macro final (quizzes 3-4)

Net exports equal:

exports minus imports.

Real GDP measures the ______ of production; nominal GDP measures the ______ of production.

physical volume; current dollar value

If a market is in equilibrium and demand increases while supply decreases, the change in the equilibrium price is ________ and the change in the equilibrium quantity is _________.

positive; indeterminate

Three equivalent ways to measure GDP are total _____, total _____, and total ______.

production; income; expenditure

Capital income includes:

profits, rent, and interest.

If total output is calculated by adding up the market value of goods and services produced, then more expensive items:

receive a greater weight than cheaper items.

The value added by any firm equals the firm's ______ from selling the product minus _______.

revenue; the cost of inputs purchased from other firms

If two countries are economically identical except that citizens in one country have more leisure time, then the level of GDP:

will be the same in both countries.

Bob's Barber Shop cut 3,000 heads of hair in 2014and 3,100 in 2015. The price of a hair cut was $7 in 2014and $8 in 2015. If 2014is the base year, what was Bob's contribution to nominal GDP in the year 2014?

$21,000 Bob?s contribution to nominal GDP was: (3,000*$7) = $21,000.

Peg's Manicure Manor did 4,000 sets of nails in 2010 and 4,500 sets of nails in 2011. The price of a set of nails was $20 in 2010 and $22 in 2011. If 2010 is the base year, Peg's contribution to nominal GDP in 2010 was ______ and in 2011 was _______.

$80,000; $99,000 Peg?s contribution to nominal GDP in 2010 was (4,000 nails *$20) = $80,000, and her contribution in 2011 was (4,500 nails *$22) = $99,000.

If the Citrus Growers Association grows $1 million worth of oranges, sells $500,000 worth of oranges to consumers, uses the rest to make orange juice that is sold to consumers for $3 million, Citrus Grower's contribution to GDP is:

3,500,000

Suppose that the equilibrium price of T-shirts increases and the equilibrium quantity falls. Which of the following best fits the observed data?

A decrease in supply with demand constant.

What might cause a demand function to shift to the right?

An increase in the price of a substitute.

Suppose that the market price for hot dogs sold by street vendors has just risen from $4.50 to $5, and that Curly has now begun operating a hot dog cart. We can assume that:

Curly's reservation price is greater than $4.50 but no more than $5.

If you knew that two countries had the same level of real GDP per person, what additional piece of information would help you determine in which country people had a better standard of living?

The average number of hours worked per week in each country

Suppose you bought a concert ticket from Ticketmaster for $50, but when you got to the concert scalpers (individuals who re-sell tickets at the event) were selling tickets in the same seating area as yours for $25. What is probably true?

There is an excess supply of tickets for this concert at the Ticketmaster price.

Which of the following would increase the consumption component of U.S. GDP?

You purchase a bottle of California wine.

Despite some problems with equating GDP with economic well-being, higher real GDP per person does imply greater economic well-being because it tends to be positively associated with:

better education, health and life expectancy.

Long-lived goods used for producing other goods and services are called:

capital goods.

Suppose that both supply and demand for iPads decrease. One can predict that the:

equilibrium quantity will fall but the equilibrium price can rise or fall.

As the price of flour (an input into the cookie production process) increases, firms that produce cookies will:

decrease the supply of cookies.

When the supply of a good decreases, consumers will eventually:

decrease their quantity demanded.

The most commonly used measure of an economy's output is:

gross domestic product.

Goods and services provided by state and local governments are:

included in GDP at cost.

At the beginning of the fall semester, college towns experience large increases in their populations, causing a(n):

increase in the demand for apartments.

As consumers' incomes increase, the demand for ground beef decreases. Ground beef is called a(n):

inferior good.

Spending on new capital goods, new homes, and the addition of unsold goods to company inventories is included in:

investment spending.

The value of unpaid work by a homemaker ______ included in GDP and the value of housekeeping services sold in amarket ______ included in GDP.

is not; is

According to the equilibrium principle:

market equilibrium exploits all opportunities for individual gain, but may not exploit gains possible through collective action.

Government purchases include all of the following except:

social security benefits paid by the federal government.

As coffee becomes more expensive, Joe starts drinking tea, and therefore quantity demanded for coffee decreases. This is called:

the income effect.

Suppose the local slaughterhouse gives off an unpleasant stench. The price of meat would then be _______ because not all of the _________ are accounted for in the marketplace.

too low; costs

GDP is a measure of an economy's:

total output.

Intermediate goods and services are ______ production and ______ counted in GDP.

used up in the process of; are not