ECON

Goods that are sold in 2020 but produced in 2018:

are included in investment in 2018.

For the past several months, per capita output has grown more and more slowly, and unemployment has fallen, but both trends appear to have leveled off. Where in the business cycle is the economy?

at a peak

In the circular-flow diagram, the factor market is where:

businesses buy factors of production.

The onset of the Great Depression:

came as a shock to most economists and opened the door for critiques of mainstream thought by economists like John Maynard Keynes.

(Table: Matcha Tea and Coho Salmon Production Possibilities) Use Table: Matcha Tea and Coho Salmon Production Possibilities. The table shows the maximum amounts of matcha tea and Coho salmon that Colombia and Washington can produce if each produces just one good. The opportunity cost of producing 1 unit of matcha tea for Colombia is _____ Coho salmon. C= 40 matcha and 20 coho W= 10 matcha and 10 coho

0.5

_____ illustrates an inverse relationship between price and quantity.

A demand curve

In the market for fresh coffee, a normal good, which of the following will shift the demand curve to the right?

Incomes rise.

Which statement is TRUE?

It is possible to have no absolute advantage but a comparative advantage in the production of some good

Tara had a DVD rental shop, but the store went out of business because no one rents DVDs from stores anymore. Which economic principle does this statement BEST represent?

One person's spending is another person's income.

The simple circular-flow diagram ignores a number of real-world complications in the interest of simplicity. Which of the following is NOT one of the factors ignored?

The role of the market for goods and services in the circular flow

The simple circular-flow diagram ignores a number of real-world complications in the interest of simplicity. Which of the following is NOT one of the factors ignored?

The role of the market for goods and services in the circular flow.

A movement along the demand curve for a good generally results from:

a change in the price of the good.

Steak is a normal good. If students' incomes at your college decrease, the effect on steak consumption will be:

a decrease in demand.

An announcement of a finding that vaping diminishes people's ability to think clearly will MOST likely result in:

a decrease in the demand for vapes.

Which item is NOT included in calculations of GDP?

a monthly Social Security payment

Saying that an unemployment rate of 8% is too high is:

a normative statement.

Given that people usually exploit opportunities to make themselves better off, which of the following policies is MOST likely to reduce road congestion in Los Angeles (the worst traffic city in America)?

a toll road that requires each car to pay a congestion fee to enter the city center

Investment spending refers to the:

addition to the economy's supply of productive physical capital.

It would be impossible to do an experiment that involved raising the minimum wage across the country and seeing what happens. Instead, economists will observe the effects of a smaller economy that is raising its minimum wage (like New York City in 2019) and then extrapolate those results to the larger U.S. economy. This preceding statement embodies the ideology inherent in:

an economic model.

If France gives up three high speed trains for each ton of cheese it produces, while Canada gives up seven high speed trains for each ton of cheese it produces, then France has a comparative advantage in _____ production and should specialize in _____.

cheese; cheese

Suppose that apples and pomegranates are substitutes in consumption. The _____ pomegranates will increase when apple prices rise.

demand for

In a business cycle, a trough is immediately followed by a(n):

expansion.

When the Dairy Farmers of America (an agricultural coop) restricts the supply of milk to increase the profits of dairy farmers, the milk market:

fails because there is no longer an efficient allocation of resources.

French fries and pastrami sandwiches are complements in consumption. Suppose the cost of the ingredients used to make pastrami sandwiches rises, so that the price of pastrami sandwiches rises. The equilibrium price of French fries will then _____, and the equilibrium quantity will _____.

fall; decrease

During a recession, one will often observe:

falling aggregate output.

In the circular-flow diagram, an organization that produces goods and services for sale is a:

firm.

Among the tools available to macroeconomic policy makers is:

fiscal policy, to influence overall spending.

Long-run economic growth is best measured by:

growth in the production of goods and services.

An economy is said to have a comparative advantage if it:

has the lowest opportunity cost of producing a particular good compared with other economies.

An individual with an absolute advantage in the production of all goods will:

have a comparative advantage in the production of some goods but not others.

Tessa is paid $14.25 an hour to work at a retail store. In the circular-flow diagram, this is an example of a:

household selling a resource in the factor market.

In moving along a production possibility frontier, the opportunity cost to society of getting more of one good:

is measured by the amount of the other good that must be given up.

If the value of a country's exports is GREATER than the value of its imports, it:

is running a trade surplus.

Marginal analysis:

is used primarily when deciding how much of an activity to undertake.

Which of the following is sold in the factor market?

labor

The promotion of employment and growth in the economy as a whole is a focus of:

macroeconomics.

Some football fans leave the game at the two-minute warning (especially when the outcome is pretty assured) to avoid the postgame traffic. These fans are:

making a marginal decision by comparing the cost of leaving early to the benefit of leaving early.

One role of government policy, suggested by macroeconomic analysis, is to:

manage short-run economic fluctuations.

Economic models are:

potentially useful in informing economic policy.

Investment spending is spending on:

productive physical capital.

Economists report that employment has fallen over the last several quarters and forecast more of the same for the next few months. The economy is in the _____ stage of the business cycle. Correct!

recession

Suppose you take the train to work every day. Because you drive to the train station from your house, you must allow for time to park. However, since the train station has free parking for commuters, you often have difficulty finding a spot to take the train at the time you wish. To solve this problem, all commuters should be:

required to pay for parking.

The national income and product accounts keep track of:

sales and investment spending by businesses.

An example of an intermediate good is:

steel purchased by aircraft manufacturers.

In the circular-flow diagram, households:

supply resources.

You notice that the price of computers has risen and that the quantity of computers sold has decreased. These observations suggest that the _____ curve for computers has shifted to the _____.

supply; left

A household is a person or group of people _____.

that share an income

Macroeconomics focuses on:

the economy as a whole.

In contrast to the conclusion of microeconomic analysis that competitive markets (assuming no market imperfections and perfect information) will lead to full employment, many economists argue, based on macroeconomic analysis, that:

the economy can suffer from prolonged unemployment as a result of an overall deficiency of demand.

An example of investment spending is:

the purchase of a freezer by an ice-cream parlor.

Yoghurt is an important ingredient in the production of frozen yoghurt. If the price of yoghurt increases, then one would expect, holding all other things constant:

the supply curve for frozen yoghurt to shift leftward.

GDP does NOT exclude:

the value of owner-occupied housing.

The point in the business cycle when GDP stops falling and begins rising is a(n):

trough.

While buying refreshments for an upcoming party, you notice that a six-pack of Bud Lite Beer costs $6 and that a six-pack of Miller Lite Beer costs $8. You buy the six-pack of Miller Lite Beer, although you wonder if maybe two six-packs of Bud Lite Beer would have been a better choice. The opportunity cost of the Miller Lite Beer is:

two six-packs of Bud Lite Beer.

GDP calculated via factor payments includes:

wages, interest payments, rent, and profits.

King Taco charges the same price for everything on its menu: $5 will buy a taco, a burrito, or nachos. You buy the burrito and think that if you had not purchased the burrito, you would have purchased the taco. The opportunity cost of the burrito is:

your forgone enjoyment of the taco.

Which item would NOT be included in GDP for 2019?

your purchase of your neighbor's 2015 Toyota