Macroeconomics

Lakukan tugas rumah & ujian kamu dengan baik sekarang menggunakan Quizwiz!

Every society faces​ trade-offs because we live in a world of scarcity. Suppose a​ student-athlete has the opportunity to earn ​$1,000,000 next year playing for a minor league baseball​ team, ​$700,000 next year playing for a European professional football​ team, or​ $0 returning to college for another year. The opportunity cost of the​ student-athlete returning to college next year is ​$______________________________________

$1,000,000

Any model is based on making assumptions because _________________________________

A. we cannot analyze an economic issue unless we reduce its complexity. B. models have to be simplified to be useful. C. both a and b.

A market is a group of ______________▼ of a good or service and the institution or arrangement by which they come together to trade.

Buyers and Sellers

Societies organize their economies in two main ways to answer the three questions of​ what, how, and who. A society can have a ▼ centrally planned market mixed economy in which the government decides how economic resources will be allocated. Or a society can have a ▼ centrally planned mixed market economy in which the decisions of households and firms interacting in markets allocate economic resources.

Centrally planned, market

​__________________________________decide(s) what goods and services will be produced.

Consumers, firms, and government

_______________is the study of the choices people make to attain their​ goals, given their scarce resources.

Economics

Jonathan Baker is a market analyst. He works at a firm that is one of the few producers of good X. Jonathan formulates a hypothesis that an increase in advertising will increase the demand for this​ firm's products by attracting new customers. Which of the​ following, if​ true, would suggest that​ Jonathan's hypothesis will​ hold?

Even​ brand-loyal consumers can be convinced to change their preferences.

Terbia is a closed​ economy, which has been growing at a very slow pace over the last decade. In order to boost economic​ growth, the government removed trade barriers earlier this year and increased its spending on the economy. These moves were expected to generate employment and increase economic growth.​ However, unemployment did not decline as much as expected. Which of the​ following, if​ true, can explain this​ outcome?

Imported varieties of many goods were cheaper than the domestically produced varieties.

Harry Fletcher is a market analyst at an automobile firm. He formed a hypothesis that an increase in advertising would increase demand for the​ firm's cars. The ad campaign ran for a period of six months.​ However, the results were not as positive as Harry had anticipated. Which of the​ following, if​ true, can explain this​ outcome?

Interest rates increased substantially during this period.

Which of the following covers the study of topics such as inflation or​ unemployment?

Macroeconomics

Which of the following is not a step economists follow when developing an economic​ model?

Make value judgments to be proven or disproven.

The economy of East Paragon has been experiencing deflation for the last few​ months, with prices of goods and services declining. Because firms are charging lower​ prices, they expected higher sales.​ However, consumption spending did not increase​ much, resulting in substantial losses for these firms. Which of the​ following, if​ true, explains why consumers did not increase consumption in spite of falling​ prices?

Most people were expecting prices to decline further.

​Trade-offs force society to answer questions such as what goods and services will be​ produced, how will the goods and services be​ produced, and who will receive the goods and services produced. Which of the following countries has an economy where the government makes these​ decisions?

North Korea

When economists develop models designed to explain the choices people​ make, they generally assume that

People are rational

Positive analysis - is concerned with what is​, and normative analysis - is concerned with what ought to be. Economics is about - Positive analysis which measures the costs and benefits of different courses of action.

Positive Analysis normative analysis positive analysis

Suppose an analyst estimates how many jobs have been lost from family leave laws.

Positive analysis

Suppose an analyst estimates the cost to businesses from minimum wage laws.

Positive analysis

▼_______________________________ occurs when a good or service is produced at the lowest possible cost. ▼_______________________________ occurs when production is in accordance with consumer preferences.

Productive efficiency Allocative efficiency

One of the basic facts of life is that people must make choices as they try to attain their goals. This unavoidable fact comes from a reality an economist calls

Scarcity

A large corporation that runs nursing homes estimates that changes to Medicare will result in lower payments by Medicare to nursing homes for​ short-term stays by patients that require therapy or care upon leaving hospitals. Assume the corporation is considering expanding the number of​ "beds" it offers at its nursing homes. Part 2 Given the changes to​ Medicare, if the marginal benefit of offering an additional bed is ​$3,000 and the marginal cost is ​$9,000 per​ bed, then the corporation Should or Should not offer additional beds.

Should not

Xylo​ Inc., a manufacturer of domestic​ appliances, lowered the prices of its​ products, expecting an increase in demand and sales by at least 20 percent.​ However, it was observed that sales increased by only 8 percent. Which of the​ following, if​ true, can explain this​ outcome?

The government increased personal income tax rates earlier this year.

A hypothesis in an economic model is

all of the above

Economics is a social science because

all of the above

Microeconomics is the study of

how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices

In the United​ States, who receives the goods and services produced depends largely on ____________________________________

how income is distributed

Macroeconomics is most likely to include the study of

inflation

Examining whether government intervention can reduce the severity of recessions is most likely an issue in

macroeconomics

Firms choose how to produce the goods and services they sell. In many​ cases, firms face a​ trade-off between using more workers or using more machines. For​ example,

many times in the past several​ decades, firms may have chosen between a production method in the United States that uses fewer workers and more machines and a production method in China that uses more workers and fewer machines.

Economists use the word marginal to mean an extra or additional benefit or cost of a decision. An optimal decision occurs when

marginal benefit equals marginal cost.

A _______________________economy is an economy in which most economic decisions result from the interaction of buyers and sellers in markets but in which the government plays a significant role in the allocation of resources.

mixed

Japan has a market economy. As​ such, Japan​'s economy​ (relative to centrally planned​ economies) tends to result in

productive efficiency and allocative efficiency but not necessarily equity.

Equity is

the fair distribution of economic benefits

Opportunity cost is

the highest valued alternative that must be given up to engage in an activity.

Macroeconomics is

the study of the economy as a whole, including topics such as inflation, unemployment, and economic growth

​Trade-offs force society to make​ choices, particularly when answering the following three fundamental​ questions:

​One, what goods and services will be​ produced? Two, how will the goods and services be​ produced? Three, who will receive the goods and services​ produced?


Set pelajaran terkait

LUOA Girl's Health&P.E. Semester Exam

View Set

AWS Certified Cloud Practitioner Practice Test #2

View Set

Smart book Exploring Business Ch B

View Set

Absolute Value Functions and Translations / Instruction / summary / assignment

View Set

Factor polynomials using structure

View Set