Macroeconomics Exam
Charlie is willing to pay $10 for a t-shirt that is priced at $9. If Charlie buys the t-shirt, then his consumer surplus is
$1
If 40,000 hours of work produced a total output of $600,000 in an economy, then the labor productivity is
$15 per hour of work
Monthly Rent:: 500,1000,1500,2000,2500,3000 Amaprtments Demanded per Year:: 5000,4800,4600,4400,4200,4000 Apartments Supplied per Year:: 0,3000,3600,3900,4200,4500 Using the table above, what is the equilibrium rent and quantity for this small city?
$2,500 and 4,200 apartments
The minimum acceptable price for a product that producer Sam is willing to receive is $15. The price he could get for the product in the market is $18. How much is Sam's producer surplus?
$3
Year 1: Alta (Real GDP) 2,000// Zorn (Real GDP) 150,000// Alta (Population) 200// Zorn (Population) 500 Year 2: Alta (Real GDP) 2,100// Zorn (Real GDP) 152,000// Alta (Population) 202// Zorn (Population) 505 Year 3: Alta (Real GDP) 2,200// Zorn (Real GDP) 154,000// Alta (Population) 210// Zorn (Population) 508 Refer to the table. Per-capita GDP was about
$303 in Year 3 in Zorn
Year 1: Quantity of Labor- 2,000// Productivity of Labor- 200 Year 2: Quantity of Labor- 2,000// Productivity of Labor- 210 Year 3: Quantity of Labor- 2,000// Productivity of Labor- 210 The table shows the quantity of labor (measured in hours) and the productivity of labor (measured in real GDP per hour of work) in a hypothetical economy in three different years. In Year 2, the economy's real GDP was
$420,000
Quantity Demanded:: 52,62,72,82,92 Price:: 50,45,40,35,30 Quantity Supplied:: 73,62,51,42,33 In this market, a surplus of 21 units would exist at a price of
$50
At an annual growth rate of 7 percent, real GDP will double in about
10 years
If the natural rate of unemployment is 3 percent and the actual unemployment rate is 8.4 percent, there is a negative GDP gap of
10.8 percent
In the accompanying graph, which line might represent an immediate-short-run aggregate supply curve?
2
Suppose that real domestic output in an economy is 20 units, the quantity of inputs is 10, and the price of each input is $4. The level of productivity is
2
You are given the following information about the economy: the nominal interest rate = 8 percent, and the real rate of interest = 6 percent. The inflation premium is
2 percent
In the diagram the economy's short-run AS curve is line _____ and its long-run AS curve is line _____.
2; 1
National income accountants define consumer durable goods as products that have an expected life of
3 years or more
Monthly Rent:: 500,1000,1500,2000,2500,3000 Amaprtments Demanded per Year:: 5000,4800,4600,4400,4200,4000 Apartments Supplied per Year:: 0,3000,3600,3900,4200,4500 Using the table above, what if the city government could enforce a rent control law that sets the maximum rent that could be charged at $1,000? How many units would actually be rented?
3,000 apartments
If the rate of inflation is 12 percent per year, the price level will double in about
5.8 years
The $2.2 trillion CARES Act was designed to
All of these choices are correct
Consumer:: A,B,C,D Maximum Price Willing to Pay:: 75,68,60,55 Actual Price (Equilibrium Price):: 50,50,50,50 Refer to the provided table. The consumer surplus is $18 for consumer
B
Which of the following will be determined in the resource market?
Boeing 787 plane
Examples of common economies are
Cuba and North Korea
Paper money (currency) in the United States is issued by the
Federal Reserve System
the highly influential book by Adam Smith, who brought up the "invisible-hand" notion, is titled
The Wealth of Nations
On the basis of the information, and assuming trade occurs between the three states, we can expect
Washington to exchanges apples with Texas and receive money in return
Which of the following represents the most contractionary fiscal policy?
a $30 billion decrease in government spending
Which of the following fiscal policy changes would be the most expansionary?
a $40 billion increase in government spending
Which of the following is a labor resource?
a computer programmer
Which of the following do economists consider to be capital?
a construction crane
An appropriate fiscal policy for a severe recession is
a decrease in tax rates
If the government reduces the subsidy to universities, we can expect
a decrease in the supply of higher education
Microeconomics is concerned with
a detailed examination of specific economic units that make up the economic system
If you write a check on a bank to purchase a used Honda Civic, you are using money primarily as
a medium of exchange
When economists refer to scarcity, they are referring to
a situation where what we want of something exceeds what we have of that thing
Money functions as
a store of value, a unit of account, and a medium of exchange
Which of the following is the best synonym for "marginal" in economics?
additional
The long-run begins
after the short-run ends
Rapid asset price increases
are sometimes referred to as financial bubbles
The immediate-short-run aggregate supply curve represents circumstances where
both input and output prices are fixed
The diagram illustrates the pattern of
business cycles
Who are the main economic investors in a market economy?
businesses
Which of the following is a distinguished feature of a command system?
central planning
The study of economics is primarily concerned with
choices that are made in seeking the best use of resources
Command systems are also known as
communism
College classes and textbooks are
complementary goods
Discretionary fiscal policy will likely cause budget
deficits during recessions and surpluses during periods of demand-pull inflation
The number of years required for real GDP to double can be found by
dividing 70 by the annual growth rate
Real GDP per capita is found by
dividing real GDP by the population
The aggregate demand curve is
downward-sloping because of the interest-rate, real-balances, and foreign purchases effects
Economic growth is best defined as an increase in
either real GDP or real GDP per capita
Net exports are
exports minus imports
Economic resources are also called
factors of production
Government purchases include
federal, state, and local government expenditures
Which of the following goods would most probably be an inferior good?
generic beer
A price ceiling means that
government is imposing a legal price that is typically below the equilibrium price
A price floor means that
government is imposing a minimum legal price that is typically above the equilibrium price
The main characteristics of a modern market system include all of the following except
government is restricted to national defense and does not intervene at all in various markets
Which of the follow is not a typical characteristic of a market system?
government ownership of most property resources
Which of the following does an individual's budget line not reveal?
how much of each good the individual wants
The foreign purchases effect suggests that an increase in the U.S. price level relative to other countries will
increase U.S. imports and decrease U.S. exports
The main function of the entrepreneur is to
innovate
Discretionary fiscal policy refers to
intentional changes in taxes and government expenditures made by Congress to stabilize the economy
The payment made for the use of (borrowed) money is
interest
If there is an unexpectedly good selling environment and sales exceed production,
inventories will be unexpectedly falling
Expansionary fiscal policy is so named because it
is designed to expand real GDP
The four factors of production are
land, labor, capital, and entrepreneurial ability
National income accountants define consumer nondurable goods as products that have an expected lift of
less than 3 years
The French term "laissez-faire" means
let it be
All of the following are private goods are services except
light beams projected from lighthouses
Anything that is generally acceptable in trading for goods and services is a
medium of exchange
In the accompanying table for a particular country, C is consumption expenditures, Ig is gross investment expenditures, G is government expenditures, X is exports, and M is imports. All figures are in billions of dollars. If this nation's equilibrium price level is 125, its net exports will be
minus $2 billion
Given the information, and assuming trade occurs between the three states, we can expect
money to flow counter clockwise from Michigan to Texas to Washington
Which of the following is a land resource?
natural gas
Purposeful behavior means that
people weigh costs and benefits to make decisions
The largest expenditure component of GDP is
personal consumption expenditures
For economists, the word "utility means
pleasure or satisfaction
Refer to the diagram. An effective governement-set price ceiling is best illustrated by
price A
The amount of revenue that sellers actually receive over and above the minimum acceptable amount that they are willing to receive for selling a product is called
producer surplus
Copyrights and trademarks are examples of
property rights
A increase in the excise tax on gasoline
raises the price of gasoline by shifting the supply curve left
If an economy has 800,000 hours of work, and its labor productivity is $16 per hour, then
real GDP must be $12,800,000
Specialization in production is important primarily because it
results in greater total output
The supply curve in a market is vertical instead of upscoping whenever
sellers have a fixed quantity of the item for sale
Assume a nation's current production possibilities are represented by the curve AB in the accompanying diagram. Economic growth would best be indicated by a
shift in the curve from AB to CD
The aggregate supply curve (short-run)
slopes upward and to the right
Which of the following is a capital resource?
software used by a firm
Which of the following measures the changes in the prices of a "market basket" of some 300 goods and services purchased by typical urban consumers?
the Consumer Price Index
Which of the following activities is excluded from GDP, causing GDP to understate a nation's well-being?
the child-care services provided by stay-at-home parents
Opportunity costs exist because
the decision to engage in one activity means forgoing some other activity
The equilibrium price refers to
the market-clearing price
Which of the following would be determined in the product market?
the price of an energy drink that you just put in your shopping basket
Which of the following will NOT be included in U.S. GDP?
the value of avocados grown in Mexico and shipped to your local grocery store
Which of the following will be included in U.S. GDP?
the value of the cars produced at a Japanese-owned Toyota factory in Ohio
Competition means that
there are independently acting buyers and sellers in the market
The presence of market failures implies that
there is an active role for government, even in a market system
GDP tends to
understate economic welfare because it does not take into account increases in leisure
The opportunity cost of constructing a new public highway is the
value of other goods and services that are sacrificed in order to construct the new highway
Financial institutions reward savers with the following except
wages
Before the Industrial Revolution, living standards in the world
were relatively stagnant for long periods of time
A positive statement is concerned primarily with
what is
Normative statements are concerned primarily with
what ought to be
Lower resource prices reduce production costs and increase profits; therefore
when resource prices fall, firms supply greater output at each product price