macro final

the aggregate production function is represented as:

Y = f(L, H, K).

A trade cost is

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

The consumer price index is an index that tracks the:

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

What is social insurance?

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

.Shifts in demand

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

The concept of diminishing marginal utility means that an additional dollar of income will yield _____ marginal benefit compared to the previous dollar of extra income.

less

.The labor force participation rate is the:

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

16.Comparative advantage explains why people

specialize and trade

A government can promote the development of human capital by:

subsidizing secondary school education

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

substitutes-in-production.

The concept of equity focuses on:

Fairness

The law of supply refers to

the positive relationship between price and quantity supplied.

the law of diminishing returns states that:

when one input is held constant, while other inputs are increased, eventually output will increase by smaller and smaller amounts

Human capital refers to:

worker skills and knowledge.

n underemployed person is one who is:

working but whose skills are not fully utilized.

Which of the following items is an inferior good?

- Discount stores

21.What is quantity supplied?

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

Market failure occurs when market forces lead to:

-an inefficient outcome.

4. Sunk costs are costs that

-are incurred in the past and cannot be reversed.

.A "final" good or service is one that is:

-finished and ready for the final user.

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:

-human capital.

.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.

-interdependence

Holding all else constant, if people eat out more at expensive restaurants when they earn more, then expensive restaurant meals are

-normal goods.

What happens to the equilibrium price and quantity when demand increases and simultaneously supply decreases, and the relative size of the shifts is not known?

The equilibrium price rises, and the change in the equilibrium quantity is ambiguous.

3.Which principle tells you that the true cost of something is the next best alternative you have to give up to get it?

The opportunity cost principle.

A production function is:

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

When quantity demanded exceeds quantity supplied, _____ exists.

a shortage

in a market graph, consumer surplus is the area:

above the price and below the demand curve.

On a market graph, producer surplus is the area that is:

above the supply curve and below the price.

The working age population includes people who are:

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

1.the cost-benefit principle states that a decision should be pursued only if the

benefits are greater than the costs.

The "market value" of a good or service refers to the:

current dollar value of that good or service.

Frictional unemployment is unemployment:

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

.You go to Starbucks and see that the price of your favorite tall vanilla latte has gone up by 25 cents. All sizes of the vanilla lattes are now more expensive. As a result of this price increase, you would expect to see a

fall in the quantity demanded of vanilla lattes.

.Enforceable property rights encourage economic growth by encouraging:

investment.

Menu costs are the:

marginal costs of adjusting prices.

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:

marginal costs of adjusting prices.

GDP is defined as the

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

Analysis based on value judgments is called _____ analysis.

normative

In the field of economics, the observation that the living standard of a household is more stable than its income, because people think in terms of their long-term earnings as they spend, is known as:

permanent income versus current income.

The Producer Price Index is an index that tracks the:

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

.An equilibrium price is a price where the

quantity supplied equals the quantity demand

14.Diminishing marginal benefit:

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

.A market is a

setting that brings together potential buyers and sellers.

What is a social safety net?

t is the cash-assistance, goods, and services provided by the government to better the lives of those at the bottom of the income distribution.

When a manager uses comparative advantage to assign tasks in a workplace, then each

task is assigned to the worker with the lowest opportunity cost for performing the task.

Government social insurance programs are funded by:

taxes and fees that are assessed on workers and employers specifically for each program

intergenerational mobility is the extent to which:

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

.A market's deadweight loss is calculated as:

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

13.The law of demand refers to

the inverse relationship between price and quantity demanded.