ECON ALL HOMEWORK AND QUIZZES

Lakukan tugas rumah & ujian kamu dengan baik sekarang menggunakan Quizwiz!

To enhance their​ prestige, some country clubs like to point to the fact that they have a waiting list for new members. Even at clubs with high initiation​ fees, it is common that prospective members have to wait three or more years before there is room for them on the membership rolls. How do these country clubs set the price of membership to ensure that they have a waiting​ list?

. Set the membership price below the market clearing price.

The marginal tax rate is

. change in taxes due OVER change in taxable income .

A city councilwoman has proposed amending the living wage law. She suggests reducing the minimum wage to​ $6 per hour. Assuming that the labor demand and supply curves were to remain in their present​ positions, how many people would be unemployed at a​ $6 minimum​ wage?

0 thousand workers

​Month/Yr Cyclical Rate of Unemployment​ (percent) Apr​/2015 ______ Suppose it is claimed that actual real GDP deviates from potential real GDP by​ 2% for every percentage point of cyclical unemployment. In other​ words, assume that actual real GDP falls below​ (or rises​ above) potential real GDP by​ 2% when the rate of unemployment rises above​ (or falls​ below) the natural rate of unemployment by​ 1%. LOADING...

0.6

This​ year's value of the​ economy's price index is 101​, and people anticipate that next​ year's value will be 105. The current nominal interest rate is 5.9 percent. What is the real interest​ rate? The real interest rate is ___. ​

1.9%

Assume that there was a 5 percent increase in the price of all goods in​ 2015; if the base year is​ 2014, then the price index in 2015 will be

105

Commodity Market Basket Quantity 2001 price 2002 price Corn 40 lbs. ​$4.00 ​$4.75 Cherries 35 lbs. ​$5.00 ​$5.50 Assuming that 2001 is the base​ year, calculate the price index for 2002. In​ 2002, the price index is ______ The inflation rate between 2001 and 2002 is ______

114.18 14.18%

When income is​ $15,000, the amount of income taxes owed is​ $2,000; when income increases to​ $20,000, the amount owed increases to​ $3,000. The average income tax rate when a person earns​ $15,000 is

13.3 percent.

2007 Market Basket Commodity Quantity 2007 Price 2017 Price A 40 5 7 B 30 6 8 Refer to the above table. You are given information on​ Collin's consumption for 2007 and 2017. Using 2007 as the base year compute the price index for 2017. The index equals

136.842.

Consider the following hypothetical data for the U.S. economy in 2020​ (in trillions of​ dollars), and assume that there are no statistical​ discrepancies, zero net incomes earned​ abroad, and zero taxes on production and imports of net subsidies. Category Value Category Value Corporate profits before taxes deducted ​$2.7 Exports ​$1.5 Proprietorial income 0.9 Net transfers and interest earnings 2.1 Rent 0.7 Nonincome expense items 1.9 Interest 0.7 Imports 1.5 Wages 8.3 Corporate taxes 0.3 Depreciation 1.3 Social security contributions 1.8 Consumption 10.4 Government spending 1.6 a. Calculate the gross domestic income LOADING.... ​$ 15.2 trillion. ​(Enter your response rounded to one decimal​ place.) Calculate GDP. ​$ 15.2 trillion. ​(Enter your response rounded to one decimal​ place.) b. Calculate gross private domestic investment LOADING.... ​$ 3.2 trillion. ​ (Enter your response rounded to one decimal​ place.) c. Based on the above​ information, calculate personal income. ​$ 13.9 trillion.

15.2 15.2 3.2 13.9

Given the cyclical unemployment rate recorded​ above, this translates into actual real GDP deviating from potential real GDP by ​$_______ billion place and use a minus sign if necessary. If actual GDP is below potential​ GDP, enter your answer as a negative​ value.)

198.5

In which of the following periods did nations of the European Union experience the highest average annual rate of growth of per capita real Gross Domestic Product​ (GDP)?

1981-1990

In the figure at​ right, how many bushels of corn are produced at point​ "a"?

2,500

Price Quantity Demanded Quantity Supplied Quantity Supplied After Tax ​$5 10 40 30 ​$4 15 35 25 ​$3 20 30 20 ​$2 25 25 15 ​$1 30 20 5 The demand and supply of a product is given in the above table. A unit tax of​ $2 is imposed on the product. The equilibrium quantity for this product after the tax is imposed is equal to

20 units

Suppose that the government sets a minimum wage of ​$7 per hour. The graph on the right shows this situation. The number of workers who would have been employed at the equilibrium wage but who will now lose their jobs is ________. The number of new workers who will now be willing to supply labor at the new wage but who will not be able to find jobs is _______. Thus total unemployment created by the minimum wage is _____ workers.

200 200 400

How many people are unemployed at this​ wage?

4

Civilian Labor Force Level​ (thousands) Unemployment Rate​ (percent) ​Men: 85,931 _____ ​Women: 75,183 _____ Suppose that a deep and prolonged recession induces some job seekers to discontinue their job search efforts due to the belief that no jobs are available for them. These individuals are known as ________​workers, and an increase in their​ numbers, all else​ constant, will cause the unemployment rates computed above to ________.

4.3 4.0 discouraged decrease

The table to the right shows the distribution of the population aged 16 and older into three​ groups: people who are​ employed, those who are​ unemployed, and those not in the labor force. Suppose that among the 17.0 million unemployed​ people, currently 6.7 million are frictionally​ unemployed, 8.3 million are cyclically​ unemployed, and 2.0million are structurally unemployed. What is the natural rate of​ unemployment? If among the 17.0 million unemployed​ people, 6.7 million are frictionally​ unemployed, 8.3 million are cyclically​ unemployed, and 2.0 million are structurally​ unemployed, then the natural rate of unemployment is _____percent. ​(Enter your response rounded to one decimal​ place.)

5.1

For all employee earnings subject to Social Security​ taxes, what is the current Social Security tax rate for​ employers?

6.2%

How much should a bank charge for a​ loan, if the anticipated inflation rate is 4​ percent, and the bank wants to earn 3 percent on this​ $1,000,000 loan?

7 percent

Lissa purchased stock valued at ​$30,000 in 2000. In​ 2005, she sold the stock for ​$37,500. Lissa​'s capital​ gain, for tax​ purposes, is ​$______​, which is a ______ gain on her investment. Over the period during which Lissa owned her​ stock, asset prices rose by 8​% due to inflation. Thus Lissa​'s real capital gain is ______ , or ​$ _______.

7500 25% 17% 5100

A councilman has offered a counterproposal. In his​ view, the current minimum wage is too low and should be increased to​ $10 per hour. Assuming that the labor demand and supply curves were to remain in their present​ positions, how many people would be unemployed at a​ $10 minimum​ wage?

8 thousand workers.

The following table indicates the supply schedules for four types of​ producers: ​A, B, C​, and D and the number of producers in each group​ (top ​row). The quantity supplied by each type of producer ​(QA​, QB​, QC​, and QD​) is shown for market prices ranging from​ $8 down to​ $2. What is the combined quantity supplied at a market price of ​$5​? Number of producers A​ = 50 B​ = 60 C​ = 30 D​ = 20 Market Price QA QB QC QD ​ $8 6 14 7 13 7 5 12 6 11 6 4 10 3 9 5 3 8 4 7 4 2 6 3 5 3 1 4 2 3 2 0 2 1 1

890

Suppose you are given the following information about a​ country: Frictional unemployment rate 1.04​% Seasonal unemployment rate 0​% Cyclical unemployment rate 3.97​% Structural unemployment rate 4.38​% What is the total unemployment rate for this​ country? _________(Enter your response as a percentage rounded to two decimal​ places.)

9.39%

Market Price A B C D ​$10 0 0 1 1 ​$9 0 1 3 3 ​$8 1 3 6 5 ​$7 5 6 9 10 ​$6 7 7 10 11 ​$5 10 9 12 15 ​$4 14 11 16 20 The table above indicates the demand schedules for four types of consumers. Suppose there are 12 comma 000 ​consumers, evenly divided between the four types of customers above ​(A-​D). The quantity demanded at a price of​ $7 is

90,000

Suppose there are 100 million in the labor​ force, and 6 million unemployed people. During the next​ month, 200,000 people lose their jobs and​ 300,000 find jobs. The new total of employed is​ ________ and the new unemployment rate is​ ________.

94.1​ million; 5.9 percent.

Which of the following is not a key feature shared by nations that attain higher levels of economic​ development?

A large presence of military personnel to ensure that the​ government's views are supported

Which of the following is a final​ good?

A lawn mower purchased by a household

Consider the figure​ 4B-2. If the price is​ $20, find the area that represents producer surplus.

A+B+C

What is the difference between absolute advantage and comparative​ advantage?

Absolute advantage is when someone can produce more of a good using a given quantity of inputs while comparative advantage is when someone can produce a good at a lower opportunity cost.

Which of the following is a true statement about comparing world​ incomes?

Adjusting world incomes for purchasing power gives a more accurate view than using market foreign exchange rates.

A production possibilities curve

All of the above

Demand applies to which of the​ following?

All of the above

Which of the following might be considered a positive​ externality?

All of the above are correct

Which of the following is an example of an application of the ceteris paribus​ assumption?

An analysis of how price changes affect how much of a good people will purchase when all other factors are held constant

Which of the following is true of an excise​ tax?

An excise tax is levied on purchases of particular good or service.

Which of the following is consistent with dynamic tax​ analysis?

An increase in the tax rate will likely cause a decrease in the tax base.

Which of the following is a true statement about​ self-interest as used in the study of​ economics?

Any action can be based on​ self-interest if the person has some reason for the action.

Refer to the figure at right. Which arrows represent items that are measured in dollar​ terms?

Arrows A and D

According to the table at​ right, net domestic product is

$11,811 billion.

In the first stage of manufacturing each final unit of a​ product, a firm purchases a key input at a price of ​$5 per unit. The firm then pays a wage rate of ​$2 for the time that labor is​ exerted, combining an additional ​$3 of inputs for each final unit of output produced. The firm sells every unit of the product for ​$12. What is the contribution of each unit of output to GDP in the current​ year? The contribution of each unit of output to GDP in the current year is

$12

A town in New York currently has a ​$1.50 per unit tax on sales of wine. ​ Annually, 50,000 bottles of wine are​ sold, and so the town collects ​$75 comma 000. The mayor proposes that the tax be increased to ​$2.50 per bottle. If the mayor uses static tax​ analysis, he expects that the new tax revenue will be ​$_______(Round your answer to the nearest​ dollar.) Using dynamic tax​ analysis, it is likely that the tax base will ______ if the tax is​ imposed, and thus the new tax revenue will be _____the tax revenue based on the assumptions of static tax analysis.

$125000 decrease less than

According to the above​ table, Gross Domestic Product is

$14,140.

If Ed had hired the painter and the​ landscaper, how would Ed​'s improvements to the cottage have added to GDP this​ year? The increase in GDP would be

$2250

The cost of a​ nation's market basket in the base year is ​$1 comma 970​, and the current​ year's price index equals 180. What is the cost of the market basket in the current​ year? The cost of the market basket in the current year is ​$_____ ​(Enter your response as a whole​ number.)

$3546

Commodity Market Basket Quantity 2005 Price per Unit Cost of Market Basket in 2005 2015 Price per Unit Cost of Market Basket in 2015 Milk 10 gallon 2.00 20.00 2.50 25.00 Eggs 10 dozen 2.00 20.00 3.00 30.00 Bread 10 loaves 2.00 20.00 3.00 30.00 In the table shown​ above, the total cost of the market basket of commodities in 2005 was

$60.00

The information contained in the table to the right applies to the market for a particular item in the absence of a unit excise tax. ​(Throughout this exercise all numerical responses should be entered as whole​ numbers). According to this​ information, in the absence of a unit excise​ tax, the market price is ​$____ and the equilibrium quantity is _____units. Suppose that the government decides to subject producers of this item to a unit excise tax equal to​ $2 per unit sold. The new equilibrium market price will be ​$___and the new equilibrium quantity is _____

$7 125 $8 100

Suppose you purchased 100 shares of stock in 2010 for​ $25 a share and you sell them today for​ $50 a share. If the capital gains tax is 28​ percent, your tax liability is

$700

Ed has a summer beach cottage that he has owned for many years. The cottage is valued at $ 125 comma 000. This​ year, Ed spends ​$350 on paint and ​$500 on​ trees, and then paints the exterior of the cottage and plants the trees himself. If he had hired a professional​ painter, it would have cost ​$1 comma 000 to paint the cottage​ (not including the cost of​ paint), and if he had hired a professional​ landscaper, it would have cost ​$400 ​(not including the cost of the​ trees) to do the planting. How much does Ed​'s improvements to the cottage add to GDP this​ year? The increase in GDP would be

$850

The following table lists the costs incurred by a student attending a public university for one semester. ​(Note: By attending​ college, the student will have to work fewer hours but will stay in his current​ apartment.) Tuition and Fees ​$4 comma 000 Room and Board ​$1 comma 000 Books and supplies ​$ 550 Lost wages ​$4 comma 500 What is the total opportunity cost that the student incurs by attending college for one​ semester?

$9,050

The following table gives categories for income and expenditures for a representative​ country: Net exports of goods and services negative 450 Net interest paid by business nbsp 360 Government purchases of goods and services 1 comma 350 Gross private domestic investment 1 comma 800 Indirect business taxes nbsp 360 Rental income of individuals plus implicit rent on​ owner-occupied housing nbsp 180 ​Wages, salaries, employee compensation 5 comma 400 Personal consumption expenses 6 comma 300 Depreciation nbsp 720 Proprietorial income nbsp 900 Corporate profits 1 comma 080 Use the data in the table to calculate Gross Domestic Income​ (GDI) for this country. GDI is equal to

$9000

Increasing the earnings of minimum wage employees is​ desirable, and raising the minimum wage is the best way to accomplish this.

Normative economics

Which of the following statement is​ false?

Only the price system can be used to ration goods.

Which of the following would least likely​ be, for the typical​ student, the opportunity cost of attending a class at​ 11:00 a.m.?

Partying with a close circle of friends.

Which of the following is best characterized as a public​ good?

Police protection

economics is​ value-free and relates to statements that can be​ refuted, such as​ "If A, then​ B."

Positive

A higher minimum wage will reduce employment opportunities for minimum wage workers.

Positive economics

Heathcare subsidies will increase the consumption of health care

Positive economics

Refer to the figure at right. How do you describe what is happening as the economy moves from point C to point​ B?

Previously unemployed resources are now being devoted to the production of wool.

Which of the following statements is consistent with a decrease in​ supply?

Prices of raw material inputs have increased.

Which of the following is​ correct?

Real rate of interest​ = (Nominal rate of interest minusAnticipated rate of​ inflation)

_______ prices perform three​ functions: (1) allocating existing scarce housing among competing​ claimants, (2) promoting efficient maintenance of existing houses and stimulating new housing​ construction, and​ (3) rationing the use of existing houses by current demanders.

Rental

Which one of the following is​ true?

Saving enables economic growth by providing for investment in the capital stock.

Why are politicians and economists concerned about the economic growth rate in the​ U.S.?

Small differences in the rate of economic growth can make large differences in the standard of living over time.

Which of the following can cause official unemployment figures to underestimate the true unemployment​ rate?

Some people get discouraged and quit looking for a job.

Which of the following is not a source of funding available to​ governments?

Stock sales.

Which of the following statements is NOT​ true?

Terms of exchange only include situations of barter where the market price is irrelevant.

Which of the following is NOT a criticism of the​ CPI?

The CPI ignores the changes of prices of goods that firms produce and sell to each other.

The table on the right shows four major price indices of the US​ economy: the Consumer Price Index​ (CPI), the Producer Price Index​ (PPI), the Personal Consumption Expenditure Index​ (PCE) and the GDP deflator. All four indices are used to measure inflation. Based on the data from the four indices in the​ table, which price index suggests the highest rate of inflation between the years 2000 and​ 2004, and between 1998 and 1999. What were the corresponding rates suggested by these​ indices?

The PPI indicating the highest inflation rate of​ 10.5% for​ 2000-2004; the CPI indicating the highest inflation rate of​ 2.19% for​ 1998-1999.

What is the structure of the U.S. income tax​ system?

The U.S. income tax system is a progressive tax system where the marginal tax rate exceeds the average tax rate.

Which one of the following is an example of a positive​ statement?

The amount of financial assistance given to farmers is higher this year than it was 10 years ago.

An excise tax of 60 cents is levied on a product. As a result of the​ tax, the price of the product goes from​ $1 to​ $1.40. Which of the following is​ true?

The consumer pays the majority of the tax but not the entire tax.

Suppose that you are investigating the market for aluminum. The price of steel​, a substitute​ good, has decreased. Which of the following would best describe the market reaction to this​ event?

The demand for aluminum ​decreases, which creates a surplus of aluminum​, causing the price of aluminum to decrease.

Which of the following checks issued by the government represents a transfer​ payment?

The federal government pays a retiree her Social Security benefits.

All of the following are characteristics of public goods EXCEPT

The goods are perfectly divisible.

Which of the following characterizes the largest difference between the way decisions are made in the private sector versus the public​ sector?

The incentive system for individuals to perform efficiently are vastly different.

Money Prices 2003 2004 Hospital Room​ (1 day) ​$250 ​$275 Hotel Suite​ (1 night) ​$350 ​$375 Based on the table​ above, which of the following is​ true?

The money prices of both goods​ increased, the relative price of hospital rooms​ increased, and the relative price of hotel suites decreased.

What happens when the government imposes a unit excise tax on a​ good?

The newly taxed​ good's supply curve shifts vertically upward by the amount of the​ per-unit tax being levied.

The market for corn is initially in equilibrium. Suppose the production of​ biofuels, which use corn as an​ input, increases​, and at the same​ time, increases in the price of oil cause farm production costs to rise. Which of the following explains the effect on equilibrium price and quantity in the corn​ market?

The price of corn will rise​, but the effect on equilibrium quantity cannot be determined without more information.

A fall in the demand for e minus book readers follows a change in the price of e minus books comma which are complements. A rise in the demand for tablet devices follows a change in the price of ultrathin laptop computers comma which are substitutes.

The price of the complement increased. The price of the substitute increased.

If the price​ changes, we move along a curvelong dashthere is a change in quantity demanded or supplied. If some other determinant​ changes, we shift a curvelong dashthere is a change in demand or supply.

The supply curve is drawn with other things held constant. If these ceteris paribus conditions of supply​ change, the supply curve will shift. The major ceteris paribus conditions are​ (1) input prices ​, ​(2) technology and productivity ​, ​(3) taxes and subsidies ​, ​(4) expectations of future relative prices ​, and​ (5) the number of firms in the industry .

What condition exists in this​ city's labor market at the present minimum wage of​ $9 per​ hour?

There is a surplus of labor .

Which of the following statements about taxation is​ TRUE?

There is a tax rate at which tax revenues are maximized.

Which of the following statements is​ FALSE?

Transactions in which households buy final goods and services occur in the factor market.

_____________ are payments made to individuals for which no services or goods are rendered in​ return, compared with ___________ ​, which people must direct to spending on specified goods.

Transfer payments income transfers in kind

A model is considered​ "good" if it yields usable predictions that are supported by​ real-world observations.

True

Absolute advantage refers to the ability to produce more units of a good or service using a given quantity of labor or resource inputs.

True

According to economist Paul​ Romer, ideas are what drive economic growth.

True

An import quota is a supply restriction that prohibits the importation of more than a specified quantity of a particular good in a​ one-year period.

True

Corporate profits are subject to double taxation.

True

Much of our legal system is involved with defining and protecting property rights.

True

Rationing by the price system leads to the most efficient use of available resources.

True

The price at which quantity demanded equals quantity supplied and at which the demand curve intersects the supply curve is called the market clearing price.

True

The shapes of the market demand and supply curves determine who pays most of a tax.

True

Unemployment due to the fact that workers must search for appropriate job offers is called frictional unemployment.

True

Voluntary exchange refers to an act of trading between individuals that makes both parties to the trade subjectively better off.

True

A rise in demand is represented by a leftward shift in the demand​ curve, and a fall in demand is represented by a rightward shift in the demand curve.

False

An innovation is the same thing as an invention.

False

Governments that wish to maximize their tax revenues need to assess a high tax rate.

False

Individuals who have stopped looking for a job because they are convinced they will not find a suitable one are classified as unemployed.

False

Scarcity is the same as a shortage.

False

​Today's secular stagnation trend first began in the United States.

False

Labor is a key input at​ fast-food restaurants. Suppose that the government boosts the minimum wage above the equilibrium wage of​ fast-food workers. Which of the following best describes the response of the quantity of labor employed at​ restaurants?

Fewer workers will be employed since the wage increase will induce managers to seek to substitute other inputs for the now relatively more expensive labor.

A true public good must be provided by the government. Which of the following goods provided by the government is a true public​ good?

Flood control

Which of the following statements is​ correct?

GDP excludes nonmarket production and is not a measure of a​ nation's overall welfare.

Which of the following statements is not true about the use of GDP as a measure of national​ welfare?

GDP is a useful measure of national welfare since it excludes nonmarket transactions.

John increases his consumption of Good X and Good Y when his income increases. For John

Good X and Y are normal goods

Refer to the figure at right. Which of the following would allow society to move to point​ d?

Increasing the quantity of labor

Which of the following statements best demonstrates the concept of bounded ​rationality?

Individuals make​ short-run choices that are not consistent with their​ long-term goals.

Which of the following is NOT a stage of development that modern rich nations have gone​ through?

Inflation stage

Which one of the following is​ true?

Investments in secondary education produce gains in the form of economic growth.

A city government imposes a proportional income tax on all people who earn income within its city limits. In​ 2004, the​ city's income tax rate was 0.05 ​(5 ​percent), and it collected ​$20.00 million in income taxes. In​ 2005, it raised the income tax rate to 0.06 ​(6 ​percent), and its income tax collections declined to ​$19.20 million. What happened to the​ city's income tax base between 2004 and​ 2005? What would cause a fall in the tax​ base?

It fell by ​$80 million. Either of the above

How should per capita real Gross Domestic Product​ (GDP) be​ used?

It is a reasonably good measure of productive activity.

The law of supply predicts the supply curve will be

upward sloping

In the labor​ market, adjustments to changes in supply and demand

usually take time to occur.

The dollar value of an​ industry's sales minus the value of intermediate goods is

value added.

Net exports equal the

value of exports minus the value of imports.

Consumer surplus at any specific quantity is measured as the​ ________ distance between the demand curve and the level of the market clearing​ ________.

vertical; price

To derive GDP using the income​ approach, we add up all factor​ payments, including ________, ________ , ________ ​, and _______ .

wages profit interest rent

The largest component of gross domestic income is

wages.

All of the following pairs of goods are substitutes except

we observe the price of bacon increases and the demand for eggs decreases.

All of the following pairs of goods are complements except

we observe the price of coffee decreases and the demand for tea decreases.

The three basic economic questions are​ __________ will be​ produced, __________ will items be​ produced, and for​ __________ will items be​ produced?

what and how​ much; how; whom

When constructing economic​ models, economists are more concerned with

what people do than what they say

Efficiency is achieved

when producers are getting the maximum possible output from the available resources.

Of the​ following, which country has the highest annual real GDP per capita according to the International Monetary Fund and World​ Bank?

United States

Refer to the figure at right. A unit tax has been placed on the good. What is the total amount of the​ tax?

Upper P 2minusUpper P 0.

A shift from Upper S 1 to Upper S 2 reflects the change that happens when a negative externality is taken into account. A shift from Upper D 1 to Upper D 2 reflects the change that happens when a positive externality is taken into account. Refer to the above figures. If a positive externality that existed becomes​ corrected, price and quantity will become

Upper P 4 and Upper Q 4.

Consider the market for a health care service displayed in the figure to the​ right, in which the government currently pays a​ per-unit subsidy, M. If the government raises the value of M to a larger dollar amount per unit of​ service, what will happen to the​ out-of-pocket price paid by​ consumers, the price required to induce suppliers to provide​ services, and the quantity of services​ provided? Will the​ government's total expense for this health care service rise or​ fall? The ​per-unit subsidy,​ M, that the government currently provides for the​ health-care service is equal to the difference between ________

Upper P Subscript s Baseline and Upper P Subscript d

Suppose that the government has raised by​ $10 a​ per-carat tax rate it imposes on diamonds in an effort to influence production of this particular good by each of the firms that produce it and purchases by individual consumers. Would we apply microeconomic or macroeconomic analysis to analyze this policy​ action?

We would apply microeconomic analysis because this policy action would affect decision making undertaken by individuals​ (or households) and by firms.

Which of the following is an example of a positive​ statement?

When the price of an item​ increases, people respond by reducing their consumption of the item.

Price per​ Constant-Quality Unit Quantity Demanded of​ Constant-Quality Units per Year Quantity Supplied of​ Constant-Quality Units per Year ​$1.00 ​1,000 200 2.00 800 400 3.00 600 600 4.00 400 800 5.00 200 ​1,000 According to the above​ table, at a price of​ $1 per​ unit, which of the following would​ exist?

a shortage of 800 units

Strawberries ​(pounds) Price Qd Qs ​$2 ​5,000 ​1,000 ​$4 ​4,000 ​2,000 ​$6 ​3,000 ​3,000 ​$8 ​2,000 ​4,000 ​$10 ​1,000 ​5,000 Consider the above table. Assuming the government imposes a price ceiling on strawberries of​ $4 per​ pound, what would be the likely​ result?

a shortage of​ 2,000 strawberries

A small reduction in a​ country's growth rate is a concern to policy makers because

a small change can have large effects on per capita GDP over time.

Which of the following is the best example of a public​ good?

a streetlight

Inflation is best defined as

a sustained increase in the average of all prices of goods and services in an economy.

Entrepreneurship functions better when

a system of private property rights permits entrepreneurs to capture the rewards from their entrepreneurial activities.

National income accounting is

a system utilized to measure macroeconomic activity.

A specified interval of income to which a specific and unique marginal tax rate is applied is called

a tax bracket.

All of the following will decrease the supply of train trips except

a technological change that makes trains safer and more​ fuel-efficient.

Refer to the figure at right. Point B is known as

a trough

Scarcity implies that

a way of rationing supplies of goods must be found.

A market demand curve is found by

adding the quantities demanded for each individual consumer at each price.

Economists assume that when there is a change in demand​ and/or supply, that prices reach a new equilibrium

after an adjustment period that varies.

Governments may intervene in private markets through

all of the above

Specialization and comparative advantage

all of the above

Scarcity affects

all people

According to the figure at​ right, if the government set a price floor of​ $3.50 per​ gallon, there would be

an excess quantity supplied equal to​ 100,000 gallons.

Pollution produced by a factory is being dumped into a local river. The community uses local funds to clean the river. This is an example of

an external cost as the​ community, not the​ factory, is paying for the clean up.

A situation in which a benefit or a cost associated with an economic activity spills over to third parties is called

an externality.

Which of the following will NOT cause market supply to​ increase?

an increase in the costs of resources used to produce the product

An increase in the price of labor used to produce good A will lead to

an increase in the market clearing price of good A.

Two goods are substitutes when

an increase in the price of one raises the demand for the other.

A production possibilities curve will shift outward or to the right for all of the following reasons EXCEPT

an increase in the unemployment rate.

The law of demand posits ______ relationship between the quantity demanded of a good and its​ price, other things being equal.

an inverse

A point inside a​ society's production possibilities curve represents

an underutilization of productive resources.

To be considered officially​ unemployed, a person must be at least 16 years old

and not working but is actively seeking employment.

Rational behavior for an economist means that individuals

are motivated by selfminus−interest.

Discouraged workers

are not considered part of the unemployed because they are not actively seeking work.

The law of demand states that

as price​ increases, quantity demanded​ decreases, all other things equal.

The law of supply states that

as price​ increases, quantity supplied​ increases, all other things equal.

When did the United States register its lowest unemployment​ rate?

at the end of World War II

The text argues that if avocado growers in Mexico can produce avocadoes cheaper than avocado growers in the United​ States, this will not reduce total jobs available in the United States. The logic underlying this argument is that

avocado growers in the United States will switch to specializing in a crop in which they hold the comparative advantage.

Once we pick a market basket of​ goods, we can construct a price index that compares the cost of that market basket today with the cost of the same market basket in a _____year. The ________Index is the most often used price index in the United States. The _______measures what is happening to the average price level of all​ new, domestically produced final goods and services in our economy. The __________ Index uses annually updated weights from consumer spending surveys to measure average prices faced by consumers.

base Consumer Price GDP deflator Personal Consumption Expenditure

Public schools provide educational services at a price

below the market price.

To an​ economist, a free rider is a person who

benefits from consuming public goods without paying for them.

The opportunity cost of attending a class at​ 11:00 a.m. will likely differ from the opportunity cost of attending a class at​ 8:00 a.m. because

both A and C are correct.

If the government imposes a price ceiling that is lower than the market clearing​ price, then

both consumer surplus and producer surplus will decrease.

According to dynamic tax​ analysis, continually increasing the tax rate will eventually

cause a decrease in the tax base.

An effective price _________ is an enforced regulation that sets the legal price below the market clearing​ price, which often leads to nonprice rationing devices and _______ markets.

ceiling black

Governments sometimes impose price controls in the form of price __________and price ___________

ceilings floors

Cyclical unemployment is caused by

changes in an​ economy's overall condition.

The two opposing sets of answers are offered by alternative economy​ systems: ​ (1) centralized ___________ and​ (2) the ________ system.

command and control price

We measure the demand schedule in terms of a time dimension and in ______ ​-quality units.

constant

One of the most important factors for economic growth to take place is that a society must

consume less than they produce.

If a household purchases a new car and a new​ refrigerator, this would be classified as spending on

consumer durables

The use of goods and services for personal satisfaction is known as

consumption

When​ economy-wide business fluctuations are​ negative, they are referred to as

contractions/recessions.

Effective rent ________ impede the functioning of rental prices. Construction of new rental units is discouraged.

controls

Consider an economy where the natural rate of unemployment is equal to 4​%. If the actual unemployment rate is equal to 8​%, then

cyclical unemployment rate is 4​% .

Microeconomics focuses on

decisions made by individual households and firms.

The sales tax rate applied to all purchases within a state was 0.04​ (4 percent) throughout 2016 but increased to 0.05 ​(5 percent​) during all of 2017. The state government collected all taxes​ due, but its tax revenues were equal to​ $40 million each year. Within this​ state, the sales tax base from 2016 to 2017 must have _______

declined

Publishers expect that the market price of economics textbooks will increase next month. This will cause​ a(n)

decrease in supply

The market price of paper increases. This will cause​ a(n)

decrease in supply

Consider the coffee market shown in the graph at right. An increase in the supply of coffee will​ ________ the equilibrium price and​ _________ the equilibrium quantity.

decrease, increase

The price of a new textbook is​ $120 in one year and is​ $150 two years​ later, while the price of a used copy of the text increased from​ $40 to​ $60. The relative price of a new textbook The relative price of a new textbook

decreased from 3 to 2.5.

The U.S. government spends considerably less on antipollution efforts this year than it did in recent years. As a result of​ this, GDP

decreases

The quality of cancer treatments​ increases, so patients undergo fewer​ treatments, which hospitals continue to provide at the same price per treatment as before. As a result of this GDP

decreases

The law of ______ applies when other​ things, such as income and the prices of all other goods and​ services, are held constant.

demand

According to the​ text, firms encounter rising costs when they attempt to produce more in the same time period. As a​ consequence, they must be offered a higher price to be willing to incur these higher costs. The resulting relationship between price and quantity supplied is

direct​ (or positive) and is called the law of supply.

A person who is currently not working and has stopped looking for a job because he or she is convinced there is no job available is classified as a

discouraged worker

The difference between personal income and disposable personal income is

disposable personal income is what is left after personal income taxes have been paid while personal income includes personal income taxes.

If an analyst has concluded that tax revenues may eventually decline if the tax rate is raised​ sufficiently, this analyst is using

dynamic tax analysis.

New growth theorists conclude that

economic growth can continue as long as we keep coming up with new ideas.

An educated populace contributes to economic growth because

education allows workers to develop skills that increase their productive capabilities.

​Gig-economy employees are considered

employed

The labor force is defined as the number of

employed plus the number of unemployed.

Regarding the figure at​ right, at a price of three​ cents, a(n)​ ________ of bubble gum will exist in the market.

equilibrium quantity

Another name for a shortage is

excess quantity demanded.

The _______ approach to measuring GDP requires that we add up consumption​ expenditures, gross private​ investment, government​ purchases, and net exports. Consumption expenditures include consumer ______, consumer ________​, and _______.

expenditure durables nondurables services

The relative price of a good is that price

expressed in terms of the price of another good.

Costs that spill over to third parties are called

external costs

The economic activities of government include​ (1) correcting for _________​, ​(2) providing a _______, ​(3) promoting _______​, ​(4) producing ________ goods, and​ (5) ensuring _________________ .

externalities legal system competition public economywide stability

Two factories make wooden chairs. If the workers in factory A make each chair from start to finish and the workers in factory B divide​ labor, one would assume

factory B can take advantage of division of labor and produce more efficiently.

​Real-Time Data Analysis Exercise The following table gives unemployment level data by gender from FRED​* for January of 2018. ​*Real-time data provided by Federal Reserve Economic Data​ (FRED), Federal Reserve Bank of Saint Louis. Title Value​ (thousands) Unemployment Level​ - Men 3 comma 658 Unemployment Level​ - Women 3 comma 027 Given that the unemployment level of men exceeds the unemployment level of​ women, it follows that the unemployment rate for men will be higher than the unemployment rate for women. This claim is

false

Many state governments claim a shortage of funds because there are​ "unmet needs." This claim is

false because of scarcity.

In economic​ terminology, a normal good is a good

for which demand increases when income increases.

The natural rate of unemployment when seasonally adjusted includes

frictional and structural unemployment but not cyclical.

After completing​ college, John Smith spent two months looking for a job. During this period he would be classified as

frictionally unemployed.

​Heroin, cigarettes,​ gambling, and cocaine are examples of

government-inhibited goods.

When state and local governments provide public schools with a​ per-unit subsidy to provide educational​ services, the price that the schools providing these services receive is

greater than the market clearing price without the subsidy.

In public​ education, the value of the services provided is

greater than the value that parents and students place on the services.

A family sells the house they have lived in for two years to a friend. They received​ $300,000 and paid​ $200,000 three years ago. This transaction

has no effect on GDP because the house was not made this year

Human beings

have unlimited wants

By using the ceteris paribus assumption in conjunction with a​ model, economists can

hold certain factors constant.

Total market supply can be derived by

horizontally summing individual supply curves at each and every price level.

Because resources are scarce relative to​ wants, the study of economics concerns

how​ individuals, businesses, and governments make choices.

The knowledge and skills that people in the workforce acquire through​ education, on-the-job​ training, and​ self-teaching is referred to as

human capital

All of the following are ways the government can correct positive externalities except

imposing positive taxes.

During the time period assumed by a production possibilities​ curve, it is​ ________ to be at a point outside the curve and​ ________ to be at a point beneath the curve.

impossible; possible

Economic analysis is used

in all decision making

Goods and services are sold

in the product markets.

The potential rewards that are available to an individual if a particular activity is undertaken are known as

incentives.

The two main approaches to measuring GDP are the

income approach and the expenditure approach.

Which of the following does NOT involve transfers in​ kind?

income tax refund

Suppose that the figure to the right applies to the labor market in the state of​ Ohio, in which Upper W Subscript m is the minimum wage established by the federal​ government, and Upper Q Subscript sminusUpper Q Subscript d is therefore​ Ohio's excess quantity of labor supplied as a result of the federal wage minimum. What would happen to​ Ohio's excess quantity of labor supplied if the state were to decide to establish its own minimum wage at a level above the federal​ minimum? If the state of Ohio were to establish its own minimum wage at a level above the federal​ minimum, the excess quantity of labor supplied would

increase

The market price of economics textbooks increases. This will cause​ a(n)

increase in quantity supplied

The number of publishers of economics textbooks increases. This will cause​ a(n)

increase in supply

Consider the​ following: Item ​Price/Last Year ​Price/This Year Hamburgers ​$3.00 ​$4.00 Movies ​$5.00 ​$6.00 The relative price of hamburgers this year has

increased.

To get an accurate measure of GDP using the income​ approach, we must also add ___________ and __________ to those total factor payments.

indirect business taxes depreciation

The largest share of federal government tax receipts is derived from

individual income taxes.

Inflation can cause a misallocation of resources because

inflation​ doesn't proceed evenly which means that people have a difficult time determining when a price change signals a change in relative prices.

An example of an increase in gross private domestic investment spending that also increases Gross Domestic Product​ (GDP) is when

inventories of new cars accumulate on the lots of car dealers.

A production point that lies outside the Production Possibilities Curve​ (PPC)

is currently not attainable.

According to the Bureau of Labor​ Statistics, an unemployed individual whose employment was involuntarily terminated is classified as a

job loser

Natural gas found in Oklahoma is an example of

land

Naturally occurring diamonds are an example of

land

Suppose the price of crude oil used to produce gasoline rises significantly. At the same​ time, consumers purchase hybrid cars in great numbers. In the market for​ gasoline, demand shifts to the​ ________ and supply shifts to the​ ________.

left, left

In a small​ town, a steel mill produces air pollution. If the government does not​ intervene, the equilibrium price of steel will be​ __________, and the equilibrium quantity of steel will be​ __________.

less than the socially optimal​ price, greater than the socially optimal quantity

Economics is an empirical​ science, which means that economists

look for evidence to determine whether the model is useful or not.

A friend wants to learn how the unemployment rate is calculated and how inflation is measured. He asks you which economics course to take and you advise him to enroll in

macroeconomics.

In constructing​ models, economists

make simplifying assumptions.

Voluntary exchange

makes both parties to a trade better off.

Suppose the tax rate on the first​ $10,000 income is 0​ percent; 10 percent on the next​ $20,000; 20 percent on the next​ $20,000; 30 percent on the next​ $30,000; and 40 percent on any income over​ $80,000. Family A has income of​ $40,000. What is the marginal and average tax rate for Family​ A?

marginallong dash20 ​percent; averagelong dash10 percent

Prices provide signals about resource allocation to all individuals in a​ ________ system.

market

The ____________ curve is derived by summing the quantity demanded by individuals at each price.

market demand

Innovation typically increases when

market incentives and private property rights are encouraged.

Consider a nation with a government that does not provide people with property rights for a number of items and that fails to enforce the property rights it does assign for remaining items. Externalities would be ________ common in this nation than in a country such as the United States.

more

The protection of property rights leads to

more capital formation.

​Typically, nominal interest rates and anticipated inflation rates

move in the same direction.

The approach used in the U.S. to measure the​ economy's aggregate performance is

national income accounting.

Public goods are

neither exclusive nor rival.

According to new growth​ theory, economic growth is driven by

new ideas

Opportunity cost is best defined as the _________ ​alternative(s) that must be sacrificed to obtain something or to satisfy a want.

next best

Which of the following is a characteristic of a public​ good?

no individual can be excluded from the benefits of consuming it

Which of the following represents how real GDP is​ calculated?

nominal GDP divided by the GDP deflator

Measuring total aggregate production in current dollars uses which of the following​ measures?

nominal gross domestic product

​"We ought to do more for the education of our​ children." Statements using words like ought or should are

normative statements

In determining how to allocate your​ time,

only comparative​ advantage, but not absolute​ advantage, matters.

Public goods have two​ characteristics: (1) Once they are​ produced, there is no additional _________ when additional consumers use​ them, because your use of a public good does not deprive others of its simultaneous​ use; and​ (2) consumers cannot conveniently be ________on the basis of use.

opportunity cost charged

Economic growth can be defined as the increase in ________real​ GDP, measured by its rate of change per year. The _______ of economic growth are reductions in​ illiteracy, poverty, and illness and increases in life spans and political stability. The _______ of economic growth may include environmental​ pollution, alienation, and urban congestion. Small​ percentage-point differences in growth rates lead to _______ differences in per capita real GDP over time.

per capita benefits costs large

Patents stimulate technological advance by

permitting inventors to capture significant economic rewards through their inventions.

The largest component of GDP by far is

personal consumption expenditures.

The income households actually receive before they pay personal income taxes​ is:

personal income

Incentives are

potential rewards available if a particular activity is undertaken.

Market failures

prevent the price system from attaining economic efficiency.

All of the following cause a shift in the demand curve EXCEPT a change in the

price of the good or service

Suppose Cameron earns $ 100,000 per year but must pay income taxes according to the tax schedule given in the table to the right. According to the​ chart, the income tax Cameron faces is a _________ tax. Assume Cameron has no tax exemptions or deductions. How much in income taxes must Cameron​ pay? Cameron must pay ​$ _________ in income taxes. ​(Enter your response as a whole​ number.) Assume Cameron has no tax exemptions or deductions. What is his marginal tax​ rate? What is his average tax​ rate? ​Cameron's marginal tax rate is ______and his average tax rate is _______. ​(Enter your responses as whole​ numbers.)

progressive 23000 30% 23%

The economic development of a country is dependent on all of the following except

promoting protectionist barriers.

Key taxes at the federal level do not include​:

property taxes

When comparing per capita GDP across​ countries, GDP should be adjusted for

purchasing power parity.

Import quotas are an example of​ government-imposed

quantity restrictions

When the current price of an item is greater than the​ item's market clearing​ price,

quantity supplied is greater than quantity demanded.

Labor productivity is computed as

real GDP divided by the number of workers.

The​ price-corrected value for Gross Domestic Product is

real Gross Domestic Product​ (GDP).

A tax system that applies a lower marginal tax rate at higher levels of income is

regressive

Comparative advantage is always​ a(n) ________ concept.

relative

Air quality improves significantly throughout the United​ States, but there are no effects on aggregate production or on market prices of final goods and services. As a result of​ this, GDP

remains the same

In a rent controlled​ market, we would expect to observe

renters moving into the market to take advantage of the lower rents.

A point inside the PPC means that

resources are not being fully utilized due to unemployment or inefficiency.

The concept of opportunity cost exists because

resources are scarce.

The earnings that a corporation saves for investment in other productive activities are

retained earnings.

The principle of _________ does not apply to public goods as it does to private goods.

rival consumption

State and local governments receive most of their revenue from

sales and excise​ taxes, revenue from the federal​ government, and property taxes.

For​ substitutes, a change in the price of a product will cause a change in demand in the​ ________ direction for the other good. For​ complements, a change in the price of a product will cause a change in demand in the​ ________ direction for the other good.

same; opposite

If economists are making the assumption that business people try to maximize​ profits, the best way to determine whether this assumption is useful or not is to

see whether it generates accurate predictions about the choices of business people.

The division of productive activities among persons and regions so that no one individual or region is totally​ self-sufficient is known as

specialization

Which of the following is NOT a transfer​ payment?

spending on national defense

The federal corporate income tax structure results in double taxation because

stockholders pay taxes on dividends that were already taxed as profits of the corporation.

If a person loses her job because her abilities and skills are a poor match with current requirements of​ employers, this person is considered

structurally unemployed.

In any given​ market, prices are determined by

supply and demand

A decrease in the number of pizza producers or an increase in the cost of mozzarella cheese used to make pizza will shift the

supply curve for pizza inward.

If producers must receive a higher price to be induced to produce any​ quantity, we can conclude that

supply decreased

Which of the following is an effect of a minimum wage law that establishes a wage floor above the current market clearing​ wage?

surplus​ labor, or unemployment

A proportional​ tax, or​ flat-rate tax

takes the same percentage of a​ person's taxable income in tax regardless of their level of income.

The distribution of tax burdens among various groups in society is known as

tax incidence.

Over the long​ run, the fundamental funding sources for the government are

taxes

The government could best correct this externality by _____________

taxing the production of steel

The new growth theory argues that

technology must be considered a separate factor of production that is sensitive to economic incentives.

According to data shown on the graph on the​ right, it is clear that the labor force participation rates for men and women in the US

tended to converge over almost the entire period.

Economics is concerned with choices

that involve the wants of individuals.

A student has a job that pays a wage rate of​ $10 per hour. The night before an economics​ exam, the student has set aside four hours to study for the​ exam, estimating that for each hour spent​ studying, her grade will rise by 5 points. That​ night, she gets a call from her employer to come to work for a wage rate of​ $15 per hour for that night. She decides to work for three hours and earn an extra​ $45.00. The next day she takes the test and gets a grade of 75. The opportunity cost for her work is

the 15 extra points she estimates that she could have earned on the exam if she had studied the extra three hours.

When determining the production possibilities curve

the amount of productive resources remains constant.

The division of labor refers to

the assignment of different workers to different tasks.

To determine the amount of time that a person will decide to devote to watching online videos each​ week, an economist makes the assumption that the individual will feel overwhelmed by the sheer volume of videos available online and will respond by using a rule of thumb. In examining the above​ decision-making process, the approach that the economist is following can best be described as the one that relies on

the assumption of bounded rationality.

An economic model is developed from a set of assumptions about consumer behavior and predicts that people will buy less of a good the higher the price of the good. Empirical testing of this model would involve

the collection of data to evaluate the usefulness of the model.

The menu cost of inflation involves

the costs associated with changing price lists.

An increase in demand occurs when

the demand curve shifts to the right.

When income​ falls,

the demand for an inferior goods rises.

Greater economic growth is shown as

the distance the production possibilities curve shifts outward.

An import quota for sugar results in an increase in

the domestic market price of sugar.

Production is efficient when

the economy cannot produce more of one good without giving up the production of another good.

If demand decreases and supply​ increases,

the equilibrium price will​ decrease, but the change in the equilibrium quantity cannot be determined without more information.

Gross Domestic Product​ (GDP) figures may understate the value of goods and services due to

the exclusion of the underground economy.

If the farmer is producing​ 5,000 bushels of soybeans at point​ "b" in the figure at​ right, we know that

the farmer is not using his resources efficiently.

An effective price ceiling occurs when

the government sets a maximum price for a good below the equilibrium price.

Which of the following is NOT studied in​ microeconomics?

the impact of government spending on the unemployment rate

According to the theory of public​ choice, the employees of Kodak and employees of the State of Washington should act differently because

the incentives facing them are different.

Some people claim that the​ "economic way of​ thinking" does not apply to issues such as health care. All of the following choices clearly demonstrate how economics applies to this​ issue, except when

the individual decides against health care as it may make him better off.

Structural unemployment results when

the introduction of a product substitute leads to a large decline in the market demand for a product so that workers specializing in the production of that product find themselves out of work.

Human capital is

the knowledge and skills that people in the work force acquire through education and training.

According to new growth​ theorists, increased population growth rates can lead to faster economic growth because

the larger the market the more incentive there is to innovate.

Under progressive​ taxation, as a​ person's taxable income​ increases,

the marginal tax rate is always above the average tax rate.

Scalping and other black market activities arise when

the prices of goods are restricted to levels below equilibrium prices.

The theory of public choice is the study of

the process through which​ voters, politicians, and other interested parties interact to influence nonmarket choices.

The curve that represents all possible combinations of goods that can be produced is called

the production possibilities curve.

This is because at a wage of​ $6 per hour

the quantity demanded of workers is higher than the quantity supplied of workers.

In evaluating the price that an individual will be willing to pay for a given quantity of a particular type of health care​ service, a researcher assumes that the person considers all relevant health care options in pursuit of his own​ long-term satisfaction with resulting health outcomes. In examining the above​ decision-making process, the approach that the researcher is following can best be described as the one that relies on

the rationality assumption.

Which of the following transactions is included in​ GDP?

the sales of houses produced in that given year

When a government increases an effective price ceiling for a product

the shortage in the market will be reduced.

Economics is

the study of how limited resources are allocated to satisfy unlimited wants.

Personal income is

the sum of all incomes received by households.

Consumer surplus is

the total difference between the total amount that consumers would have been willing to pay for an item and the total amount that they actually pay.

As more new domestic oil production has​ occurred, demand for oil storage space has increased because

the traditional means of domestic transport have proved insufficient to handle the expanded flow of domestic oil production.

A direct relationship occurs when

the two variables being compared change in the same​ direction, or when one goes up the other also goes up

Labor productivity can be increased if

there is an increase in capital goods.

Refer to the figure at right. If a price ceiling of​ $3 was​ set,

there would be a shortage of 20 units.

Entrepreneurs are important to market economies because

they engage in risk taking and innovation.

Opportunity cost is defined as

the​ highest-valued, next-best alternative that must be given up to obtain something.

Everyone should enjoy open access to healthcare.

Normative economics

A price ceiling set below the market clearing price will tend to cause which of the​ following?

a shortage

Regarding the law of​ supply, which of the following statements is​ correct?

As the price of a good or service​ rises, the quantity supplied will increase.

Using the figure at​ right, which of the lines in the above diagram represents a proportional​ tax?

B

Using the figure at​ right, if the government levies a new unit tax in this​ market, S represents the original supply​ curve, and Upper S Subscript t represents the​ after-tax supply​ curve, then the revenues that the government collects from imposing this tax is represented on this graph by

BAEC

Why do very small differences in annual growth rates amount to big differences in the degree of​ long-term economic​ growth?

Because the annual growth rate is compounded over time.

Which of the following could account for this change in the tax​ base?

Both A and C

Which of the following are examples of the gross private domestic investment component of Gross Domestic Product​ (GDP)? I. The purchase of production machinery II. An increase in finished goods inventory

Both I and II

Which of the following is a true statement concerning economic​ growth?

Changes in per capita real GDP are used to measure economic growth because inflation and population growth can distort nominal GDP figures or total GDP figures.

Who is most likely to benefit from rent​ controls?

Consumers who are able to obtain apartments at the controlled rents

Following adjustments to a new equilibrium in a​ market, the equilibrium quantity remains​ unchanged, but the market clearing price is now lower. Which of the following could definitely have caused this​ outcome?

Demand​ decreased, and supply increased.

Which of the following statements is NOT true about​ inflation?

During an inflationary​ period, the prices of all goods will increase.

Which of the following statements is​ FALSE?

Economic goods are available in desired quantities at a zero price.

The modification of manufacturing processes so as to reduce the resulting environmental damage is an endeavor that requires capital​ investment, labor​ inputs, and technology. What then follows from this​ statement?

Economic growth can benefit the environment.

Which of the following is not a true statement about the impact of immigration on economic​ growth?

Economists agree that population growth through immigration is a drain on the economy because it lowers per capita GDP.

economics involves​ people's values and typically uses the word should.

Normative

Until​ 2008, the people of the fictitious nation of Dor relied mainly on private car companies to determine how many automobiles to produce. After​ 2008, the people of Dor have been relying on the Dor government to determine how many automobiles to produce. This represents a shift in the economic system of Dor from

Market System to Central Planning.

In the widget​ market, it is known that producers are relatively responsive to price​ changes, as compared to consumers. The government places a​ $5 per unit tax on sales of widgets. Which of the following is the most likely​ result?

Most of the tax will be paid by consumers.

​Directions: Click on the graph to the right and select Multiple Plots. Then select RGDP​ (real chain weighted​ GDP) for Y1 and NGDP​ (nominal GDP) for Y2. Roll your cursor over each plotted line to identify the data. The values of NGDP for the years 1981 and 1982 are​ $3.1284 and​ $3.255 trillion, respectively. The values for RGDP for 1981 and 1982 are​ $5.2917 and​ $5.1893 trillion, respectively. According to the graph of NGDP and RGDP and the values of the two time series variables for 1981 and​ 1982, it is correct to state that

NGDP has always been​ increasing, but RGDP has been both increasing and decreasing. Between 1981 and​ 1982, NGDP increased by​ $.1266 trillion, corresponding to a rate of growth of​ 4.05%. RGDP decreased by​ $.1024 trillion, corresponding to a negative rate of growth of​ 1.94%.

Gross Domestic Product​ (GDP) =​ $13.0 trillion, consumption​ = $9.5​ trillion, depreciation​ = $1.8​ trillion, other business income adjustments less indirect business taxes​ = $0.2​ trillion, and net U.S. income earned abroad​ = $0.1 trillion. Use this information to calculate national income​ (NI).

NI​ = $11.5 billion

What economic growth theory examines the factors that determine why​ technology, research, and innovation are undertaken and how they​ interact?

New growth theory

An external​ cost, such as the cost generated by​ pollution, is

a cost paid by a third party or by society at large.

All of the following reduce the transaction costs for consumers EXCEPT

a court decision regarding product safety.

Other things held​ constant, an increase in consumption spending implies

a decline in saving.

Suppose we observe the following two simultaneous events in the market for fish.​ First, there is a decrease in the demand for fish due to changes in consumer tastes. And​ second, there is a reduction in seafood supply due to oil spills in the oceans. We know with certainty that these two simultaneous events will cause which of the​ following?

a decrease in the equilibrium quantity and an indeterminate change in the equilibrium price

An increase in demand for a good can be caused by

a decrease in the price of a complementary good.

Consider in the graph to the right the demand curve for bananas. The movement from point A to point B could have been caused by

a decrease in the price of bananas.

An increase in quantity demanded is caused by

a decrease in the price of the good.

High economic growth of a country refers to

a large increase in per capita real Gross Domestic Product​ (GDP).

An example of ad valorem taxation is

a luxury tax

The impact of an increase in the gasoline tax on SUV sales is

a microeconomics topic because it deals with one industry

When the president says that​ "High inflation rates are a much more serious economic problem than high unemployment​ rates," it is an example of

a normative statement.

Orchards provide services to beekeepers because the bees use the pollen to make honey. This is an example of

a positive​ externality, and too few orchards exist in society.

A ad valorem sales tax can be thought of as

a proportional tax.

All other factors held​ constant, a reduction in price tends to cause which of the​ following?

a reduction in quantity supplied and an increase in quantity demanded.

When an employee at a grocery store scans the price of your​ items, bags the​ groceries, and collects your​ paper, the individual has provided

a service

Suppose that in the figure to the​ right, a nation currently has sufficient resources to produce combinations located along only the innermost production possibilities​ curve, labeled A. In​ addition, suppose that the​ nation's residents have determined that smartphones function mainly as consumption goods while tablet devices function primarily as capital goods. If the nation produces no additional tablets this​ year, will the​ intermediate-shifted PPC resulting from minimal economic​ growth, labeled​ B, or the​ farthest-shifted PPC caused by more significant economic​ growth, labeled​ C, be more likely to apply next​ year? If the nation produces no additional tablets this​ year, the PPC that will be more likely to apply next year will be

the​ intermediate-shifted PPC because there would be relatively fewer capital goods available to produce larger quantities of consumer goods next year.

Other things being​ constant, the only way to move along a given supply curve for a product is for

the​ product's relative price to change.

When a Canadian citizen enjoys military protection in Canada without contributing to the cost of​ Canada's defense​ budget, then

this Canadian citizen is a free rider.

Widespread measles vaccinations provided a significant external benefit because

those who failed to obtain vaccinations remained unexposed to measles as a result of others getting vaccinated.

Durable consumer goods are goods that last more than

three years.

A government subsidy is typically used

to correct a positive externality.

The simple circular flow model shows that

total income received by households must be equal to the dollar value of all goods and services produced.

National income is income earned by all U.S. factors of production.

true

A key limitation of using GDP to gauge the overall flow of economic activity occurs because of

underground transactions such as exchanges that people intentionally attempt to hide.

Unemployment statistics are often criticized for

understating the number of people out of​ work, because discouraged workers are excluded in the statistics.

A government is considering two alternative plans for providing subsidy to private schools. Under the first plan it offers to let a number of students at a public school transfer to a private school under two​ conditions: It will transmit to the private school the same​ per-pupil subsidy it currently provides the public​ school, and the private school will be required to admit the students at a below market tuition rate. Under the second​ plan, the government will simply provide the students with grants to cover the current market tuition rate at the private school. ​( Hint: Does it matter if schools receive payments directly from the government or from the​ consumers?) The outcomes of the two plans

will be​ different; under the first plan where a private school directly receives the​ subsidy, it will provide a quantity of educational services in excess of the market equilibrium quantity.

Saving is important for economic growth because

without​ saving, there cannot be​ investment, and without​ investment, there will be less economic growth.

For​ modern, rich​ nations, the three stages of development​ (in order of​ occurrence) are

​agriculture, manufacturing, and services.

Since the​ 1960s, public spending on education has​ _________, while student performance has​ ______________.

​increased, remained constant or declined

Factors of production include

​land, labor, physical​ capital, human capital and entrepreneurship.

Economics is the study of how people allocate their​ ________ resources in an attempt to satisfy their​ ________ wants. As​ such, economics is the study of how people make choices.

​limited; unlimited

Which group of individuals most likely benefits from rent​ controls?

​upper-income professionals who rent apartments at the price ceiling rate

You can​ wash, fold, and iron a basket of laundry in two hours and prepare a meal in one hour. Your roommate can​ wash, fold, and iron a basket of laundry in three hours and prepare a meal in one hour. The absolute advantage in laundry is held by​ ____ and in meal preparation by​ ____

​you; neither.

The comparative advantage in laundry is held by​ ____ and in meal preparation by​ ____

​you; your roommate.


Set pelajaran terkait

The Process of Technological Change

View Set

Property Policy Provisions & Contract Law

View Set

NURS 315 Exam 4 Questions from LM and Cranial Nerves

View Set

CONVERSION AND DOSAGE CALCULATION DRILLS

View Set