Macro 1st Midterm (longer version)

false

The question "How do interest rates influence employment?" is an example of a normative question.

demand price - supply price (at the quota limit)

The quota rent is:

a new car sold by a dealer

The value of _____ is counted in GDP.

higher than the equilibrium price.

To be effective, a price floor must be set:

there are greater gains in material goods

When specialization is used:

widespread evasion of the minimum wage law in the black market for labor.

(See Slide 65 for help) In Europe the minimum wage has led to:

licensing the suppliers.

A common method that the government utilizes to limit the quantity of a good transacted is by:

positive externalities

A community college creates _____ for a community.

physical capital

A delivery truck is an example of:

investment spending

A laptop computer that is purchased by an accounting firm is considered to be:

financial and social

A pie-baking contest offers the winner a ribbon, a $1,000 check, and the opportunity to be featured in the local newspaper. The contest organizers are using (a) __________ incentive(s).

legally established maximum price that can be charged for a good.

A price ceiling is a(n):

factory worker

According to Adam Smith, this type of worker was considered a productive member of society:

C) an increase in the price of a car

All of the following cause an increase in the supply for cars except: A) a decrease in the costs of materials to build a car B) an increase in the number of car dealers C) an increase in the price of a car D) a decrease in the taxes on cars

fiscal policy, for use in altering government spending and taxation.

Among the tools available to macroeconomic policy makers is:

steel purchased by aircraft manufacturers.

An example of an intermediate good is:

increase; decrease in demand

An inferior good is one for which a(n) _____ in buyers' incomes causes a(n) _____.

(we face) tradeoffs (in nearly every choice we make)

Because of scarcity:

merchants

Both Sir William Petty and Gregory King thought ________ were productive members of society.

lead to cotton surpluses in the United States and lower prices for Brazilian farmers on world markets.

Brazilian cotton farmers were losing a lot of revenue due to the subsidies the U.S. government paid (and continues to pay) to American cotton farmers. In 2004, through the WTO, Brazil sued the U.S. and won. The reason they sued was that subsidized cotton from the United States:

investment spending (GDPI)

Construction of new houses is counted under

Physicocrat

François Quesnay was a lead thinker in the _________ era.

complements

If people demand more of product A when the price of B falls, then A and B are:

a decrease in quantity demanded of smart phones will occur

If the price of smart phones increases from $1000 to $1500: A) the demand for smart phones will decrease. B) the demand for smart phones will increase. C) an increase in quantity demanded of smart phones will occur. D) a decrease in quantity demanded of smart phones will occur.

more of the other good

If two of a producer's goods are substitutes in production, this usually means that the producer (with a fixed set of resources) will need to reduce production of one good when she produces:

The prices of grass and corn increase

In the market for grass-fed beef, what would cause a price increase?

increased saving by individuals increases their chances of becoming unemployed.

In the paradox of thrift:

changes in the quantity of money and the interest rate.

Monetary policy attempts to affect the overall level of spending through:

using resources for one activity means that their use elsewhere must be given up (i.e. there is a tradeoff)

Opportunity costs exist because:

inflation adjusted

Real GDP is _____ GDP.

excludes the value of leisure.

Real GDP tends to understate our economic well-being because it:

The person who is usually credited with developing national income accounts is:

The person who is usually credited with developing national income accounts is:

cause coffee shortages

Suppose the Ethiopian government sets coffee prices at $3 per pound.The market price, however, is $6 per pound. The government's actions will:

increase

Suppose the United States removes the sugar quotas and the market price of sugar drops. Since sugar is an input in chocolate, we would expect consumer surplus in the chocolate market to:

quantity demanded of

The _____ shoes will decrease when the price of shoes rises.

higher; less

The _____ the opportunity cost of an activity, the _____ a person will do that activity.

real gdp per capita

The best available common measure of a nation's standard of living is:

consumer surplus

The difference between how much a consumer would be willing to pay to consume a good and the amount actually paid to purchase the good is called:

macroeconomics

The field of economics that is concerned about the broader issues in the economy, such as inflation, unemployment, and national output of goods and services is called:

a negative externality

The live band plays nearby a restaurant and makes it difficult for restaurant patrons to hold a conversation. This is an example of:

many; many

The market for Jersey corn is considered to be competitive. This means there are _____ buyers and _____ sellers.

False

When the price of watermelons rises and people buy less, that represents a shift of the demand curve.

B) an oil spill C) a technological innovation in the green energy (e.g. solar and wind power)

Which event would shift the supply curve for gasoline to the left? A) an increase in property taxes B) an oil spill C) a technological innovation in the green energy (e.g. solar and wind power) D) a technological innovation in the oil-drilling industry that dramatically lowers costs

income rises

Which factor would lead to a increase in the demand for artwork?

limits on the number of bushels of clams that can be caught in New Jersey

Which of the following is a quota?

Your mother buys 100 shares of Nike stock.

Which of the following transactions would NOT be counted in GDP?

Greater income inequality A fall in investment spending in the real economy Social and political unrest

_________ was found to follow financialization of the real economy.

B) increase in income (if the good is a normal good.)

shift to the right of the demand curve could be caused by a(n): A) decrease in tastes or preferences. B) increase in income (if the good is a normal good.) C) decrease in population. D) expectations of future price drops.