MACRO EXAM 2 STUDY QUESTIONS
Refer to Table 23-4. What was the growth rate of real GDP for 1930? a. -8.62%. Real GDP is a better gauge of economic well-being than nominal GDP. b. -8.62%. Nominal GDP is a better gauge of economic well-being than real GDP. c. -9.43%. Real GDP is a better gauge of economic well-being than nominal GDP. d. -9.43%. Nominal GDP is a better gauge of economic well-being than real GDP.
a. -8.62%. Real GDP is a better gauge of economic well-being than nominal GDP.
Refer to Table 23-4. What are the GDP deflator and the inflation rate for 1932? a. 8.09, -11.7 b. 8.09.16, -13.3 c. 1236.46, 11.7 d. 1236.46, 13.3
a. 8.09, -11.7
Refer to Table 23-4. If prices had remained constant between 1929 and 1930, Nominal GDP would have decreased a. 8.62%. b. 9.43%. c. 11.97%. d. 13.6%.
a. 8.62%
7. Refer to Figure 4-24. All else equal, a large number of people becoming vegetarians would cause a move from a. DA to DB. b. DB to DA. c. x to y. d. y to x.
a. DA to DB
Refer to Figure 4-24. All else equal, a sale on chicken would cause a move from a. DA to DB. b. DB to DA. c. x to y. d. y to x.
a. DA to DB
Which of the following statements about GDP is correct? a. Nominal GDP values production at current prices, whereas real GDP values production at constant prices. b. Nominal GDP values production at constant prices, whereas real GDP values production at current prices. c. Nominal GDP values production at market prices, whereas real GDP values production at the cost of the resources used in the production process. d. Nominal GDP values production at the cost of the resources used in the production process, whereas real GDP values production at market prices.
a. Nominal GDP values production at current prices, whereas real GDP values production at constant prices.
26. Refer to Figure 4-27. Which of the four panels represents the market for pizza delivery in a college town as we go from summer to the beginning of the fall semester? a. Panel (a) b. Panel (b) c. Panel (c) d. Panel (d)
a. Panel (a)
17. Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for fences of a decrease in the price of wood? a. Point A to Point B b. Point C to Point B c. Point C to Point D d. Point A to Point D
a. Point A to Point B
Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for chocolate chip cookies of an improved high-speed mixer that allows bakers to produce cookies in less time? a. Point A to Point B b. Point C to Point B c. Point C to Point D d. Point A to Point D
a. Point A to Point B
Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for doctor's visits of an increase in the number of medical students graduating from medical school and successfully completing their residency programs? a. Point A to Point B b. Point C to Point B c. Point C to Point D d. Point A to Point D
a. Point A to Point B
What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers fell and the price of tea fell? a. Price would fall, and the effect on quantity would be ambiguous. b. Price would rise, and the effect on quantity would be ambiguous. c. Quantity would fall, and the effect on price would be ambiguous. d. Quantity would rise, and the effect on price would be ambiguous.
a. Price would fall, and the effect on quantity would be ambiguous
Which of the following is included in the calculation of GDP? a. The purchase of tutoring services from a tutor who holds citizenship outside the country but resides within the country. b. The purchase of a new edition of a foreign textbook that was produced in a different nation. c. The purchase of ink and paper supplies by a textbook company for the production of new textbooks. d. The purchase of a used textbook from a friend who took the same class last year.
a. The purchase of tutoring services from a tutor who holds citizenship outside the country but resides within the country.
In the equation Y = C + I + G + NX, a. Y represents the economy's total expenditure. b. C represents household expenditures on services and durable goods. c. all of the variables are always positive numbers. d. All of the above are correct.
a. Y represents the economy's total expenditure
The value of the housing services provided by the economy's owner-occupied houses is a. included in GDP, and the estimated rental values of the houses are used to place a value on these housing services. b. included in GDP, and the actual mortgage payments made on the houses are used to estimate the value of these rental services. c. excluded from GDP since these services are not sold in any market. d. excluded from GDP since the value of these housing services cannot be estimated with any degree of precision.
a. included in GDP, and the estimated rental values of the houses are used to place a value on these housing services
47. Refer to Figure 4-23. In this market for watermelons, a severe drought occurs which affects the watermelon crop. The equilibrium price a. increases and the equilibrium quantity decreases. b. decreases and the equilibrium quantity is ambiguous. c. and quantity both increase. d. and quantity both decrease.
a. increases and the equilibrium quantity decreases
Refer to Table 23-7. From 1975 to 1976, a. inflation was 25% and output did not grow. b. inflation was 25% and output grew. c. inflation was 50% and output did not grow. d. inflation was 50% and output grew.
a. inflation was 25% and output did not grow
Refer to Table 23-7. From 1976 to 1977, a. inflation was 33.3% and output grew at a rate of 20%. b. inflation was 33.3% and output grew at a rate of 60%. c. inflation was 50% and output grew at a rate of 20%. d. inflation was 50% and output grew at a rate of 60%.
a. inflation was 33.3% and output grew at a rate of 20%
Gross domestic product adds together many different kinds of goods and services into a single measure of the value of economic activity. To do this, GDP makes use of a. market prices. b. statistical estimates of the value of goods and services to consumers. c. prices based on the assumption that producers make no profits. d. the maximum amount consumers would be willing to pay.
a. market prices
Changes in the GDP deflator reflect a. only changes in prices. b. only changes in the amounts being produced. c. both changes in prices and changes in the amounts being produced. d. neither changes in prices nor changes in the amounts being produced.
a. only changes in prices
39. What will happen to the equilibrium price and quantity of traditional camera film if traditional cameras become more expensive, digital cameras become cheaper, the cost of the resources needed to manufacture traditional film falls, and more firms decide to manufacture traditional film? a. Price will fall, and the effect on quantity is ambiguous. b. Price will rise, and the effect on quantity is ambiguous. c. Quantity will fall, and the effect on price is ambiguous. d. Quantity will rise, and the effect on price is ambiguous.
a. price will fall, and the effect on quantity is ambiguous
Refer to Table 4-10. If the four suppliers listed are the only suppliers in this market and the market quantity demanded is 500 cases when the price is $5.00, which of the following statements is correct? a. The market is in equilibrium at a price of $5.00. b. There is a surplus of 100 cases at a price of $5.00. c. There is a shortage of 100 cases at a price of $5.00. d. There is a shortage of 50 cases at a price of $5.00.
a. the market is in equilibrium at a price of $5.00
50. Refer to Figure 4-25. All else equal, buyers expecting paper to be more expensive in the future would cause a current move from a. x to y. b. y to x. c. SA to SB. d. SB to SA.
a. x to y
Refer to Figure 4-25. All else equal, the return of college students to campus in the fall would cause a move from a. x to y. b. y to x. c. SA to SB. d. SB to SA.
a. x to y
33. Refer to Figure 4-19. In this market, equilibrium price and quantity, respectively, are a. $10 and 30 units. b. $10 and 50 units. c. $10 and 70 units. d. $4 and 50 units.
b. $10 and 50 units
Refer to Figure 4-18. At what price would there be an excess demand of 200 units of the good? a. $15 b. $20 c. $30 d. $35
b. $20
Refer to Table 23-1. The market value of all final goods and services produced within Chereaux in 2015 is a. $214. b. $200. c. $204. d. $230.
b. $200
A steel company sells some steel to a bicycle company for $150. The bicycle company uses the steel to produce a bicycle, which it sells for $250. Taken together, these two transactions contribute a. $150 to GDP. b. $250 to GDP. c. between $250 and $400 to GDP, depending on the profit earned by the bicycle company when it sold the bicycle. d. $400 to GDP.
b. $250 to GDP
A country's real GDP rose from $500 to $530 while its nominal GDP rose from $600 to $700. What was this country's inflation rate? a. 16.7%. b. 10.0%. c. 15.0%. d. -9.1%.
b. 10.0%
Suppose that an economy produces 20,000 units of good A which sells at $3 a unit and 40,000 units of good B which sells at $1 per unit. Production of good A contributes a. 1/3 times as much to GDP as the production of good B. b. 3/2 times as much to GDP as the production of good B. c. 3 times as much to GDP as the production of good B. d. 2/3 times as much to GDP as production of good B.
b. 3/2 times as much to GDP as the production of good B
29. Refer to Figure 4-18. At the equilibrium price, a. 200 units would be supplied and demanded. b. 400 units would be supplied and demanded. c. 600 units would be supplied and demanded. d. 600 units would be supplied, but only 200 would be demanded.
b. 400 units would be supplied and demanded
Refer to Table 23-4. What are the GDP deflator and the inflation rate for 1931? a. 9.16, -11.5 b. 9.16, -10.3 c. 1091.37, 10.3 d. 1091.37, 11.5
b. 9.16, -10.3
Refer to Table 4-9. Which combination would produce an increase in equilibrium price and an indeterminate change in equilibrium quantity? a. A b. B c. C d. D
b. B
3. Refer to Figure 4-24. All else equal, the approach of Thanksgiving would cause a move from a. DA to DB. b. DB to DA. c. x to y. d. y to x.
b. DB to DA
19. Suppose the income of buyers in a market for an inferior good decreases and a technological advancement occurs also. What would we expect to happen in the market? a. Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. b. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous. c. Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. d. None of the above is correct.
b. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
The information for 2008 in millions in the table below was reported by the World Bank. On the basis of this information, which list below contains the correct ordering of real GDP per person from highest to lowest? a. Japan, Germany, United States b. Japan, United States, Germany c. Germany, United States, Japan d. United States, Japan, Germany
b. Japan, United States, Germany
Refer to Figure 4-27. Which of the four panels illustrates a decrease in quantity supplied? a. Panel (a) b. Panel (b) c. Panel (c) d. Panel (d)
b. Panel (b)
Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for golf balls of an increase in green fees? a. Point A to Point B b. Point C to Point B c. Point C to Point D d. Point A to Point D
b. Point C to Point B
Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for paper napkins as a result of a "Go Green" advertising campaign encouraging people to use cloth napkins? a. Point A to Point B b. Point C to Point B c. Point C to Point D d. Point A to Point D
b. Point C to Point B
Refer to Table 4-12. If both members and non-members are allowed to purchase tickets to this year's celebrity golf tournament and the country club sets the ticket price at $30, then there will be a. a shortage of 300 tickets. b. a surplus of 300 tickets. c. 600 tickets sold. d. 600 tickets unsold.
b. a surplus of 300 tickets
Real GDP is the yearly production of final goods and services valued at a. current prices. b. constant prices. c. expected future prices. d. the ratio of current prices to constant prices.
b. constant prices
15. Refer to Figure 4-23. In this market for sunscreen, there is a decrease in the price of zinc oxide, an input into sunscreen, and more producers enter the market. The equilibrium price a. increases and the equilibrium quantity decreases. b. decreases and the equilibrium quantity increases. c. is ambiguous and the equilibrium quantity increases. d. decreases and the equilibrium quantity is ambiguous.
b. decreases and the equilibrium quantity increases
In order to include many different goods and services in an aggregate measure, GDP is computed using, primarily, a. values of goods and services based on surveys of consumers. b. market prices. c. quantities purchased by a typical urban household. d. profits from producing goods and services.
b. market prices
GDP excludes most items that are produced and sold illegally and most items that are produced and consumed at home because a. the quality of these items is not high enough to contribute value to GDP. b. measuring them is so difficult. c. the government wants to discourage the production and consumption of these items. d. these items are not reported on income tax forms.
b. measuring them is so difficult
Which of the following always uses prices and quantities from the same period? a. both nominal and real GDP. b. nominal GDP but not real GDP. c. real GDP but not nominal GDP. d. neither nominal or real GDP.
b. nominal GDP but not real GDP
37. Refer to Table 4-11. If the price were $8, a a. shortage of 20 units would exist, and price would tend to rise. b. surplus of 25 units would exist, and price would tend to fall. c. shortage of 25 units would exist, and price would tend to rise. d. surplus of 45 units would exist, and price would tend to fall.
b. surplus of 25 units would exist, and price would tend to fall
Estimates of the values of which of the following non-market goods or services are included in GDP? a. unpaid housework but not the rental value of owner-occupied homes. b. the rental value of owner-occupied homes but not unpaid housework. c. unpaid housework and the rental value of owner-occupied homes. d. Neither unpaid housework nor the rental value of owner-occupied homes.
b. the rental value of owner-occupied homes but not unpaid housework.
Refer to Figure 4-25. All else equal, an increase in the use of laptop computers for note-taking would cause a move from a. x to y. b. y to x. c. SA to SB. d. SB to SA.
b. y to x
Refer to Table 23-1. Net national product for Chereaux in 2015 is a. $194. b. $196. c. $198. d. $204.
c. $198
20. Refer to Table 4-12. If only members are allowed to purchase tickets to this year's celebrity golf tournament, then what will be the equilibrium price? a. $10 b. $15 c. $20 d. $25
c. $20
14. Refer to Figure 4-18. Equilibrium price and quantity are, respectively, a. $15 and 200 units. b. $25 and 600 units. c. $25 and 400 units. d. $35 and 200 units.
c. $25 and 400 units
Refer to Figure 4-18. At what price would there be an excess supply of 200 units of the good? a. $15 b. $20 c. $30 d. $35
c. $30
Refer to Table 23-4. What was the growth rate of real GDP for 1931? a. -6.93%. Real GDP is a better gauge of economic well-being than nominal GDP. b. -6.93%. Nominal GDP is a better gauge of economic well-being than real GDP. c. -6.49%. Real GDP is a better gauge of economic well-being than nominal GDP. d. -6.49%. Nominal GDP is a better gauge of economic well-being than real GDP.
c. -6.49%. Real GDP is a better gauge of economic well-being than nominal GDP.
Suppose that an economy produces 30,000 units of good A which sells at $3 a unit and 60,000 units of good B which sells at $2 per unit. Production of good A contributes a. 1/2 times as much to GDP as the production of good B. b. 3/2 times as much to GDP as the production of good B. c. 3/4 times as much to GDP as the production of good B. d. 4/3 times as much to GDP as production of good B.
c. 3/4 times as much to GDP as the production of good B
Refer to Table 4-9. Which combination would produce a decrease in equilibrium price and an indeterminate change in equilibrium quantity? a. A b. B c. C d. D
c. C
GDP is not a perfect measure of well-being; for example, a. GDP incorporates a large number of non-market goods and services that are of little value to society. b. GDP places too much emphasis on the value of leisure. c. GDP fails to account for the quality of the environment. d. All of the above are correct.
c. GDP fails to account for the quality of the environment.
1. Refer to Table 4-13. Suppose x = 1. Then it must be true that a. Harry and Jake have the same income, which is lower than Darby's income. b. if sandwiches and potato chips are complements for Harry, then those two goods are also complements for Jake. c. Harry's demand curve is identical to Jake's demand curve. d. All of the above are correct.
c. Harry's demand curve is identical to Jake's demand curve
Refer to Figure 4-27. Which of the four panels represents the market for cars as a result of the adoption of new technology on assembly lines? a. Panel (a) b. Panel (b) c. Panel (c) d. Panel (d)
c. Panel (c)
Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for bullet-proof vests of an increase in the price of Kevlar? a. Point A to Point B b. Point C to Point B c. Point C to Point D d. Point A to Point D
c. Point C to Point D
Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for convertible automobiles of an increase in the price of steel? a. Point A to Point B b. Point C to Point B c. Point C to Point D d. Point A to Point D
c. Point C to Point D
Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for wedding cakes resulting from a decrease in the number of pastry chefs? a. Point A to Point B b. Point C to Point B c. Point C to Point D d. Point A to Point D
c. Point C to point D
21. What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises, the price of steel rises, public transportation becomes cheaper and more comfortable, and auto-workers negotiate higher wages? a. Price will fall, and the effect on quantity is ambiguous. b. Price will rise, and the effect on quantity is ambiguous. c. Quantity will fall, and the effect on price is ambiguous. d. Quantity will rise, and the effect on price is ambiguous.
c. Quantity will fall, and the effect on price is ambiguous
Which of the following is a way to compute GDP? a. add up the wages paid to all workers b. add up the quantities of all final goods and services c. add up the market values of all final goods and services d. add up the difference between the market values of all final goods and services and then subtract the costs of producing those goods and services
c. add up the market values of all final goods and services
GDP per person tells us the income and expenditure of the a. richest person in the economy. b. poorest person in the economy. c. average person in the economy. d. entire economy.
c. average person in the economy
Which of the following is included in GDP? a. the market value of rental housing services, but not the market value of owner-occupied housing services. b. the market value of owner-occupied housing services, but not the market value of rental housing services c. both the market value of rental housing services and the market value of owner-occupied housing services d. neither the market value of owner-occupied housing services nor the market value of rental housing services.
c. both the market value of rental housing services and the market value of owner-occupied housing services
16. Refer to Figure 4-18. At a price of $20, there would be a(n) a. shortage. The law of supply and demand predicts that the price will fall from $20 to a lower price. b. surplus. The law of supply and demand predicts that the price will rise from $20 to a higher price. c. excess demand. The law of supply and demand predicts that the price will rise from $20 to a higher price. d. excess supply. The law of supply and demand predicts that the price will fall from $20 to a lower price.
c. excess demand. The law of supply and demand predicts that the price will rise from $20 to a higher price.
U.S. GDP a. includes production of foreigners working in the U.S. and production of U.S. citizens working in foreign countries. b. includes production of foreigners working in the U.S. but excludes production of U.S. citizens working in foreign countries. c. excludes production of foreigners working in the U.S. but includes production by U.S. citizens working in foreign countries. d. excludes production of foreigners working in the U.S. and production by U.S. citizens working in foreign countries.
c. excludes production of foreigners working in the U.S. but includes production by U.S. citizens working in foreign countries.
Refer to Table 4-13. Suppose Harry, Darby, and Jake are the only demanders of sandwiches and that the market demand violates the law of demand. Then, in the table, the value of x must be a. less than or equal to 5. b. greater than or equal to 5. c. greater than or equal to 7. d. greater than or equal to 10.
c. greater than or equal to 7
The GDP deflator is the ratio of a. real GDP to nominal GDP multiplied by 100. b. real GDP to the inflation rate multiplied by 100. c. nominal GDP to real GDP multiplied by 100. d. nominal GDP to the inflation rate multiplied by 100.
c. nominal GDP to real GDP multiplied by 100
Which of the following is always measured in prices from a base-year? a. both nominal and real GDP. b. nominal but not real GDP. c. real but not nominal GDP. d. neither nominal nor real GDP.
c. real but not nominal GDP
Refer to Figure 4-18. At a price of $15, there would be a a. surplus of 400 units. b. shortage of 200 units. c. shortage of 400 units. d. shortage of 600 units.
c. shortage of 400 units
25. Refer to Figure 4-19. If there is currently a shortage of 20 units of the good, then the law of a. demand predicts that the price will rise by $2 to eliminate the shortage. b. supply predicts that the price will rise by $2 to eliminate the shortage. c. supply and demand predicts that the price will rise by $2 to eliminate the shortage. d. supply and demand predicts that the price will fall by $2 to eliminate the shortage.
c. supply and demand predicts that the price will rise by $2 to eliminate the shortage.
Refer to Figure 4-18. At a price of $35, there would be a a. shortage of 400 units. b. surplus of 200 units. c. surplus of 400 units. d. surplus of 600 units.
c. surplus of 400 units
Estimates of the values of which of the following non-market goods or services are included in GDP? a. the value of unpaid housework b. the value of services provided by major household appliances purchased in a previous period c. the estimated rental value of owner-occupied homes d. All of the above are included in GDP.
c. the estimated rental values of owner occupied homes
GDP is defined as the a. value of all goods and services produced within a country in a given period of time. b. value of all goods and services produced by the citizens of a country, regardless of where they are living, in a given period of time. c. value of all final goods and services produced within a country in a given period of time. d. value of all final goods and services produced by the citizens of a country, regardless of where they are living, in a given period of time.
c. value of all final goods and services produced within a country in a given period of time
Refer to Table 23-1. Gross national product for Chereaux in 2015 is a. $186. b. $214. c. $200. d. $204.
d. $204
Refer to Table 4-12. If both members and non-members are allowed to purchase tickets to this year's celebrity golf tournament, then what will be the equilibrium price? a. $10 b. $15 c. $20 d. $25
d. $25
In a simple circular-flow diagram, a. households spend all of their income. b. all goods and services are bought by households. c. expenditures flow through the markets for goods and services, while income flows through the markets for the factors of production. d. All of the above are correct.
d. All of the above are correct
Refer to Table 4-9. Which combination would produce a decrease in equilibrium quantity and an indeterminate change in equilibrium price? a. A b. B c. C d. D
d. D
11. Suppose the number of buyers in a market increases and a technological advancement occurs also. What would we expect to happen in the market? a. Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. b. Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous. c. Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. d. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
d. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous
U.S. GDP and U.S. GNP are related as follows: a. GNP = GDP + Value of exported goods - Value of imported goods. b. GNP = GDP - Value of exported goods + Value of imported goods. c. GNP = GDP + Income earned by foreigners in the U.S. - Income earned by U.S. citizens abroad. d. GNP = GDP - Income earned by foreigners in the U.S. + Income earned by U.S. citizens abroad.
d. GNP = GDP - Income earned by foreigners in the U.S. + Income earned by U.S. citizens abroad.
27. Refer to Figure 4-27. Which of the four panels represents the market for peanut butter after a major hurricane hits the peanut-growing south? a. Panel (a) b. Panel (b) c. Panel (c) d. Panel (d)
d. Panel (c)
6. Refer to Figure 4-27. Which of the four panels illustrates a decrease in quantity demanded? a. Panel (a) b. Panel (b) c. Panel (c) d. Panel (d)
d. Panel (d)
Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for swimming lessons of an increase in the incomes of parents with school-aged children? a. Point A to Point B b. Point C to Point B c. Point C to Point D d. Point A to Point D
d. Point A to Point D
24. What would happen to the equilibrium price and quantity of lattés if the cost to produce steamed milk, which is used to make lattés, increased, and scientists discovered that lattés cause heart attacks? a. Both the equilibrium price and quantity would increase. b. Both the equilibrium price and quantity would decrease. c. The equilibrium price would decrease, and the effect on equilibrium quantity would be ambiguous. d. The equilibrium quantity would decrease, and the effect on equilibrium price would be ambiguous.
d. The equilibrium quantity would decrease, and the effect on equilibrium price would be ambiguous.
9. Refer to Table 4-13. Regarding Harry and Darby, for whom are sandwiches a normal good? a. only for Harry b. only for Darby c. for both Harry and Darby d. This cannot be determined from the given information.
d. This cannot be determined from the given information
Refer to Figure 4-27. Panel (d) shows which of the following? a. a decrease in demand and a decrease in quantity supplied b. a decrease in demand and a decrease in supply c. a decrease in quantity demanded and a decrease in quantity supplied d. a decrease in quantity demanded and a decrease in supply
d. a decrease in quantity demanded and a decrease in supply
GDP is not a perfect measure of well-being; for example, a. GDP excludes the value of volunteer work. b. GDP does not address the distribution of income. c. GDP does not address environmental quality. d. All of the above are correct.
d. all of the above are correct
Which of the following is a way to compute GDP? a. total income earned. b. total expenditures on final goods. c. add up the market values of all final goods and services. d. All of the above are correct.
d. all of the above are correct
In a simple circular-flow diagram, total income and total expenditure are a. never equal because total income always exceeds total expenditure. b. seldom equal because of the ongoing changes in an economy's unemployment rate. c. equal only when the government purchases no goods or services. d. always equal because every transaction has a buyer and a seller.
d. always equal because every transaction has a buyer and a seller
Refer to Figure 4-19. If price in this market is currently $14, then there would be a(n) a. surplus of 20 units. The law of supply and demand predicts that the price will rise from $14 to a higher price. b. excess supply of 20 units. The law of supply and demand predicts that the price will fall from $14 to a lower price. c. surplus of 40 units. The law of supply and demand predicts that the price will rise from $14 to a higher price. d. excess supply of 40 units. The law of supply and demand predicts that the price will fall from $14 to a lower price.
d. excess supply of 40 units. The law of supply and demand predicts that the price will fall from $14 to a lower price
When economists talk about growth in the economy, they measure that growth as the a. absolute change in nominal GDP from one period to another. b. percentage change in nominal GDP from one period to another. c. absolute change in real GDP from one period to another. d. percentage change in real GDP from one period to another.
d. percentage change in real GDP from one period to another.
38. Suppose roses are currently selling for $40 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a a. shortage to exist and the market price of roses to increase. b. shortage to exist and the market price of roses to decrease. c. surplus to exist and the market price of roses to increase. d. surplus to exist and the market price of roses to decrease.
d. surplus to exist and the market price of roses to decrease
4. Refer to Figure 4-24. All else equal, an increase in the productivity of turkey farmers would cause a move from a. DA to DB. b. DB to DA. c. x to y. d. y to x.
d. y to x
Refer to Figure 4-24. All else equal, an increase in the productivity of turkey farmers would cause a move from a. DA to DB. b. DB to DA. c. x to y. d. y to x.
d. y to x