers.

In the first chapter of The Wealth of Nations, Smith introduces the idea of the __________, which means the way in which the work required to produce a good or service is divided into a number of tasks that are performed by different workers. Select one: a.interconnected economy b.modern economy c.division of labor d.task economy

c. division of labor

Which of the following is generally accepted as a valid criticism of the production of useful goods and services? Select one: a.economic freedom b.the black market c.environmental pollution d.government involvement

c. environmental pollution

In the ______________, households receive goods and services and pay firms for them. Select one: a.labor market b.financial capital market c.goods and services market d.savings market

c. goods and services market

Because of their relatively small national economies, which of the following is most likely considered to be the most important factor for Belgium, Korea, and Canada to take full advantage of specialization? Select one: a.command economy b.division of labour c.international trade d.economies of scale

c. international trade

The opportunity cost of an action: Select one: a. can be determined by adding up the bills incurred as a result of the action. b. can be determined by considering both the benefits that flow from as well as the monetary costs incurred as a result of the action. c. is a subjective valuation that can be determined only by the individual who chooses the action. d. can be objectively determined only by economists.

c. is a subjective valuation that can be determined only by the individual who chooses the action.

In the ____________, households work and receive payment from firms. Select one: a.financial capital market b.savings market c.labor market d.financial investment market

c. labor market

Economists refer to this pattern, the ___________________________________, which means that as a person receives more of a good, the additional or marginal utility from each additional unit of the good declines. Select one: a. law of increasing marginal utility b. production possibilities frontier c. law of diminishing marginal utility d. law of trade-offs

c. law of diminishing marginal utility

When nations desire a healthy macroeconomy, they typically focus on three goals, one of these being: Select one: a.balanced budget b.assuring competition between firms c.low inflation d.prudent monetary policy

c. low inflation

In a _______________________, most economic decisions about what to produce, how to produce it, and for whom to produce it are made by buyers and sellers. Select one: a.macroeconomy b.command economy c.market-oriented economy d.microeconomy

c. market-oriented economy

Attending college is a case where the ________________ exceeds the monetary cost. Select one: a. marginal utility b. budget constraint c. opportunity cost d. marginal analysis

c. opportunity cost

If macroeconomics looks at the economy as a whole, it focuses on which of the following? Select one: a.the division of labor b.households c.unemployed people d.business firms

c. unemployed people

In deciding how many hours to work, Beulah will make a choice that maximizes her _______; that is, she will choose according to her preferences for leisure time and income. Select one: a. opportunity set b. budget constraints c. utility d. production possibilities frontier

c. utility

When society has a higher level of capital per person, it is called ______________.

capital deepening

Which of the following is not included in GDP? a.cash income paid to a day laborer that is not reported to the tax authorities b.the payments for a chiropractor's services c.the fees for legal services rendered by your lawyer d.the replacement of brake pads on your six-year-old vehicle

cash income paid to a day laborer that is not reported to the tax authorities

The demand measure of GDP accounting adds together: a.consumption, investment, government purchases, and trade balance. b.wages and salaries, rent, interest, and profit. c.consumption, interest, government purchases, and trade balance. d.consumption, government purchases, wages and salaries, and trade balance.

consumption, investment, government purchases, and trade balance.

When __________________, a firm will supply a higher quantity at any given price for its output, and the supply curve will shift to the right. a.costs of production fall b.equilibrium is achieved c.prices rise d.there is a population increase

costs of production fall

Refer to Figure 2-1. The most inefficient point depicted is: a. Point C b. Point D c. Point A d. Point G

d. Point G

Refer to Figure 2-1. Along the production possibilities frontier, the most efficient point of production depicted is: Select one: a. Point C b. Point B c. Point D d. All points on the production possibilities frontier are equally efficient.

d. All points on the production possibilities frontier are equally efficient.

Refer to Figure 2-1. Along the production possibilities frontier, the most efficient point of production depicted is: Select one: a. Point D b. Point B c. Point C d. All points on the production possibilities frontier are equally efficient.

d. All points on the production possibilities frontier are equally efficient.

Which of the following statements most likely lies within the realm of microeconomics? Select one: a.Unemployment rises during a recession and falls during an expansion. b.A rapid acceleration of the supply of money may create inflation. c.An increase in government spending will increase the aggregate demand for goods and services in the economy. d.An increase in labor costs will increase the additional cost of producing another bus.

d. An increase in labor costs will increase the additional cost of producing another bus.

Which of the following best characterizes the circular flow of income? Select one: a.Households buy factors of production from businesses, and businesses buy goods and services from households. b.The government purchases resources from businesses and households and then sells goods and services to businesses and households. c.Businesses buy resources from the government, and households buy goods and services from businesses. d.Businesses buy resources from households, and households use their income from the sale of resources to buy goods and services from businesses.

d. Businesses buy resources from households, and households use their income from the sale of resources to buy goods and services from businesses.

Refer to Figure 2-1. An economy is operating at full employment, and then workers in the bread industry are laid off. This change is portrayed in the movement from: Select one: a. A to B b. G to F c. B to E d. C to F

d. C to F

In countries like _____________ the command economy predominates. Select one: a.China and Vietnam b.South Africa and Kenya c.Germany and France d.Cuba and North Korea

d. Cuba and North Korea

Which of the following statements most likely lies within the realm of macroeconomics? Select one: a.An increase in the price of automobiles will lead to a decrease in the quantity of automobiles demanded. b.Due to process innovations in computer chip manufacturing, the market supply of computers increased. c.Anticipating that the benefits would outweigh costs involved, an undergraduate student purchases the course textbook. d.Due to an economic recession, manufacturing firms began implementing layoffs of their workforces.

d. Due to an economic recession, manufacturing firms began implementing layoffs of their workforces.

Which of the following would most likely shift the production possibilities curve inward? Select one: a.an increase in the number of hours factories are in use b.technological progress c.an increase in the production of capital goods d.a decrease in the average number of hours worked per week as the labor force chooses to enjoy more leisure time

d. a decrease in the average number of hours worked per week as the labor force chooses to enjoy more leisure time

Which of the following is most likely a topic of discussion in macroeconomics? Select one: a.an increase in the price of a hamburger b.an increase in the wage rate paid to automobile workers c.a decrease in the production of DVD players by a consumer electronics company d.a decrease in the unemployment rate

d. a decrease in the unemployment rate

Macroeconomics primarily examines: Select one: a.the behaviour of individual households and firms. b.how prices are determined within individual markets. c.the output levels that maximize the profits of business firms d.broad issues such as national output, employment and inflation.

d. broad issues such as national output, employment and inflation.

Macroeconomics primarily examines: a.the behaviour of individual households and firms. b.how prices are determined within individual markets. c.the output levels that maximize the profits of business firms d.broad issues such as national output, employment and inflation.

d. broad issues such as national output, employment and inflation.

Specialization Select one: a.is always the result of an inefficient use of resources b.allows workers to develop skills by working on a large number of tasks c.leads to greater self-sufficiency. d.can lead to an increase in overall production.

d. can lead to an increase in overall production.

Specialization Select one: a.leads to greater self-sufficiency. b.is always the result of an inefficient use of resources c.allows workers to develop skills by working on a large number of tasks d.can lead to an increase in overall production.

d. can lead to an increase in overall production.

Which of the following best describes a monetary policy tool? Select one: a.household savings b.taxes c.government spending d.interest rates

d. interest rates

Scarcity implies that: Select one: a. at the current market price, consumers are willing to purchase more of a good than suppliers are willing to produce. b. consumers are too poor to afford the goods and services available c. consumers would be willing to purchase the same quantity of a good at a higher price. d. it is impossible to completely fulfill the unlimited human desire for goods and services with the limited resources available.

d. it is impossible to completely fulfill the unlimited human desire for goods and services with the limited resources available.

Economists refer to this pattern, the ___________________________________, which means that as a person receives more of a good, the additional or marginal utility from each additional unit of the good declines. Select one: a. law of trade-offs b. law of increasing marginal utility c. production possibilities frontier d. law of diminishing marginal utility

d. law of diminishing marginal utility

As a person receives more of a good, the _______________ from each additional unit of the good declines. Select one: a. sunk costs b. budget constraint c. utility d. marginal utility

d. marginal utility

The basic difference between macroeconomics and microeconomics is that: Select one: a.macroeconomics is concerned with generalization while microeconomics is concerned with specialization. b.microeconomics looks at the forest (aggregate markets) while macroeconomics looks at the trees (individual markets). c.macroeconomics is concerned with groups of individuals while microeconomics is concerned with single countries. d.microeconomics is concerned with the trees (individual markets) while macroeconomics is concerned with the forest (aggregate markets).

d. microeconomics is concerned with the trees (individual markets) while macroeconomics is concerned with the forest (aggregate markets).

Philosophers draw a distinction between positive statements, which describe the world as it is, and ___________________s, which describe how the world should be. Select one: a.budget constraint b.trade-off c.opportunity cost d.normative statement

d. normative statement

The lesson of __________ is to forget about the money that's irretrievably gone and instead to focus on the marginal costs and benefits of future options. Select one: a. budget constraints b. opportunity costs c. marginal analysis d. sunk costs

d. sunk costs

The lesson of __________ is to forget about the money that's irretrievably gone and instead to focus on the marginal costs and benefits of future options. Select one: a. marginal analysis b. budget constraints c. opportunity costs d. sunk costs

d. sunk costs

Gomer decides to spend an hour playing basketball rather than studying. His opportunity cost is: Select one: a.nothing, because he enjoys playing basketball more than studying. b.the increase in skill he obtains from playing basketball for that hour. c.nothing, because he had a free pass into the sports complex to play basketball. d.the benefit to his grades from studying for an hour

d. the benefit to his grades from studying for an hour

As depicted in _________________________________, it is necessary to give up some of one good to gain more of the other good. Select one: a. utility b. allocative efficiency c. scarcity d. the production possibilities frontier

d. the production possibilities frontier

Macroeconomic topics do not usually include: Select one: a.the rate of inflation. b.the rate of unemployment. c.economic growth. d.the profit maximizing decisions of an individual manufacturer.

d. the profit maximizing decisions of an individual manufacturer.

Refer to Figure 3-2. A change from Point A to Point B represents a/an: a. increase in quantity demanded. b. decrease in quantity demanded. c. increase in demand. d. decrease in demand.

decrease in quantity demanded.

Refer to Figure 3-3. A change from Point A to Point E represents a/an: a. increase in supply. b. increase in quantity supplied. c. decrease in quantity supplied. d. decrease in supply.

decrease in supply.

The labor ____________ curve(s) will shift _______________ if there is an increase in productivity or an increase in the demand for the final product. a.demand; left b.supply; left c.demand; right d.supply; right

demand; right

Country Able and Country Baker initially have the same real GDP per capita. Country Able experiences no economic growth, while Country Baker grows at a sustained rate of 7 percent. In 12 years, Country Baker's GDP will be approximately ___________ that of Country Able. a.one-half b.triple c.double d.one-fourth

double

The ___________ is the only price where quantity demanded is equal to quantity supplied. a.market price b.equilibrium price c.horizontal axis intercept d.vertical axis intercept

equilibrium price

(Price) D1 D2 S1 S2 $12 5 9 19 14 $10 8 12 17 12 $8 11 15 15 10 $6 13 18 13 8 $4 16 21 11 6 $2 18 24 9 4 Refer to Table 4-1. Suppose that D1 and S1 are the prevailing demand and supply curves for a product. If the demand schedule changes from D1 to D2, then:

equilibrium price increases from $6 to $8

The ____________ is the quantity where quantity demanded and quantity supplied are equal at a certain price. a.equilibrium quantity b.demand schedule c.quantity demanded d.supply schedule

equilibrium quantity

(Price) D1 D2 S1 S2 $12 5 9 19 14 $10 8 12 17 12 $8 11 15 15 10 $6 13 18 13 8 $4 16 21 11 6 $2 18 24 9 4 Refer to Table 4-1. Suppose that D2 and S1 are the prevailing demand and supply curves for a product. If the demand schedule changes from D2 to D1, then: a. equilibrium quantity increases from 13 to 18 b. equilibrium price decreases from $6 to $4. c. equilibrium price increases from $6 to $8. d. equilibrium quantity decreases from 15 to 13.

equilibrium quantity decreases from 15 to 13

If the price is below the equilibrium level, then the quantity demanded will exceed the quantity supplied. This is known as ___________________ a.excess supply b.ceteris paribus c.excess demand d.a price ceiling

excess demand/shortage

A business cycle reflects changes in economic activity, particularly real GDP. The stages of a business cycle are: a.trough, expansion, recession, peak b.expansion, trough, recession, peak c.contraction, recession, expansion, boom d.expansion, peak, recession, trough

expansion, peak, recession, trough

Gross Domestic Product equals $1.2 trillion. If consumption equals $690 billion, investment equals $200 billion, and government spending equals $260 billion, then: a. imports exceed exports by $50 billion. b. exports exceed imports by $50 billion. c. imports exceed exports by $150 billion. d. exports exceed imports by $150 billion.

exports exceed imports by $50 billion.

In order to avoid double counting, statisticians just count the __________________. a.intermediate goods and services b.durable goods and nondurable goods c.final inventories d.final goods and services

final goods and services

Some recent economic research has suggested that African countries' economic growth may have been limited by __________________. a.technological challenges b.government interventionism c.population d.geography and climate

geography and climate

Final goods or services used to compute GDP refer to:

goods and services purchased by the ultimate users.

Which of the following would reduce the supply of microcomputers? a.higher wage rates for the workers that assemble the computers b.a technological improvement that lowers the cost of producing the computers c.a reduction in the price of computer chips used to produce the computers d.a reduction in the price of computers.

higher wage rates for the workers that assemble the computers

On the demand side of GDP, consumption by _____________ is the largest component of GDP, accounting for about two-thirds of the GDP in any year.

households

Consumption is the purchase of goods and services by: a.business firms. b.households. c.foreign buyers. d.government.

households.

Refer to Figure 3-1. Using the graph above and beginning on D1, a shift to D2 would indicate a/an: a. decrease in demand. b. decrease in quantity demanded. c. increase in demand. d. increase in quantity demanded.

increase in demand.

Refer to Figure 3-3. A change from Point A to Point B represents a/an: a. decrease in supply. b. decrease in quantity supplied. c. increase in quantity supplied. d. increase in supply.

increase in quantity supplied.

Refer to Figure 3-3. A change from Point A to Point D represents a/an: a. decrease in quantity supplied. b. decrease in supply. c. increase in quantity supplied. d. increase in supply

increase in supply.

Improvements in the productivity of labor will tend to: a.decrease wages. b.decrease the supply of labor. c.increase the supply of labor. d.increase wages.

increase wages.

Which of the following is most likely to contribute to economic growth as measured by GDP per capita?

increased capital formation

If the demand for software engineers __________ slower than does supply, then wages of software engineers will __________. a.increases; fall b.decreases; fall c.increases, rise d.increases; remain constant

increases; fall

The demand schedule for a good: a.is determined primarily by the cost of producing the good. b.indicates the quantities that suppliers will sell at various market prices. c.indicates the quantity that people will buy at the prevailing price. d.indicates the quantities that will be purchased at alternative market prices.

indicates the quantities that will be purchased at alternative market prices.

Investment in human capital: a. is of minor importance to economic growth. b. can be acquired through on-the-job training. c. is an important source of economic growth. d. is characterized by both b) and c).

is characterized by both b) and c).

A nation can achieve higher economic growth if: a.more resources are allocated to consumption goods. b.the productivity of labor declines c.taxes are imposed on investment in capital. d.it devotes more resources to research and development.

it devotes more resources to research and development.

Other things being equal, a __________ supply of workers tends to __________ real wages. a.smaller; decrease b.smaller; not change c.larger; increase d.larger; decrease

larger; decrease

Economists refer to the relationship that a higher price leads to a lower quantity demanded as the _____________. a. law of demand b. income gap c. market equilibrium d. price model

law of demand

Since Baltimore passed the first _______________ in 1994, several dozen cities enacted similar laws in the late 1990s and into the 2000s.

living wage law

If a firm faces ________________________, while the prices for the output the firm produces remain unchanged, a firm's profits will increase. a. a shift in demand b. lower costs of production c. equilibrium d. higher demand

lower costs of production

The demand curve for a typical good has a/an: a.inverse slope because as the price goes up, the good has more profitability. b.negative slope because the good has less "snob appeal" as its price falls. c.negative slope because consumer incomes fall as the price of the good rises. d.negative slope because some consumers switch to other goods as the price rises.

negative slope because some consumers switch to other goods as the price rises.

Many economists believe that the trend toward greater wage inequality across the U.S. economy was primarily caused by _____________.

new technologies

Country Alpha and Country Beta initially have the same real GDP per capita. Country Alpha experiences no economic growth, while Country Beta grows at a sustained rate of 5 percent. In 14 years, Country Alpha's GDP will be approximately _________ that of Country Beta. a.triple b.one-fourth c.double d.one-half

one-half

A supply curve is a graphical illustration of the relationship between price, shown on the vertical axis, and ____________, shown on the horizontal axis. a.quantity supplied b.quantity demanded c.demand d.quantity

quantity

A demand curve shows the relationship between price and _________________ on a graph. a.economies of scale b.costs c.quantity demanded d.quantity produced

quantity demanded

_________________ refers to the total number of units that are purchased at that price. a.supply b.quantity c.quantity demanded d.market quantity

quantity demanded

When economists talk about supply, they are referring to a relationship between price received for each unit sold and the _________________. a.demand schedule b.quantity supplied c.market price d.demand curve

quantity supplied

A straightforward example of a _______________, often used for simplicity, is the interest rate.

rate of return

The difference between nominal GDP and real GDP is: a.nominal GDP measures actual productivity b.real GDP excludes imports and exports c.nominal GDP adjusts for inflation d.real GDP adjusts for inflation

real GDP adjusts for inflation

Economists typically measure economic growth by tracking: a.the unemployment rate. b.averaged GDP growth c.the employment rate. d.real GDP per capita.

real GDP per capita.

The nominal value of any economic statistic refers to the number that is actually announced at that time, while the ________________ refers to the statistic after it has been adjusted for inflation.

real value

A drought decreases the supply of agricultural products, which means that at any given price a lower quantity will be supplied; conversely, especially good weather would shift the __________________ . a.supply curve to the left b.demand curve to the right c.demand curve to the left d.supply curve to the right

supply curve to the right

As the __________ substitute for low-skill labor becomes available, the demand curve for low-skill labor will shift to the left. a.high-skill labor b.market c.technology d.lower wage

technology

As the _____________ complement for high-skill labor becomes cheaper, the demand curve for high-skill labor will shift to the right. a.lower wage b.low-skill labor c.technology d.market

technology

Since the late 1950s, economists have performed "growth accounting" studies in the United States. These have determined that ________________ is typically the most important contributor to U.S. economic growth. a.human capital b.physical capital c.a market orientation d.technology

technology

Since the late 1950s, economists have performed "growth accounting" studies in the United States. These have determined that ________________ is typically the most important contributor to U.S. economic growth. a.human capital b.technology c.a market orientation d.physical capital

technology

Investment (I) includes:

the amount spent on new factories and machinery.

Which of the following factors contribute to economic growth? a.a decline in the stock of physical capital b.a decrease in the quantity of labor due to emigration c.a decrease in the productivity of labor d.the discovery of new oil reserves

the discovery of new oil reserves

Which of the following factors contribute to economic growth? a.a decline in the stock of physical capital b.the discovery of new oil reserves c.a decrease in the quantity of labor due to emigration d.a decrease in the productivity of labor

the discovery of new oil reserves

Which of the following factors contribute to economic growth? a.the discovery of new oil reserves b.a decrease in the quantity of labor due to emigration c.a decrease in the productivity of labor d.a decline in the stock of physical capital

the discovery of new oil reserves

Which of the following is included in GDP? a.the value of lawn care service provided by a sixteen-year-old as part of his weekly chores b.the fees charged for a stock broker's services c.the receipts from a sale of land d.revenue from the sale of a three-year old car

the fees charged for a stock broker's services

Which of the following is unlikely to affect the rate of economic growth? a.the level of government spending b.technological change c.the quantity of available resources d.the quality of available resources

the level of government spending

When consumers and businesses have greater confidence that they will be able to repay in the future, _______________________. a.the quantity demanded of financial capital at any given interest rate will shift to the left. b.the quantity demanded of financial capital at any given interest rate will shift to the right. c.the quantity demanded of financial capital at any given interest rate will remain unchanged. d.the quantity demanded of financial capital at any given interest rate will achieve equilibrium.

the quantity demanded of financial capital at any given interest rate will shift to the right.

Whenever there is a shortage at a particular price, the quantity sold at that price will equal:

the quantity supplied at that price

If new manufacturers enter the computer industry, then (ceteris paribus): a.some established manufacturers must exit the industry. b.the demand curve shifts to the left. c.the supply curve shifts to the right. d.the supply curve shifts to the left.

the supply curve shifts to the right.

A severe freeze has once again damaged the Florida orange crop. The impact on the market for orange juice will be a leftward shift of: a.the demand curve, as consumers try to economize because of the shortage. b.the supply curve. c.the supply curve and a rightward shift of the demand curve, resulting in a higher equilibrium price. d.both the supply and demand curves.

the supply curve.

Which of the following is included in GDP calculations? a.the university tuition paid to enroll in a course b.a crisp $50 bill received on your birthday c.sales revenue received from a yard sale d.cash income received by a self-employed landscaper that is not reported to the IRS

the university tuition paid to enroll in a course

GDP is:

the value of all final goods and services produced domestically.

GDP does not directly include: a.the value of goods produced domestically and sold abroad. b.the value of final goods and services produced, but not sold, during a period. c.the value of intermediate goods sold during a period. d.the value of services rendered during a period.

the value of intermediate goods sold during a period.

When quantity demanded decreases in response to a change in price: a.the demand curve shifts to the right. b.there is a movement up along the demand curve. c.the demand curve shifts to the left. d.there is a movement down along the demand curve.

there is a movement up along the demand curve.

The gap between exports and imports in a nation's economy is called the ___________.

trade balance

But nearly all supply curves share a basic similarity: they slope _______________. a.up from right to left b.up from left to right c.down from left to right d.down from right to left

up from left to right

Many states do have ____________, which impose an upper limit on the interest rate that lenders can charge.

usury laws

In economics, the demand for a good refers to the amount of the good that people: a.need to achieve a minimum standard of living. b.would like to have if the good were free. c.will buy at alternative income levels. d.will buy at various prices.

will buy at various prices.

If labor demand is downward sloping and labor supply is upward sloping, then when labor demand rises faster than labor supply, it is expected that real wages __________. a.may increase, decrease or stay the same depending on the relative slopes. b.will decrease c.will increase d.will stay the same

will increase