Macroeconomics ch 1

___________ decide(s) what goods and services will be produced.

Consumers, firms, and government

Complete the following​ table: ​(Enter your responses rounded to two decimal​ places.)

initial value: 70 new value: 100 percentage change? sec. value - first value ------------------------ x100 first value answer: 42.86

Economics is a social science because

it considers human behavior —particularly ​decision-making behavior. it applies the scientific method to the study of the interactions among individuals. it is based on studying the actions of individuals. *****all of the above.*****

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

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

in the diagram to the​ right, the curve labeled​ "S" is apparently​ _____, while the curve labeled​ "D" is apparently​ _____.

nonlinear; linear The relationship between two variables is linear when it can be represented by a straight line. Few economic relationships are actually linear. Most are curvedlong dash—or nonlinearlong dash—relationships rather than a linear relationship. In​ practice, however, it is often useful to approximate a nonlinear relationship with a linear relationship.

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

Economists often are interested in percentage change from one period to the next. The percentage rate of change of gross domestic product​ (GDP) is an important macroeconomic variable. If in 2010 GDP was​ $11,150 billion​ dollars, and GDP increased to ​$11 comma 93611,936 billion in​ 2011, what is the growth rate of the U.S. economy in​ 2011?

sec. period - first period --------------------------- x100 first period answer: 7%

A hypothesis in an economic model is

tested before it can be accepted​ (or not​ rejected). usually about a causal relationship. a statement that may be either correct or incorrect about an economic variable *****all of the above*****

Equity

the fair distribution of economic benefits.

Opportunity cost

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

When the federal government crafts environmental policies that make it less expensive for firms to follow green​ initiatives,

the policies are consistent with economic incentives

Any model is based on making assumptions because

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

the slope of a curve is defined as the _____ divided by _____

ΔY, ΔX

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

​1. what goods and services will be​ produced? 2. how will the goods and services be​ produced? 3. who will receive the goods and services​ produced?

Which of the following shows a negative nonlinear relationship ​ (assume values of x>0​)

******y= 48/x******

The diagram to the right illustrates a hypothetical demand curve representing the relationship between price​ (in dollars per​ unit) and quantity ​(in ​1,000s of units per unit of time​). The area of the rectangle shown on the diagram is _______ (Enter your response as an​ integer.)

Areas that form rectangles and triangles on graphs can have important economic meaning. The formula for the area of a rectangle​ is: Area of a rectangle​ = Base times ×Height. For the diagram​ below, because the curve is a demand​ curve, the area of the rectangle is the​ firm's total revenue. Total revenue is ​$1,125,000. We can calculate total revenue for this price and quantity combination by multiplying price ​($7575​) and quantity ​(1515—in ​1,000s of​ units) and expressing the correct number of units.

The diagram to the right illustrates a hypothetical demand curve representing the relationship between price​ (in dollars per​ unit) and quantity​ (in 1,000s of units per unit of​ time). The area of the triangle shown on the diagram is _______ (Enter your response as an​ integer.)

Areas that form triangles on graphs can have important economic meaning. The formula for the area of a triangle​ is: Area of a triangle​ = ½ Base​ × Height. For the diagram​ below, because the curve is a demand​ curve, the area of the triangle is a specific dollar amount. The area of the triangle represents 760,500. We can calculate the area of the triangle by multiplying the base ​(6161 − 2222— in​ 1,000s of​ units) and height ​($6868 −​$2929​) and then divide by 2.

Macroeconomics is

Macroeconomics- The study of the economy as a​ whole, including topics such as​ inflation, unemployment, and economic growth. Microeconomics- The study of how households and firms make​ choices, how they interact in​ markets, and how the government attempts to influence their choices.

__________is concerned with what is​, and __________ is concerned with what ought to be. Economics is about _________, which measures the costs and benefits of different courses of action.

Positive analysis (concerned with what is​) , normative analysis (concerned with what ought to be), 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

Microsoft charges a price of​ $599 for a copy of Windows 7. Is this pricing decision​ rational?

When we assume the managers at Microsoft have used all available information and have weighed all known benefits and​ costs, we are assuming rationality.

In your economics​ class, you scored a 62 on the first​ quiz, a 81 on the second​ quiz, and a 72 on the third quiz.

Your average quiz grade is 71.7 ​(response rounded to one decimal​ place.)

When we graph the relationship between two​ variables, we often want to draw conclusions about whether changes in one variable are causing changes in the other variable. Doing​ so, however, can lead to incorrect conclusions. Reasons for drawing incorrect conclusions about cause and effect include

an omitted variable. reverse causality. ****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 ___________ economy in which the government decides how economic resources will be allocated. Or a society can have a _________ economy in which the decisions of households and firms interacting in markets allocate economic resources.

centrally planned, market

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

economics

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