Econ exam yuhhhh

What is quantity supplied? a. It is the amount of an item that a seller is willing to sell at a particular price. b. It is a graph that plots the quantities of an item that a seller plans to sell at different prices. c. It is a graph that plots how much a seller produces at different points in time. d. It is the amount of an item that a buyer is willing to buy at a particular price.

It is the amount of an item that a seller is willing to sell at a particular price.

The consumer price index is an index that tracks the: a. average price that consumers pay over time for a representative basket of goods and services. b. highest prices consumers pay over time for imported goods and services. c. price that businesses pay over time for the inputs used in the production process. d. price of all goods and services produced domestically.

average price that consumers pay over time for a representative basket of goods and services.

The principle that your best choice depends on your other choices, the choices others make, developments in other markets, and expectations about the future is known as the _____ principle. a. opportunity cost b. marginal c. interdependence d. cost-benefit

c. interdependence

To maximize production, people should a. focus on the task in which they have a comparative advantage. b. focus on the task in which they have an absolute advantage. c. learn all the skills so that they can perform any task needed. d. focus on improving their weakest skills.

focus on the task in which they have a comparative advantage

The U.S. Department of Education sponsors the i3 program (Investing in Innovation), which provides grants to educational institutions and schools that have a proven track record of high student achievement. This is an example of a government program designed to build: a. human capital. b. physical capital. c. labor resources. d. physical factories and plants.

human capitol

Enforceable property rights encourage economic growth by encouraging: a. investment. b. the sale of property rights. c. the growth of human capital. d. depreciation.

investment

The slope of the consumption function is equal to a. marginal propensity to invest. b. marginal propensity to import. c. average level of consumption over time. d. marginal propensity to consume.

marginal propensity to consume.

Intergenerational mobility is the extent to which: a. the geographic dispersion of families occurs as children pursue economic opportunities. b. the income of children in a given family varies across the children. c. the economic status of children is independent of the economic status of their parents. d. children own more personal transportation vehicles (such as cars and motorcycles) than their parents did.

the economic status of children is independent of the economic status of their parents.

Which principle tells you that the true cost of something is the next best alternative you have to give up to get it? a. The opportunity cost principle. b. The marginal principle. c. The cost-benefit principle. d. The interdependence principle.

The opportunity cost principle.

When quantity demanded exceeds quantity supplied, _____ exists. a. a surplus b. a shortage c. fixed demand d. equilibrium

a shortage

The __________ suggests, decisions about quantities are best made incrementally. a. marginal principle b. opportunity cost principle c. cost-benefit principle d. interdependence principle

a. marginal principle

When a U.S. consumer buys Canadian maple syrup at the grocery store, this purchase is: a. an export. b. a transfer payment. c. an import. d. gross domestic product.

an import

Equilibrium in the loanable funds market determines the: a. point where there is excess demand for loanable funds. b. equilibrium real interest rate. c. amount of inventories in an economy. d. up-front cost of capital.

equilibrium real interest rate.

The concept of equity focuses on: a. efficiency. b. fairness. c. the level of economic surplus. d. profit.

fairness

Menu costs are the: a. marginal costs of adjusting prices. b. variety of costs that cause producers to change their prices. c. total costs of producing goods and services. d. costs of producing restaurant meals.

marginal costs of adjusting prices

A market is a . a place where governments decide what is sold. b. set of supply curves for a product. c. set of demand curves for a product. d. setting that brings together potential buyers and sellers.

setting that brings together potential buyers and sellers.

The three major pillars of the financial sector are the: a. foreign exchange market, the bond market, and the government. b. stock market, the bond market, and the banks. c. stock market, the labor market, and the bond market. d. banks, the goods market, and the labor market.

stock market, the bond market, and the banks.

The law of demand refers to a. the positive relationship between price and quantity demanded. b. the positive relationship between price and quantity supplied. c. the inverse relationship between price and quantity supplied. d. the inverse relationship between price and quantity demanded.

the inverse relationship between price and quantity demanded.

Human capital refers to: a. work done by machinery. b. machines that have artificial intelligence. c. worker skills and knowledge. d. money earned by workers in businesses.

worker skills and knowledge

$200.33 billion.

The table contains information about Pfizer's stock. How much is Pfizer, as a company, worth? a. $200.33 billion. b. $36 billion. c. $36.22. d. $35.86.

Which of the scenarios represents consumption spending? a. You take out a bank loan. b. A new hospital is constructed in your town. c. You eat at a fancy restaurant for Valentine's Day. d. Your parents pay their income taxes.

You eat at a fancy restaurant for Valentine's Day.

On a market graph, producer surplus is the area that is a. above the supply curve and below the price. b. below the demand curve. c. above the demand curve. d. above the demand curve and below the supply curve.

above the supply curve and below the price

Which of the following is a source of comparative advantage? a. abundant inputs b. low trade costs c. global supply chains d. low tariff rates

abundant inputs

Future value is the: a. sum of all present values for a portfolio of savings instruments. b. total amount of interest paid on a loan by a future date. c. amount that your money will grow into by a future date as a result of earning interest. d. equivalent of present value divided by the real interest rate.

amount that your money will grow into by a future date as a result of earning interest.

Sunk costs are costs that a. are incurred in the past and cannot be reversed. b. are part of the opportunity costs of a decision. c. should be considered in any decision. d. are potential costs associated with a particular decision.

are incurred in the past and cannot be reversed.

GDP is defined as the: a. market value of all final goods and services produced within a country in a given year. b. value of all output produced by businesses within a country in a given year. c. market value of all consumer goods purchased within an economy. d. value of all intermediate goods produced within a country in a given year.

market value of all final goods and services produced within a country in a given year.

Holding all else constant, if people eat out more at expensive restaurants when they earn more, then expensive restaurant meals are a. goods with a network-effect. b. goods with a congestion-effect. c. normal goods. d. inferior goods.

normal goods

The CPI changes from 100 to 125. This means that: a. overall prices are now 25% higher than they used to be. b. the GDP deflator has also risen from 100 to 125. c. consumers are now able to purchase 25% more goods and services. d. the base year index has changed from 100 to 125.

overall prices are now 25% higher than they used to be.

An equilibrium price is a price where the a. quantity demanded no longer changes. b. quantity supplied equals the quantity demanded. c. demand curve is identical to the supply curve. d. amount that buyers are willing to buy is equal to the amount that buyers are able to buy.

quantity supplied equals the quantity demanded.

Investment refers to: a. spending on financial assets such as stocks. b. saving money in banks. c. spending on physical capital. d. depreciation of capital stocks.

spending on physical capital

Suppose that a CPI basket includes avocadoes, pineapples and oranges. Avocadoes become very expensive, and consumers substitute away from avocadoes and buy hummus instead. If the CPI basket does not change to reflect the move away from avocados, the result is: a. understated inflation. b. quality bias. c. the failure to capture real variables versus nominal variables. d. substitution bias.

substitution bias

What is the Federal Reserve's mandate? a. to ensure that interest rates remain low all the time b. to print as many dollars as possible without causing inflation c. to encourage inflation and raise unemployment d. to ensure maximum employment while maintaining stable prices

to ensure maximum employment while maintaining stable prices

How is monetary policy different from fiscal policy? a. Monetary policy adjusts interest rates, whereas fiscal policy adjusts government spending and taxes. b. Monetary policy focuses on correcting inflation, whereas fiscal policy focuses on unemployment. c. There is no difference between the two policies. d.Monetary policy is determined by the president, whereas fiscal policy is determined by the chair of the Federal Reserve.

Monetary policy adjusts interest rates, whereas fiscal policy adjusts government spending and taxes.

An excise tax is a tax on: a. purchases that is typically a percentage of the purchase price of goods and services. b. imports. c. a specific product. d. luxury goods and services

a specific product

A "final" good or service is one that is: a. not for sale. b. not being produced for the market. c. intermediate and ready to be used as an input. d. finished and ready for the final user.

finished and ready for the final user

a. an increase in quantity demanded.

(Figure: Graph) Refer to the graph to answer the question. The movement from point M to point N represents: a. an increase in quantity demanded. b. an increase in demand. c. a decrease in quantity demanded. d. a decrease in demand.

An underemployed person is one who is: a. working but whose skills are not fully utilized. b. retired or outside of the labor force. c. employed in the underground economy. d. cyclically unemployed.

working but whose skills are not fully utilized.

Shifts in demand a. always lead to increases in equilibrium quantity. b. lead to price and quantity to move in opposite directions. c. lead to price and quantity to move in the same direction. d. always lead to increases in equilibrium price.

. lead to price and quantity to move in the same direction.

an increase in demand.

Figure: Graph) Refer to the graph to answer the question. In the graph, the movement from point M to point Q represents a. a decrease in quantity demanded. b. an increase in demand. c. a decrease in demand. d. an increase in quantity demanded. same picture as last question

What is the difference between microeconomics and macroeconomics? a.Microeconomics is the study of individual decisions in specific markets, whereas macroeconomics is the study of the economy as a whole. b.Microeconomics focuses only on the forces of individual demand and individual supply, whereas macroeconomics focuses only on policy making for the economy. c.Microeconomics is the study of the economy as a whole, whereas macroeconomics is the study of individual decisions in specific markets. d.Microeconomics is the study of individual decisions in specific markets, whereas macroeconomics is the study of government policies.

Microeconomics is the study of individual decisions in specific markets, whereas macroeconomics is the study of the economy as a whole.

The aggregate production function is represented as: a. H = f(L, Y, K). b. K = f(L, H, Y). c. Y = f(L, H, K). d. L = f(Y, H, K).

Y = f(L, H, K).

When a manager uses comparative advantage to assign tasks in a workplace, then each a. task is assigned to the worker with the lowest opportunity cost for performing the task. b. worker learns how to do all tasks to increase flexibility in assignments. c. worker is assigned to the tasks for which he or she has the highest aptitude and efficiency. d. task is assigned to the worker who is best at doing the task.

a task is assigned to the worker with the lowest opportunity cost for preforming a task

The loanable funds market is the market for: a. retail goods and services. b. machines. c. wholesale goods and services. d. funds used to buy, rent, or build capital.

funds used to buy, rent, or build capital.

The person who has an absolute advantage in a task a. is the person who should do the task. b. is the one who is best at the task. c. can perform the task at a higher opportunity cost than anyone else. d. can perform the task at a lower opportunity cost than anyone else.

is the one who is best at the task

The federal funds rate is the: a. nominal interest rate that banks pay on overnight interbank loans. b. interest rate on loans from the Federal Reserve's discount window. c. nominal interest rate minus the inflation rate. d. interest rate the public pays on loans from banks.

nominal interest rate that banks pay on overnight interbank loans.

Analysis based on value judgments is called _____ analysis. a. valuative b. normative c. positive d. subjectivity-based

normative

The labor force participation rate is the: a. number of unemployed divided by the number of employed. b. percentage of the labor force that is unemployed. c. percentage of the working age population that is either employed or unemployed. d. sum of the employed and the unemployed.

percentage of the working age population that is either employed or unemployed.

The Producer Price Index is an index that tracks the: a. average price that consumers pay over time for a representative basket of goods and services. b. price that businesses pay over time for the inputs used in the production process. c. price of all goods and services produced domestically. d. highest prices consumers pay over time for imported goods and services.

price that businesses pay over time for the inputs used in the production process.

A market's deadweight loss is calculated as: a. the economic surplus at the efficient quantity minus the economic surplus at the actual quantity. b. the loss to consumers when a product malfunctions or fails to meet expectations. c. the price at equilibrium minus the price at actual quantity. d. the economic loss that a firm has when it is not producing its profit-maximizing output.

the economic surplus at the efficient quantity minus the economic surplus at the actual quantity.

The law of supply refers to a. the inverse relationship between price and quantity demanded. b. the positive relationship between price and quantity demanded. c. the positive relationship between price and quantity supplied. d. the inverse relationship between price and quantity supplied.

the positive relationship between price and quantity supplied.

What is social insurance? a.It is the cash-assistance, goods, and services provided by the government to better the lives of those at the bottom of the income distribution. b.It is a system where those with more income tend to pay a higher share of their income in taxes than those with lower incomes. c.It is government-provided financial funding to households to compensate for bad outcomes such as unemployment, illness, disability, or outliving their savings. d. It is the government assignment of jobs to individuals based on household need and employee education and skills.

.It is government-provided financial funding to households to compensate for bad outcomes such as unemployment, illness, disability, or outliving their savings.

Barlow and Rusia own a nail salon. A manicure takes Barlow 60 minutes to complete and takes Rusia 45 minutes to complete. Completing a pedicure takes Barlow 45 minutes and takes Rusia 30 minutes. Who has a comparative advantage in pedicures? a. Barlow because he is faster. b. Rusia because she is faster. c. Rusia because she has a lower opportunity cost. d. Barlow because he has a lower opportunity cost.

Rusia because she has a lower opportunity cost.

The working age population includes people who are: a. age 16 or older. b. age 16 or older who are not in the military or institutionalized. c. not in the military or institutionalized. d. not retired.

age 16 or older who are not in the military or institutionalized.

Credit constraints limit the: a. amount of saving that people can make. b. amount of money that banks can accept as deposits. c. interest rates that banks can charge. d. amount of money that people can borrow.

amount of money that people can borrow.

Market failure occurs when market forces lead to: a. an inefficient outcome. b. high price. c. high quantity. d. a marginal benefit that is equal to marginal cost.

an inefficient outcome.

A mutual fund is a fund that: a. buys a variety of assets, including land and precious metals, for companies. b. is owned by the government. c. buys a portfolio of stocks and bonds on your behalf. d. consists of only international assets.

buys a portfolio of stocks and bonds on your behalf.

Frictional unemployment is unemployment: a. due to a temporary downturn in the economy. b. that occurs because wages don't fall to bring labor demand and labor supply into equilibrium. c. that occurs because of seasonal changes. d. due to the time it takes for employers to search for workers and for workers to search for jobs.

due to the time it takes for employers to search for workers and for workers to search for jobs.

Which of the following is an investment? a. Mary buys $4,000 worth of Alibaba stock. b. Cameron saves $400 in his savings account. c. Marios builds a new house. d. Dale purchases a house that was built in 1940.

Marios builds a new house

Which of the following is a social insurance program in the United States? a. earned income tax credit b. Social Security c. housing assistance d. Medicaid

Social security

A production function is: a. a method by which outputs can be recycled to produce inputs. b. the amount of money generated from selling outputs. c. a method through which inputs can be turned into outputs, given the available resources. d. the sum of total production possibilities, if resources were unlimited

a method through which inputs can be turned into outputs, given the available resources.

Due to a decline in demand and popularity, Ford Motor Company is planning to phase out traditional sedans such as 'Fusion' and 'Taurus' to focus on SUVs and trucks. Ford's sedans and trucks/SUVs are a. substitutes-in-production. b. complements-in-production. c. inputs in production. d. products that do not follow the law of supply.

a. substitutes-in-production.

The liquidity of an asset is defined as the: a. ability to quickly and easily convert the asset to cash, with little or no loss in value. b. ability to predict the future cash flow of the asset. c. risk that if you need to sell the asset quickly, you may not be able to get a good price for it. d. ability to index the asset's returns to the inflation rate.

ability to quickly and easily convert the asset to cash, with little or no loss in value.

In a market graph, consumer surplus is the area: a. below the demand curve. b. above the price and below the demand curve. c. between the demand curve and the supply curve. d. above the price.

above the price and below the demand curve

A trade cost is: a. the difference in price between a good that is bought or sold abroad rather than domestically. b. the cost associated with producing a good that is bought or sold abroad. c. an extra cost incurred as a result of buying or selling a good abroad rather than domestically. d. the price of a good that is bought or sold abroad.

an extra cost incurred as a result of buying or selling a good abroad rather than domestically.

The cost-benefit principle states that a decision should be pursued only if the a. benefits are positive. b. costs are negative. c. costs are greater than the benefits. d. benefits are greater than the costs.

benefits are greater than the costs.

The "market value" of a good or service refers to the: a. total market demand for that good or service. b. units of that good or service that are purchased by consumers. c. current dollar value of that good or service. d. units of that good or service that are produced in the current period.

current dollar value of that good or service

Depreciation refers to the: a. fall in the price of output that the business produces. b. decline in the quality of output produced by a business. c. spending by a business on new capital assets. d. decline in capital due to wear and tear, obsolescence, accidental damage, and aging.

decline in capital due to wear and tear, obsolescence, accidental damage, and aging.

A bank can make money by: a. borrowing money from the government at 0% interest. b. giving you a particular interest return on your savings and then loaning out the same money at a lower rate of interest. c. storing and locking away all the deposits made by consumers. d.giving you a particular interest return on your savings and then loaning out the same money at a higher rate of interest.

giving you a particular interest return on your savings and then loaning out the same money at a higher rate of interest.

Discretionary spending is spending that: a. includes all state and local government spending. b. includes all federal government spending. c. supports programs that do not get determined annually but instead are set in law. d. is appropriated by Congress annually.

is appropriated by Congress annually.

Diminishing marginal benefit: a. is not important in determining a consumer's purchase decision. b. is when buying an additional item yields a smaller marginal benefit than the previous item. c. is when consumers do not follow the rational rule. d. is when buying an additional item yields a larger marginal benefit than the previous item.

is when buying an additional item yields a smaller marginal benefit than the previous item.

Forward guidance occurs when the Federal Reserve: a. provides information about current monetary policy in order to influence expectations about future interest rates. b. follows the same future course of monetary policy that it has been following in the past. c.provides information about the future course of monetary policy in order to influence expectations about future interest rates. d. carries out open market operations to influence future interest rates.

provides information about the future course of monetary policy in order to influence expectations about future interest rates.

If the price of jet fuel rises, the a. supply of airline flights increases. b. quantity supplied of jet fuel increases. c. supply of jet fuel decreases. d. supply of jet fuel increases.

quantity supplied of jet fuel increases.

Government-provided financial funding to households to compensate for bad outcomes such as unemployment, illness, disability, or outliving your savings is known as a: a. disaster relief program. b. social insurance system. c. social safety net. d. progressive tax system

social insurance system.

In Canada, all the provinces provide health care to all citizens and permanent residents. This is an example of: a. an item that counts toward GDP. b. taxes. c. crowding out. d. social insurance.

social insurance.

Comparative advantage explains why people a. lack focus in their production decisions. b. try to gain a wide range of skills. c. specialize and trade. d. work at the job they love the most.

specialize and trade

Mandatory spending is spending that: a. includes all federal government spending. b. supports programs that do not get determined annually but instead are set in law. c. includes all state and local government spending. d. is appropriated by Congress annually.

supports programs that do not get determined annually but instead are set in law.

A tariff is a: a. tax on exported products. b. limit on the quantity of a good that can be exported. c. limit on the quantity of a good that can be imported. d. tax on imported products

tax on important products